Up until recently, participation in investing was generally associated with working adults engaging in long term investment to increase the value of their savings. However, in the last few years, the number of individuals beginning to partake in investing in assets such as stocks has been increasing, coinciding with the COVID-19 pandemic. With stringent quarantine and health regulations being introduced, individuals were now spending more time at home while they were not spending as much money in day to day life anymore. With more spare time and spare change in hand, people began to look for ways of developing these savings and turned towards investing. Given how it has typically been associated with the idea of a male dominated industry made up of cutthroat sharply dressed Jordan Belfort types on Wall Street, the shift of investing being more of a casual and diverse pursuit appears to be unexpected upon initial examination. Upon closer examination, its appeal to a younger student population becomes clearer, especially in terms of how it interacts with the socially progressive values of this demographic.
Dr. Marta O’Hagan Luff, a finance professor at Trinity Business School, is a strong advocate for sustainable investing. From her experience in the industry prior to academia, she is aware that the future of finance is contingent on sustainability as our planet’s health is deteriorating, and therefore more environmentally friendly practices need to be encouraged. As of late, there has been a rising emphasis on the role of Environmental, Social & Governance (ESG), ratings in the investment decisions that both companies and individual investors make.
“Engaging in crypto investing is actively harmful towards environmental and social progressivism, as these currencies operate on a system that consumes enormous amounts of energy”
According to O’Hagan Luff, these ESG ratings, which are a metric that measures the social and environmental impacts and efforts of companies, are “still all over the place” in terms of their effectiveness but nonetheless display the increasing influence of socially progressive incentives in financial markets. By investing in sustainable companies, younger cohorts such as students are able to have a direct effect on the global economy in a way that reflects their values. From talking to various experienced individuals within the realm of finance, O’Hagan Luff also notes that there is a high demand for young people who are passionate about issues such as climate change in order to develop and promote more sustainable business practices. On top of all this, building up a knowledge of investment requires a strong sense of macroeconomic trends, and as a result enables students to become more aware of various ongoing global events.
While investing allows students to develop a more informed world view in line with their values, O’Hagan Luff also expresses concern towards the growing view of investing being seen as a “get rich quick” scheme amongst young people. With the huge amount of publicity surrounding Gamestop stock in 2021, and the rise of trendy and highly volatile cryptocurrencies that dominate headlines daily, the image of investment has been distorted to be considered an activity more similar to gambling, rather than pragmatic financial management. This type of risky speculative trading has resulted in many people losing significant amounts of money As such, discourse in the media surrounding cryptocurrency has become disseminated with misinformation that paint this form of financial decentralisation as the new trustworthy alternative to the institutions that have formed the foundation of our economy for the past number of centuries. O’Hagan Luff believes that cryptocurrencies are a ticking time bomb that will inevitably implode, resulting in the many small investors in it getting burned while also having a knock on effect on the wider economy. Additionally, she outlines how students engaging in crypto investing is actively harmful towards environmental and social progressivism, as these currencies operate on a system that consumes enormous amounts of energy and is rife with criminal elements using it as the medium for their financial practices to take place. Historically, financial crises have occured due to lack of regulation and misinformation, and for cryptocurrency this appears to be its unavoidable trajectory. So, while crypto may appear to be the new trend within the cultural zeitgeist, buyers beware.
This then begs the question, how can students learn about investing in a trustworthy way that is aligned with their social values since misinformation is potent in the media? One way in which students have been able to do so is through the Trinity Student Managed Fund (SMF), a large student society that allows students to learn about and take part in finance, especially if they do not have the funds to do so personally. According to their website, the SMF manages a portfolio of €150,000 that is spread across a variety of industries, such as energy, software and health. While they focus on investing, the SMF also engages in networking opportunities through their mentorship programmes and talks with industry experts, including a subcommittee dedicated towards closing the long standing gender gap of the industry.
For Bryony Hoyle, a Senior Fresher Economics & Politics student who is a junior analyst in the SMF’s software sector, she was inspired to take part in the society in order to meet like minded individuals and learn about finance in a structured environment. For her this formalised approach was much more effective than self research, as she was able to collaborate and learn from older students with more experience in a fun and social setting. From working in the software sector, an area that initially was not her primary interest, Bryony has been able to develop her research, analysis and persuasive skills and discover passion for the industry, through the SMF’s internal pitches and participation in intervarsity competitions.
Similarly for Jacques Mathieu, a Senior Fresher BESS student and fellow SMF analyst, the society has allowed him to develop quantitative financial literacy, along with interpersonal and public speaking skills in a proactive environment.
“The stereotype of the morally apathetic ‘finance bro’ is losing traction in the face of the rising diverse movement of student investors”
Within the SMF, student interest in sustainable investing has come to the fore, with more of their investments and events being centred around the topic. In light of this, the recent scrutiny Trinity has faced this academic year surrounding their investments in the fossil fuels and arms industry has sparked conversations around campus. This is of particular relevance to the SMF, given how their investing is conducted entirely by students. Bryony asserts that while at the moment these may be sound investments in the traditional sense of profit being the only objective, the ethics of these investments does need to be factored in. But at the same time, profitable and ethical investing are now no longer mutually exclusive, given the seismic developments in clean energy and the increasing uncertainty surrounding fossil fuels as a low risk investment. With various incentives nudging business towards sustainable practices, these two considerations of investments are becoming intertwined. It appears that Trinity College can continue to invest in a way that reflects the values of their student population while also being financially viable, but change in the approach to their portfolio has to occur.
The idea that students engaging in investing is contradictory to their beliefs in regards to social justice and climate change does not appear as much water as one might assume. In actuality, it appears those within the financial markets have realised that in order to ensure the long term health of our planet, our businesses and economic institutions have to embrace sustainable practices to thwart climate change. Thus, a space has emerged for students interested in investing who genuinely care about our climate, fuelled as well by the pursuit of new activities during the pandemic. Despite this, it is obvious that students need to approach this area with wariness as information surrounding it, particularly with cryptocurrency, is untrustworthy and could result in losses for them. Societies such as the SMF provide students with a space where they can learn in an effective, reliable and fun way, as well as developing their skill sets for the future. The stereotype of the morally apathetic “finance bro” is losing traction in the face of the rising diverse movement of student investors who believe in enacting positive social and environmental change through financial markets.
