A new survey by Morgan Stanley shows most institutional investors and asset managers expect sustainable assets to increase over the next two years.

The Sustainable Signals report by the Morgan Stanley Institute for Sustainable Investing polled more than 900 institutional investors across North America, Europe and Asia Pacific.

It shows that 78% of asset managers expect AUM in sustainable funds to increase over the next two years and 80% of asset owners expect the proportion of their assets allocated to sustainable investment to increase during the same period.

More than three-quarters of asset owners “strongly” or “somewhat” agree that sustainable investing offerings influence mandate decisions, with 80% requiring their asset managers to have a sustainable investing policy or strategy in place.

The top reported challenge in sustainable investing for both asset owners and managers is data availability (71%), followed by fluctuating regulatory guidance (69%) and greenwashing (68%).

Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley, said, “Institutional investors see a growth trajectory for sustainable assets globally in the coming years to meet increasing client and stakeholder demands in a more mature sustainable investing market. This year the Institute has released Sustainable Signals reports with views from individual investors, corporates and institutional investors, with each group seeing sustainability as an opportunity for growth and value creation.”

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