- Three-quarters of teenagers (77%) want businesses to take active steps to be greener in the wake of the Covid-19 pandemic1
- Young people are ready to make change happen – a majority of teens (63%) wouldn’t invest in an unethical company even if doing so meant their money increasing
- As the first Child Trust Funds mature to the tune of £1.6bn annually2, impact on the ethical investment sector could be huge as most teens opt to save or invest (72%)3
Businesses are being urged to pay attention to teenagers as three-quarters demand active steps to be greener post-pandemic.
The research, from financial services provider OneFamily, found that the pandemic has sharpened already strong views among teens about the impact corporations have on the environment. And this group is ready to vote with their wallet too – nearly two-thirds (63%) say they’d choose not to invest in unethical companies even if it made them more money to do so.
With 5.1m teenagers among the UK population4, this group has the power to hold businesses to account when it comes to ethical practices. Four in five (78%) teens think corporations put profit before the environment, while 65% say outright that “big business” is causing climate change – and 82% think businesses could be doing more.
The power of this group is set to be unleashed as the first Child Trust Funds (CTFs) mature for around 55,000 from September and over 700,000 over the next year5.
The total value of Child Trust Funds in the UK is estimated at over £10bn, with £1.6bn set to mature in the next 12 months alone6. With the current annual value of responsible investment (ESG) funds in the UK being £6.4bn annually6, the impact of money coming into the hands of ethically conscious teenagers could be seismic for the sector.
The research from OneFamily – which holds around one in four of these accounts – also shows that the vast majority of teens (72%) intend to save or invest their CTF windfall. The pandemic had an impact here too, with 60% saying they are more likely to save than spend money due to the economic impact of Covid-19.
Driving this potential shift in capital is the fact that 72% of 13-19-year olds believe their generation has a duty to ensure investments are not used to support companies that damage the environment – unsurprising when a whopping 97% of teens say the environment is important to them.
Jon Lee, Head of Investment at OneFamily said
“Businesses should be feeling pressure to pay attention to young people and become more ethically and environmentally minded. A burgeoning market of uncompromising young people is building, and they won’t be placated by gestures like making your logo green once a year for Earth Day.
“As a mutual, what our members say has a big impact on our business decisions. Our young customers have been direct in telling us that they want to put pressure on large companies to change for the better. As the first CTFs mature, that’s why we’ve worked closely with our fund manager to ensure that our new stocks and shares-based ISA and Lifetime ISA have funds which will positively impact our environment by investing in companies who are committed to making changes through lowering carbon footprint and use of fossil fuels to maximising green revenues and having action plans in place supporting climate change.”
Notes to Editors
Unless otherwise stated, all research conducted by Opinium, on behalf of OneFamily, between 12 and 14 August 2020 among a sample of 1,000 13-19-year-olds in the UK.
- 77% of those surveyed either strongly agreed or agreed with the statement “The pandemic has given us an opportunity to change and be more environmentally friendly”
- Figure based on CTF market analysis by OneFamily
- Of the teenagers who were aware that they have a Child Trust Fund, most said they would save (51%) or invest (21%) the value of the fund when it becomes available to them. This equates to 72% in total
- Based on Fig. 8 in latest ONS population estimates, August 2019
- Figure of 55,000 CTFs maturing in September and 700,000 over a year from HMRC stats
- £10bn total value in CTFs, £1.6bn over 12 months is based on market analysis by OneFamily
- Data from Morningstar suggests that an average of £124m a week flows into UK ESG funds – or £6.4bn annually
About OneFamily’s Sustainable Climate fund-backed ISAs
Child Trust Fund holders who want to invest their maturing funds in a climate friendly account can reinvest in OneFamily’s new stocks and shares ISA or Lifetime ISA, which will be backed by its Sustainable Climate fund.
The fund draws on the MSCI World Index but aims to achieve a reduction in carbon intensity of 70%, a reduction in brown revenues of 90% and an increase in green revenues of 300%.
Each company in the Sustainable Climate fund must be aligned to five specific factors; carbon intensity, brown revenues, fossil fuels, green revenue and adaption. They must keep striving to be sustainable, since they will be reassessed four times a year, those that drop their green standards will be removed from the fund.
About Child Trust Funds
Child trust funds were awarded to every child born between 1 September 2002 and 1January 2011. On Tuesday 1 September 2020, the first recipients will be eligible to access their funds. The average OneFamily account for teens turning 18 years old currently holds around £2,000, although many have substantially more.
The initiative, set up by the government, gave parents a head start in saving for their child’s future, as well as ensuring that every child arrived at adulthood with a nest egg, no matter what their background.
The government gave vouchers to over six million children and, for those turning 18 this year, the majority would have received £500 – with a £250 voucher when the scheme started and an additional £250 voucher when they turned seven. If the child came from a low-income family, they could have received up to £1,000. Younger account holders will have had an investment of between £50 to £500, depending on their age.
Parents could invest with the child trust fund provider of their choice. If they didn’t invest the voucher, the government partnered with several providers to do so on their behalf. This meant that even if parents did nothing at the time, no child would miss out. These saving pots may have a significant sum in them.