A new report from Morgan Stanley reveals that sustainable investing continues to gain significant traction worldwide, with 88% of global investors expressing interest in sustainable investment opportunities. This widespread enthusiasm is especially pronounced among younger generations, with 99% of Gen Z and 97% of Millennials leading the charge toward sustainable strategies.
“Our Sustainable Signals survey shows that investors across demographic groups and regions continue to believe that investments can achieve both positive real-world outcomes and competitive market-rate returns,” said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley.
The findings also highlight a major shift in allocation strategies, with 59% of investors planning to increase their allocation to sustainable investments in the coming year. A key driver behind this increase is a growing confidence that sustainable investments can match or even exceed the financial performance of traditional investment options. In fact, 24% of respondents cite the belief that sustainable investments offer competitive returns as the top motivator for this shift.
Clean Energy and Energy Efficiency as Top Priorities
When it comes to specific investment themes, clean energy and energy efficiency consistently top the list. Over 80% of investors view the global energy transition as an attractive opportunity, reinforcing the strong belief that environmental investments can also deliver solid returns. Regional preferences, however, reveal some differences, with North American investors showing strong interest in healthcare affordability, while investors in Europe and the Asia Pacific region focus on innovative technologies like battery tech, energy storage, and regenerative agriculture.
Generational Leadership and Changing Investor Behavior
The report underscores the pivotal role younger investors are playing in driving this trend. A striking 64% of investorshave reported increasing interest in sustainable investments over the past year, and younger investors are leading the way in terms of future commitment. As these generations gain greater financial influence, sustainability is expected to become an even more dominant focus area for investment decisions.
Nearly 4 in 5 investors also indicated they are more likely to choose financial advisors or platforms that offer sustainable investing options. This number climbs significantly among Gen Z and Millennial investors, with 96% of Gen Z and 92%of Millennials considering sustainability offerings a key differentiator when selecting advisory services.
Morgan Stanley’s ongoing Sustainable Signals research, which tracks trends in ESG investing since 2015, highlights the growing alignment between sustainable investing goals and the pursuit of strong financial returns. As younger generations assert their influence on the investment landscape, sustainable strategies are poised to become an even more integral part of global investment portfolios.
