Morgan Stanley’s 2025 Sustainable Signals survey shows asset managers and asset owners expect growth in allocations to sustainable investments.

The report from the Morgan Stanley Institute for Sustainable Investing shows that 84% of institutional investors expect the proportion of sustainable assets under management in their portfolios to rise in the next two years. Energy efficiency and renewable energy remain the top two sustainable investment priorities, with climate adaptation rising to third on the list.

About eight in 10 asset managers (79%) and asset owners (86%) expect the proportion of sustainable assets under management in their portfolios to rise over the next two years. This represents a one percentage point increase year-over-year for asset managers, but a six percentage point rise for asset owners. More than 75% of institutional investors said they expect physical climate risks to have an impact on asset prices in the next five years.

The report polled more than 900 institutional investors globally during August and September 2025. More than 90% of North American asset owners surveyed said they expect to increase the proportion of their assets in sustainable strategies in the next two years, slightly ahead of investors in Europe (82%) and APAC (85%).

Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley, said, “In our latest global survey of institutional investors, the majority expect to increase their proportion of assets in sustainable funds – with financial performance and a maturing track record driving these allocations. Similar to individual investors and corporates surveyed in this year’s Sustainable Signals series, asset owners and asset managers anticipate growing impacts from climate risk in the coming years and are aligning their priorities to mitigate these challenges.”

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