51乱伦

The next generation redefines legacy

Millennials and Gen Z - often heirs or co-decision-makers within family offices - are bringing a new vision to capital deployment. For younger investors, wealth isn鈥檛 simply something to preserve or display, but a tool to shape the future.

For older generations, legacy has often meant wealth preservation and institutional giving, but for younger stakeholders, legacy is increasingly defined as the positive impact that can be created during a lifetime. It鈥檚 about the systems that can be helped to transform, not just the causes that are supported.

The internet and global social movements have made younger generations more aware of systemic issues like racial injustice, climate crisis, and economic inequality. Lavish displays of wealth are now more likely to trigger criticism, not admiration - particularly in the context of climate crisis and inequality.

Three values that are defining this generational shift are:

鈥�    Purpose over profit: Investments must align with personal and family values.
鈥�    Proof over promises: Scepticism around greenwashing and symbolic CSR - impact must be measurable.
鈥�    Global citizenship: Younger investors see themselves as part of a worldwide community, accountable for addressing interconnected challenges like climate change, social justice, and inequality.

For these investors, traditional philanthropy (donating a portion of wealth made through any means) feels fragmented. Impact investing offers a more integrated, authentic approach - using capital as a direct expression of personal and family values. The "quiet power" of this new generation - investors like Yvon Chouinard of Patagonia, or the founders of purpose-led family offices, represent a new model: low-profile, impact-first, mission-aligned.

The rise of social stewardship

While environmental concerns still dominate the ESG landscape, 2025 marks a clear uptick in interest around the 鈥淪鈥� in ESG: social impact.

COVID-19 highlighted the fragility of many social systems - particularly in healthcare, community cohesion, and access to basic services. Today, investors increasingly recognise that social resilience isn鈥檛 just ethically sound; it鈥檚 materially relevant. Public health crises and social instability can pose tangible risks to real estate portfolios, urban assets, and long-term returns.

This has resulted in a broader understanding of value:

鈥�    Placemaking 鈥� a better understanding of how placemaking can impact real estate and drive value. Stakeholders are integrating more placemaking strategies into portfolios, as they contribute to long term tenant retention and give back to the communities in which they serve.
鈥�    Social infrastructure has emerged as a core part of many family office portfolios, alongside climate and environmental strategies. highlights that 22% of ultra-high-net-worth individuals are already investing in arts, culture, and heritage preservation; 17% are directing capital into healthcare and medical research.
鈥�    Place-based investing and social outcome metrics are increasingly being embedded into ESG portfolios.
are particularly attuned to this shift. With 80% of younger investors aiming to reduce consumption, future-focused capital is being steered toward sustainability, health, and cultural preservation - not just financial yield.

From labels to performance

Another indicator of ESG's evolution is how real estate investors are redefining due diligence. Historically, environmental certifications like LEED, BREEAM, and WELL served as the primary benchmarks for sustainable development. However, investors now recognise that these labels often fail to reflect actual performance 鈥� there are potentially too many certifications, and the level of detail varies for each. Instead, real, quantifiable metrics are being prioritised - like energy consumption, emissions intensity, and retrofit costs - that have direct operational and financial implications.

With no unified global benchmark, it鈥檚 difficult to compare assets or portfolios consistently. This has led investors to look beyond the label and demand standardised, verifiable data that enables like-for-like comparison across geographies and asset types. ESG diligence is marked by a shift toward measurable outcomes and continuous performance monitoring, enabled by digital tools and smart building technologies 鈥� not just box-ticking certifications.

The barriers to effective ESG integration

Private assets often operate with less regulatory oversight and disclosure obligations, making it hard for investors to assess ESG risks or performance. Similarly, emerging markets face infrastructural, technological, and governance challenges that limit data availability and reliability - reducing investor confidence. 

While the EU has made strides with SFDR and the CSRD, other jurisdictions have taken different approaches or moved more slowly. The result is an array of differing standards (e.g., ISSB, SEC proposals, local taxonomies) that create compliance complexity, especially for global investors trying to harmonise ESG strategies across portfolios.

In terms of the different asset classes, for the residential market, fragmented ownership, tenant-controlled energy use, and limited access to in-unit performance data make it difficult to implement and track ESG upgrades at scale - especially across multifamily portfolios.

In the commercial sector - particularly for offices - the cost of retrofitting has become prohibitively high, with an increasingly stark divide between Grade A and secondary assets. Estimating capex is highly asset-specific, with no one-size-fits-all approach, making upgrades financially unviable in many cases. While this challenge exists across sectors, it is less pronounced in industrial and retail assets.

What comes next?

The direction of travel is clear: ESG is becoming the default lens through which a growing number of investors assess risk, opportunity, and legacy.

The demonstrates that a new generation of wealth holders is not just asking, 鈥淲hat is this investment worth? 鈥渂ut also, 鈥淲hat is it for?鈥� This evolution - from ownership to stewardship, from performance labels to impact metrics, from amenities to communities - signals a distinct shift in how capital is deployed.

In the years ahead, portfolios that embed ESG deeply and authentically will be best placed to navigate complexity, build resilience, and deliver meaningful long-term returns. The next generation isn鈥檛 waiting for change. They鈥檙e driving it.

To find out more about how we work with clients to drive ESG solutions, get in touch with our team.

To read the full Wealth Report 2025, .