Survey: 80% of asset managers, asset owners see sustainability as path for pursuing growth opportunities

05 / 01 / 2025

By Marwa Nassar - -

A majority (80%) of asset managers and asset owners see sustainability as a path for pursuing growth opportunities, according to a survey conducted by the Morgan Stanley Institute for Sustainable Investing.

The survey – covering more than 900 institutional investors globally during July and August 2024 – found that almost eight in 10 asset managers (78%) and asset owners (80%) expect sustainable assets under management (AUM) and allocations to rise in the next two years.

For 79% of asset managers, sustainable investing offerings are seen as a key differentiator for winning or retaining new clients.

They are mostly split evenly on identifying why they expect sustainable AUM to grow asset owners that want access to sustainable investing offerings are expected to be willing to switch asset managers to do so, asset managers see their existing clients increasing their allocation to sustainable investments, and asset managers are seeing asset owners allocating to sustainable investing for the first time.

Asset owners are also demonstrating their interest in sustainability. More than 80% globally say they require asset managers to demonstrate a sustainable investing policy or strategy, and more than three-quarters say that sustainable investing offerings are a key factor in selecting or retaining asset managers.

Nearly 90% of institutional investors (90% of asset managers and 88% of asset owners) say their sustainable investing activities are driven by demand from their stakeholders.

Globally, institutional investors are currently invested in a range of sustainable themes, with healthcare (41%) and financial inclusion (40%) with a slight lead.

When asked to prioritize specific environmental and social solutions, global investors across North America, Europe and Asia Pacific (APAC) rank renewable energy, energy efficiency and climate adaptation among the highest priorities. Notably, climate adaptation solutions are also seen as one of the most underappreciated investment opportunities across all three regions.

However, some notable differences emerged at the regional level. In Europe, “protecting wildlife on land and in water,” “preventing deforestation” and “ocean conservation” are all top 10 sustainable solutions, while there was no mention of nature or biodiversity in the top 10 for North America or APAC. “Biofuels” and “support for aging populations” were top ranked themes unique to APAC, while “racial diversity, equity and inclusion” was in the top 10 for North America but not the other regions.

Several concerns about sustainable investing persist among institutional investors. For 71%, data availability and consistency are the most pressing challenges. Fluctuating regulations and the threat of greenwashing—claims about a company or asset’s environmental benefits that may make it appear more environmentally friendly than it is—follow closely behind (69% and 68% respectively).

Negative perceptions about sustainable investing in the media or broader society rank lower, at 59%. In addition, 67% of asset managers say that asset owners have unrealistic expectations about the sustainability outcomes of their investments.