The power of Gen Z activism to galvanise ESG
Five powerful insights from Sanlam Investments' latest Critical Conversations event
By 2030, Gen Z will be moving into managerial positions. This generation has grown up and is more influential than one may think. They’re shifting the sustainability agenda from the bottom up, which is having a profound impact on the investment landscape.
These insights emerged at the latest Sanlam Investments Critical Conversations event on June 7, where a panel of experts explored value propositions for new generations through an ESG lens. Watch the recording of this panel discussion below.
Facilitated by renowned business and news presenter Lerato Mbele, the panel included Dion Chang, founder of Flux Trends; Shameela Soobramoney, CEO of the National Business Initiative; Ravi Pillay, a faculty member of the Gordon Institute of Business Science; and Tashmia Ismail-Saville, chief business development officer of Mitacs.
Opening the event, Carl Roothman, CEO of Sanlam Investment Group, said: “At Sanlam Investments, we want to be more than just an asset manager; we want to be agents of change. All stories start with a conversation. This conversation is about consumer-driven change and creating value propositions that position ESG right up front. The more we share our experiences, the greater the chance that, together, we can be the change we want to see in this world.”
Here are five key insights that emerged during the discussion:
1. Don’t underestimate Gen Z
Gen Z has entered the workforce and they’re the new customer. They’re the first generation to weaponise social media to galvanise change. They’re tech savvy with ample time. So, they’ll call brands out on green-, pink-, black-, any-kind-of-washing. Their social justice barometer is high and they’re entering political and civic duties earlier than any previous generation. Theirs is an activism of anger in reaction to being handed a broken world.
It’s no coincidence that new voices are rising as old systems unravel. We’re at an inflection point of policy change. This new generation of consumers is forcing a shift at boardroom level and beyond. Brands now need to prove they’re delivering with deliberateness and depth on their purpose and promise.
2. Young adults are taking the law into their own hands
In 2020, 25-year-old Mark McVeigh sued a $57bn retirement fund for the way it managed climate risk. He won, which has dramatic implications for Australia’s $3-trillion superannuation industry. Young people are taking on governments and companies when it comes to climate litigation. As is evidenced in McVeigh’s case, this has significant ramifications for the investment world, with a younger cohort of clients demanding investment portfolios that deliver on promises and drive sustainability returns.
3. Asset managers still have work to do
In a poll of event participants, 21% said it’s extremely important to align their investments (and, by proxy, their clients’ investments) with their personal values and sustainability goals. More than half said it’s important, but not the priority, while 7% said it's not important.
Another poll showed that 73% of respondents had never made an investment decision based on a company’s ESG performance — just 37% of these would consider doing so.
In a final poll, 36% said they never track companies’ ESG performances at all. This suggests there’s a shift that needs to happen from the top.
There’s evidence that companies that champion sustainability and ESG tend to outperform. So, asset managers have a pivotal role to play in presenting sustainability-focused portfolio options to clients.
4. The great energy debate
On the topic of coal vs renewables, the panel agreed that both should be in motion. Decarbonising the economy will create myriad jobs, so bolder decision-making is called for to action the alternative energy solutions of the future. Energy security is a concern worldwide right now. All solutions must be considered in terms of localising the value chain, but also remaining relevant in the context of international trade.
5. Policy and partnerships
We need adept policymakers to protect consumers and the country's future. Asking companies to self-regulate will never offer the scale and impact required. Global power will not shift without policy change. Additionally, companies need to be purpose-led and willing to engage in meaningful partnerships that cross-pollinate the private, public and government sectors.
For example, there are a plethora of clean-tech SMEs popping up to solve shared problems. The government can create an enabling environment for these entities to thrive, and established businesses could partner with them for a “shot in the arm” of innovation.
Said Roothman: “Confidence inspires a nation to invest in a world where we can all flourish and build a sustainable tomorrow, because confidence knows a sustainable future is the best long-term investment we can make. At Sanlam Investments, we are dedicated to driving deliberate ESG that’ll create a better planet for our future generations to inherit. That’s why we hold Critical Conversations: to discuss a viable way forward for SA Inc.”
For more on Sanlam Investments' Critical Conversations series of virtual events, click here.
This article was sponsored by Sanlam Investments.