American millennials are abandoning the pursuit of environmentally-friendly lifestyles.
The world of sustainable investing is experiencing a significant divergence between Europe and the United States, according to recent surveys.
In Europe, the 2024 Cio ESG Survey by Deutsche Bank revealed that one in five investors already invests with the goal of contributing to a "more equitable society". This trend is expected to continue, with 51% of European investors planning to increase their allocation to sustainable strategies in the coming months.
On the other hand, the "2024 Survey of Investors, Retirement Savings, and ESG" conducted in the United States indicates a decrease in support for sustainable investments among young US investors. In fact, only 11% of American Millennial and Gen X generations consider it important to invest in funds with a positive environmental impact.
One of the key factors driving this divergence is the regulatory environment. Europe has been implementing stronger ESG regulations to reduce greenwashing and increase transparency, creating confidence for investors committed to sustainability goals. In contrast, political shifts in the United States have loosened ESG policies, creating an uncertain environment that dampens enthusiasm for sustainable investing, especially among younger investors.
Market and inflow dynamics also play a significant role. In the first half of 2025, European equity funds attracted over $100 billion, tripling the previous year's inflows, signaling strong investor confidence. Meanwhile, U.S. equity funds saw outflows double to $87 billion as investors rebalanced due to U.S. market uncertainties.
Economic conditions, such as higher fiscal deficits, debt levels, and real interest rates in the United States, also affect the attractiveness of sustainable investment options. Young US investors may be more affected by the perceived rollback of ESG commitments and the volatile political-economic landscape, whereas European investors see sustainability as embedded in investment policy and legal criteria, reinforcing their commitment.
This trend is particularly concerning as young US investors will inherit the wealth of the future. The decrease in willingness to accept personal sacrifices for the environment is a significant change in direction observed among young investors in the US. In fact, one in three young investors in the United States is not willing to accept any impact on their retirement investments for the sake of financing net-zero goals.
In conclusion, Europe's integrated regulatory framework and clearer sustainability commitments combined with market stability maintain strong interest in sustainable investments. Conversely, political uncertainty, regulatory loosening, and economic pressures in the United States contribute to decreasing interest, particularly among young investors who prioritize consistent ESG agendas.
- Personal-finance considerations might influence younger US investors to forego investments that contribute to environmental science and climate-change initiatives, as one in three of them is not prepared to accept any impact on their retirement investments for the sake of financing net-zero goals.
- The realm of environmental-science may witness increased investments in Europe, as compared to the United States, as one in five investors in Europe already invests with the objective of contributing to a more equitable society, and 51% plan to increase their allocation to sustainable strategies in the near future.
- The finance sector could be impacted by the regulatory environment, as Europe has been implementing stronger ESG regulations to prevent greenwashing and increase transparency, creating a more favorable climate for sustainable investments, while political shifts in the United States have loosened ESG policies, potentially discouraging sustainable financing.
