Sustainable Investing: Key Trends and Insights from Morgan Stanley's 2025 Report
Overview
Morgan Stanley's 2025 report on sustainable investing reveals a growing interest among individual investors, particularly younger generations. The report highlights key motivations, barriers, and trends shaping the future of sustainable investments.
Source: Morgan Stanley Institute for Sustainable Investing
Rising Interest in Sustainable Investing
The report indicates a strong and increasing interest in sustainable investing, especially among Gen Z and Millennials. Approximately 97% of Millennials and 95% of Gen Z investors express high interest in sustainable investments. This trend is driven by a desire for real-world impact and the belief that sustainable investments can offer competitive returns.
Motivations Behind Sustainable Investments
Investors are motivated by various factors, including the potential for competitive returns and diversification. In North America and APAC, around 45% of investors seek real-world outcomes, while over 40% of European investors believe sustainable investments could yield stronger financial returns. Clean energy solutions are a top priority, with over 80% of investors viewing the energy transition as an opportunity to generate returns.
Generational Differences and Barriers
Generational gaps significantly influence sustainable investing behaviors. Younger investors face more barriers, such as a lack of knowledge, limited product availability, and insufficient financial advice. Despite these challenges, over 90% of younger investors would choose financial advisors or platforms based on their sustainable investing offerings
Corporate Responsibility and Investment Criteria
Investors increasingly believe that corporations should address sustainability issues. Positive sentiment around environmental responsibility has grown in both the U.S. and Europe since 2023. When making investment decisions, investors consider a wide range of corporate behaviors, including transparency, anti-corruption measures, emissions reduction, and employee treatment.
Morgan Stanley's 2025 report underscores the growing importance of sustainable investing among individual investors. As interest continues to rise, particularly among younger generations, the financial industry must address the barriers and provide more guidance and options to meet the evolving demands of sustainable investors.
