ESG and The Next Generation of Wealth
Environmental, Social, and Governance
We’re on the verge of the largest wealth transfer in human history. Trillions of dollars will change hands as the Baby Boomers pass along their wealth to the next generation, making some of the world’s wealthiest people even more well off.
This new generation of high net worth individuals (HNWI) and ultra-high net worth individuals (UHNWI)—a group we’re calling The Inheritors—will have different values, wants, needs, and expectations than their parents, which means anyone interested in reaching this very desirable target audience must learn to adapt.
Misconceptions abound about how to connect with The Inheritors. For example, there’s a belief that this group will be focused on doing good things while they make their money. Our data shows that only a small segment of The Inheritors feel this way. The vast majority will look to save the planet as a secondary consideration or will turn to these concerns later on in life. Right now, they’re interested in buying the beach house, getting their NetJets membership, and ensuring that their children’s future is secure.
Investors, philanthropic organizations, luxury good makers, banks, and other interested parties see nothing but questions when they look at The Inheritors. With data from the Valuegraphics Database, we now have the answers.
In this post, we’ll share some information on the ESG Champions, one of four types of Inheritors that our study revealed. We’ll look at how they think, what they want, and what messages will influence them most.
The answers, of course, lie in their values. Because what we value determines what we do. When you know the shared values of your target audience, you’ll know how to activate them. In fact, Valuegraphics are the OS for your target audience. All you need to do is design your product, service, or brand in a way that triggers their values.
Valuegraphics and The Inheritors
We surveyed 1,850 HNWI and UHNWI split evenly among three groups: those who are going to inherit between $10-50 million, $50-100 million, or $100+ million.
From this statistically relevant sample, four main groups of inheritors emerged:
The Masters of the Universe
The Loyal Seekers
The ESG Champions
The Embryonic
Of 56 possible values, there are three shared across the board by all four groups. These three common values are a great place to start understanding how The Inheritors make decisions, what you must do to connect with them, and how to influence their behavior.
Belonging: Belonging is just a general sense of fitting in. It’s the feeling you get when you walk into a party and say to yourself, “This is my type of crowd.”
Financial Security: Growing up wealthier than the rest of us doesn’t mean that The Inheritors don’t think about Financial Security. If anything, they have been socialized to focus on financial issues more than most: investments, markets, and fiscal decision-making were discussed around the dinner table more often.
Personal Responsibility: The Inheritors like to get stuff done. They’re never going to sit around and complain that the world should be handing them things. They’re going to get up and make stuff happen.
The ESG Champions make up 20% of The Inheritors
Two values that make them unique: Family, Positive Environments
This segment of The Inheritors is driven by ESG (Environmental, Social, and Governance) investing, and correspondingly what we might call ESG philanthropy, too.
Unsurprisingly, the value of Environmentalism features prominently in this segment. It’s worth noting that in our research on values around the world, environmentalism as a value is a fairly new phenomenon. People have been concerned for the environment for a long time, but the difference between a concern and a value is key. A concern is something you care about, perhaps deeply, but it crosses over and becomes a value when it impacts every decision you make in your life in a meaningful way.
A couple of types of environmentalists show up here, the first being “personal environmentalists.” This group is concerned about the environment as it relates to them personally and the people they love most. This means they care deeply about their local forest being cut down, but when it comes to more abstract and far-flung environmental concerns, their engagement is less direct.
The second group are “collective environmentalists.” They see themselves as part of a team that’s out to make the world a better place, even if it’s not in their own backyard.
Another value they share is Personal Health and Well-Being, so it’s not too much of a stretch to see a connection between that and a concern for the health and well-being of the planet, too.
How to Activate the ESG Champions
Example: An Environmental Cause
To show how values can activate a target audience, we’ve included an example below. However, in the real world, we always defer to our clients, because they will always know better how to use a Valuegraphics Profile to activate the behaviors/emotions that they would like to see. Our job is to point to the specific values that will activate the people in question: in this case, the three shared values plus the two unique values mentioned in the article above.
Let’s say your environmental organization is launching a shoreline cleanup initiative. For ESG Champion donors, it would be wise to ask them to come and participate in the cleanup, instead of asking them to just write a check.
Why? Because they will respond well to the Personal Responsibility that participation delivers, and to the Belonging the invitation affirms. Make the event on a Sunday, so they can bring their Family, and set aside a special section of the shoreline just for them.
Invite environmental scientists to team up with them and chat about the biggest changes they’re seeing in the oceans, while they work side-by-side to clean up the shore. This is all about creating a Positive Environment and doing it in a positive way. Focus on the positive changes that have been made possible through efforts and support like theirs; this target audience is not activated with negativity of any sort.
Finally, find some clever way to reinforce how fiscally smart your organization is, and how every dollar donated is used in the most effective way possible. This message of Financial Security will assure them their donor-dollars will be well-managed and help to make the world a better place for us all.
If you want to know more about the next (or current!) generation of wealth, get in touch. A custom Valuegraphics Profile will give you the operating system for your specific target audience, and set you up to use Values Thinking for 8X more effective marketing.