Companies urged to heed millennials' concerns

Shares of Beyond Meat - which produces plant-based meat substitutes - have soared since the firm's initial public offering last month.
Shares of Beyond Meat - which produces plant-based meat substitutes - have soared since the firm's initial public offering last month.ST PHOTO: MARK CHEONG

This age group is more likely to invest in eco-friendly firms, says DBS investment chief

Eco-friendly firms should take heed of the concerns of millennials as people in this age bracket will have significant spending power in the coming decades, said DBS' chief investment officer yesterday.

Mr Hou Wey Fook told a briefing that companies will do very well if they can meet the demands of this demographic, who were born between 1981 and 1996.

Sustainable investing is an area set to benefit, he added, noting that 90 million millennials across the world stand to inherit US$30 trillion (S$41 trillion) over the next few decades.

Mr Hou said: "The world is changing, and (the changes have) profound implications to the way we should be investing.

"If a public-listed company is not embracing sustainability policies, I'm afraid it will be bypassed," he added, noting that climate change is on millennials' minds.

A DBS report said that millennials are almost twice as likely to invest in companies or funds that target specific social or environmental outcomes.

"Sustainable investing is becoming increasingly compelling, given the increasing awareness among (millennials)," the report added.

Analysts predict that environmental, social and governance investments will be part of core investment portfolios in the future.

Portfolios will also be increasingly rated according to the impact they have on the environment and society, they added.

Mr Hou, who was outlining the bank's outlook for the rest of the year, said the listing of Beyond Meat is a sign of how well environmentally friendly products can do.

Beyond Meat's shares have soared more than 570 per cent since the firm's initial public offering last month, CNN reported.

The California-based company was valued at nearly US$10 billion in what has been called the most successful market debut this year.

Mr Hou added that firms can also benefit if their products impress on social media, given that millennials grew up with the likes of Facebook, Instagram and Snapchat.

But they will not be the sole group to dictate investment trends, he noted, pointing out that healthcare spending will also increase as the world's greying population has longer lifespans.

A version of this article appeared in the print edition of The Straits Times on July 05, 2019, with the headline 'Companies urged to heed millennials' concerns'. Print Edition | Subscribe