Morgan Stanley: Here's How Big Companies View Sustainability
More companies than ever are viewing sustainability as a long-term value creation opportunity according to Morgan Stanley’s latest Sustainable Signals: Corporates 2025 report.
The number is up 3% from 2024 at 88% of the 336 sustainability decision-makers polled across North America, Europe, and Asia Pacific.
“The data suggest that sustainability remains central to long-term value creation,” said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley.
“Companies around the world report an alignment between corporate strategies and sustainability priorities as they seek to build resilient, future-ready businesses.”
Sustainability as a core driver of value creation
Morgan Stanley reports that the rise in perceived value creation is particularly pronounced in North America and Europe, where the percentage of companies prioritising value creation in their sustainability strategy grew by nine and ten points respectively.
While Asia Pacific experienced a modest shift towards risk management, globally the trend is sharply focused on harnessing sustainability to innovate and grow.
Sectors such as utilities, consumer staples, real estate and materials have significantly increased their focus on sustainability as a value-generating lever. For instance, 78% of utilities now see sustainability as primarily about value creation – up from 58% last year.
Meanwhile, the financial sector is refining its positioning, with a growing blend of both risk management and value creation perspectives.
Investment issues
Despite widespread enthusiasm, investment challenges continue to pose significant obstacles.
High cost was one of the top three barriers to implementing sustainability strategies for 24% of corporates, making it the most common concern for the second year in a row. Political volatility, macroeconomic uncertainties, and a lack of internal clarity around performance metrics were also flagged as major concerns.
However, companies are increasingly equipped to navigate these financial pressures. A robust 83% of respondents said they are able to measure return on investment (ROI) for sustainability-related capital expenditure, research and operational costs just as they would for any other strategic investment.
This reinforces the growing maturity of sustainability functions within organisations, where initiatives can be justified through traditional performance frameworks, bolstering board-level support and stakeholder engagement.
Climate-driven business impacts fuel urgency
The real-world implications of climate change are also shaping strategy.
Over half of all surveyed companies – 57% – reported experiencing tangible impacts from physical climate events in the past year. In Asia Pacific, that number jumps to 73%.
These events, ranging from extreme heat to increasingly severe storms, are not abstract risks but operational challenges that affect supply chains, labor productivity, and infrastructure resilience.
Looking ahead, over two-thirds of respondents anticipate that physical and transition risks – from environmental degradation to shifting consumer expectations – will influence their businesses over the next five years. The anticipated effects include changes in investment needs, demand patterns, and even investor relationships.
Encouragingly, 80% feel “very” or “somewhat prepared” to increase their climate resilience – another sign of growing corporate agility in response to environmental volatility.
Profitability, technology and the road ahead
As companies look to the future, it’s clear that sustainability is not just about responsibility – it’s about opportunity.
Profitability is the top opportunity from sustainability over the next five years for 25% of companies, followed by revenue growth, lower capital costs and improved cash flow visibility.
These financial levers are pushing sustainability strategy into the heart of core business planning.
Still, cost pressures endure. More than half of companies point to budget constraints and competing investment priorities as their main challenges.
Yet, technology is emerging as a powerful counterbalance. Roughly one-third of companies ranked technological innovations among the top enablers of their sustainability efforts, ahead of macroeconomic improvements and rising customer demand.
