Millennials and GenZ’ers are perceived to have a reckless mentality and adopt a careless attitude toward life decisions, including investing. The reality, however, is that Millennials and GenZ’ers recognize they only live once and they want to make an impact in the lives that they live. They are committed to creating powerful and positive changes in society amidst social activism and environmental turmoil. Remarkably they know they can only have an impact if they act collectively.
The united, multi-generational initiative to initiate change on a global scale has rallied Millennials and GenZ’ers to form numerous communities to demand social and environmental accountability and action, such as the Greta Thunberg’s “Fridays for Future” to fight global warming. Whether an in-person demonstration or a purely “clicktivist” online social movement, Millennials and GenZ’ers are collectively discovering innovative ways to demand action on issues they feel passionate about such as social justice and environmental issues.
Together, Millennials and GenZ’ers account for more than 50% of the current global population. Millennials are projected to inherit over $68 trillion in the “Great Wealth Transfer” by 2030. Meanwhile, GenZ’ers’ income is expected to grow to $70 trillion by 2040. Additionally, they are distinct for being the first generations raised in a fast placed world immersed in wireless technology. Both Millennials and GenZ’ers encompass our concept of “wireless investors,” which we have defined in our prior work as retail investors who invest via app native trading platforms and obtain information on investing from social media and online fora.
Importantly, the corporations in which wireless investors are investing and which they are pressuring for social change are mammoths when it comes to their economic power; they dominate assets to a degree that can rival nation states. From lobbying, greenhouse gas emissions, vaccine sponsoring, global human rights abuse, and constant social media presence, corporations are seemingly unstoppable.
Millennials and GenZ’ers recognize their leverage and use it to influence corporations to pursue their agendas of social and environmental change. In fact, Millennials and GenZ’ers hold corporations to a higher moral standard than any generation before, with 68% of Millennials and GenZ’ers believing CEOs should repair societal problems and 65% believing CEOs should be held accountable to the general public according to the 21st Annual Edelman Trust Barometer. Tom C.W. Lin cites World War II as the beginning of corporations becoming involved in every significant social movement; whether the active supporter or the fervent adversary, corporations face an expectation from society to pick a side.
As consumers, Millennials and GenZ’ers remain loyal to brands that prioritize involvement in resolving environmental, social, and governance issues (ESG). Allegiance to a corporation depends on the company’s stances aligning with consumers’ values, which, of course, vary. Fifty-nine percent of GenZ’ers reported they would try a new product if the company’s stance on social issues matched their own, contrasted with 55% saying they would stop using the product if the company disagreed with their stance.
As employees, Millennials and GenZ’ers maintain their focus on ESG issues. With 44% of Millennials and 49% of GenZ’ers citing “personal ethics” as a factor when considering where to work. Both generations have a desire to meld together work and play to be satisfied with their employment. They seek employers that consider charitable events, community outreach opportunities, and overall employee wellbeing.
Millennials and GenZ’ers are active community members. Over a quarter of Millennials and a third of GenZ’ers report they have played an active role in national, regional, or local campaigns. Their activism extends to the global stage, as 40% of both Millennials and GenZ’ers consider themselves to be “citizens of the world” when tackling global problems, like climate change.
As investors, Millennials and GenZ’ers remain consistent when considering where to invest. A staggering 89% of Millennials and 80% of GenZ’ers consider a company’s history regarding ESG issues and values before investing. GenZ investors are projected to surpass Millennials as the most active generation of investors, making their preferences crucial for companies in the coming years. Similarly, GenZ investors are expecting companies to become more transparent about their ESG efforts. New investors are seeking direct relationships with not just other investors, but also the companies themselves. Wireless investors desire to have their voices heard, with 80% of GenZ investors reporting that they have previously voted in a shareholder meeting with a desire to have their voices heard. As technology advances, so will the opportunity for shareholder voting and participation to become more digitized, and therefore more appealing to Millennials and GenZ’ers.
Millennials and GenZ’ers have ignited a shift in social norms from passive investing to active participation in corporate governance. The applicability of a social norm depends on how it changes individual behavior, be it through legally enforceable rules or personal convictions. This can be observed in scenarios where more individuals change their actions based on their expectations that others will do the same, eventually reaching a tipping point that alters the social norm altogether. If wireless investors vote in shareholder meetings at the rates they have begun to vote in political elections, then they can set in motion a trend of engagement with the power to reach far in society. Engagement would become a widespread expectation. Conversely, passivity and free riding in governance would be frowned upon. As a result, share owners would perceive community and peer pressure to take part in governance and vote their shares. This would result in a social norm shift bringing a broad segment of society into corporate governance.
Sergio Alberto Gramitto Ricci is the Jacobson Fellow at NYU School of Law.
Christina M. Sautter is the Cynthia Felder Fayard Professor of Law, the Byron R. Kantrow Professor of Law, and the Vinson & Elkins Professor of Law at the Louisiana State University Paul M. Hebert Law Center.
This post is based on their work-in-progress, “Wireless Investors,” available on SSRN.