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February 16, 2021

Raising the Next Generation to Live More Sustainably

Jyoti Stephens grew up with the mantra to “leave the earth better than you found it." It's a belief passed down from her grandfather and is the mission of her family's certified organic food company, Nature's Path.

“Respecting the land and giving back to the community were a part of how we grew up," said Stephens, vice president of mission and strategy at the Richmond, B.C.-based company. Known for its focus on sustainability, Nature's Path also prioritizes ethical sourcing, energy efficiency, waste reduction, community engagement and eco-friendly packaging alternatives.

Stephens has fond memories of working in her parent's garden, growing—and eating—the fresh fruit and vegetables and learning about the soil's regeneration. It's a way of living and doing business that Stephens is now passing on to her young daughter in their home garden and during dinner-table conversations.

And she encourages all parents to have conversations with their kids about ways they can live more sustainably.

“Sustainability-thinking is about systems-thinking," said Stephens. “You don't want to overwhelm children with complexities, but there are ways to get your kids to think about all of the things it takes to make, enjoy and sustain the life we have well into the future."

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Climate Change Is A Key Concern for Parents

While Stephens, her family and their business are doing their part to protect the environment, more global efforts are needed, which worries her and other parents when it comes to their children's future.

“I'm gravely concerned about the impact that the warming planet will have on the next generation," Stephens said.

And she's not alone. About three-quarters of next-generation, high-net-worth parents believe their children will have a more challenging life than they have, with climate change being a key concern, according to the Shaping Tomorrow, Today report. The 2020 research from RBC focuses on the next generation of leading enterprising families across Canada, the U.S. and the UK.

In fact, 56 percent of respondents believe it's important for children to learn social and environmental responsibility in the home.

“There are two big trends that frighten me the most: climate change and the growing inequality gap between the haves and have nots," said one female Generation X-aged survey respondent. “At some point in my children's generation, if we continue down our current path, those two elements will cross —and I don't think even wealth will be able to help you there."

A Baby Boomer said he too worries about environmental issues. “I feel like the next generation is going to be faced with issues that we have not had to deal with in our family - at least in my generation," he said.

But Now Investors Are Paying More Attention to Sustainability

Sustainability is becoming a top-of-mind issue among investors, with a growing number focused on environmental, social and governance (ESG) factors when choosing where to put their assets.

Globally, 75 percent of institutional investors integrate ESG into their investment approach and decision-making, according to the 2020 Global Responsible Investment Survey. The annual survey from RBC Global Asset Management also shows 84 percent of respondents believe ESG-integrated portfolios will perform as well or better than non-ESG-integrated investments.

Melanie Adams, vice-president and head of corporate governance and responsible investment at RBC Global Asset Management, said ESG factors are critical to how her team invests today to achieve risk-adjusted, long-term returns.

“For many, it's about making the world a better place. But for investors, it's also very much about the performance of the investment," Adams explained. “If you're not looking at material ESG factors, you're not seeing everything you should be about the investment."

The focus also comes as a growing number of surveys suggest younger investors, such as Millennials and Generation Z, want their money invested in responsible companies, Adams noted.

“There will be a wealth transfer, and the next phase of investors care about these issues. We need to ensure we're able to satisfy their investment requirements," she said.

Companies also have a crucial role to play in thinking about their ESG strategies, Adams said, including climate change and adapting to a low-carbon economy.

“Companies that think about these things will be more resilient and are likely to perform better over the long run," she said.

Aligning Your Purchasing Power with Your Values

Consumers also can drive change by reimagining consumerism and choosing companies and brands that promote sustainability. The trend, known as conscious consumerism, is something entrepreneur Jane Mosbacher Morris enables through her company, TO THE MARKET, which connects businesses and consumers to ethically made products from around the world.

It's a venture-backed business with impact at its core, with more than 200 suppliers in over 40 countries. They use technology to help retailers and brands provide transparency in the supply chain in order to source and manufacture socially and environmentally responsible products.

“We're on a mission to change the way retail manufacturing is done to create a better outcome for people, the planet and, ultimately, better business," Morris said of the company she founded four years ago after working in humanitarianism for government and a prominent think-tank in Washington, D.C.

Morris worked in counterterrorism at the U.S. Department of State, where she was first exposed to vulnerable populations, in particular women. It was on a trip to Kolkata, India, while working as the director of humanitarian action for the McCain Institute for International Leadership that she came up with the idea for TO THE MARKET.

“It was a prime opportunity for me to engage in an industry where you had not only a social and environmental challenge worthy of fixing but also a market-driven opportunity to make a change," she said. “I thought I could have a bigger impact on the population I felt passionate about serving through the private sector if I leveraged market forces."

Morris is also the author of Buy the Change You Want to See: Use Your Purchasing Power to Make the World a Better Place, released in 2019, which helps consumers make a greater social impact through everyday purchases. Morris said parents can use the book to help teach their children—and better inform themselves—about being conscious consumers.

“It's about aligning your purchasing power with your values," said Morris, which could include climate change or other areas such as the economic empowerment of women.

Adams said parents can teach their kids the many different ways they can help to make the world a better place, including “the power of their wallets."

“Have a conversation with your kids," said Adams. “There's an opportunity to be thoughtful about how you invest your money. It can also be fun."

As parents think about the legacy they want to leave, educating the next generation around sustainability can help leave a lasting impact on generations to come.

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This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. 

This article is a republication of content originally published by RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC. © 2020, Royal Bank of Canada, used with permission. This article may not be reproduced, distributed or further published by any person without the written consent of RBC Wealth Management. Please cite source when quoting.

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