Increased interest in sustainable investment saw the market grow more than 33% between 2014 and 2016 to $8.72trn (£6.73trn), according to a report by the US investment bank Morgan Stanley.
This growth was largely due to the younger generation, who invested in companies targeting social or environmental goals twice as often as the total investor population over the past year.
In addition, millennials purchased from a sustainable brand twice as often, and were three times more likely to work at, or apply to, a company because of its environmental or social impact.
“Investors, particularly millennials, believe that their investment decisions can influence the issues they care about,” the report says. “This generation continues to lead the charge when it comes to sustainable investing.”
The research involved a survey of 1,000 active individual investors, finding that 75% describe themselves as interested in sustainable investing, compared with 86% of the millennial population.
This interest was reported despite a heightened sense of market volatility, which could explain why 71% of respondents believe companies with leading sustainability practices may be better long-term investments.
The research also found 58% of investors agree their investment decisions can influence the amount of climate change caused by human activities, rising to 75% among millennials.
“As long as the need for such impact remains, it is likely that investor interest will keep rising,” the report said.
