Companies See Sustainability as a Way to Create Value

Jun 30, 2025

Globally, 88% of companies view sustainability as a potential driver of long-term value, and more than 80% say they can measure returns on investment for sustainability-related projects.

Key Takeaways

  • Eighty-eight percent of companies globally view sustainability as a long-term value creation opportunity, up three percentage points from 2024.
  • While high investment needs remain a challenge, two-thirds of companies say their sustainability strategies are meeting or exceeding expectations.
  • More than 80% of companies say they can measure returns on investment for sustainability-related projects.
  • More than half of companies have experienced physical climate-related impacts in the past year and, in response, 80% say they are prepared to increase resilience measures.

Potential for creating value is the top reason that companies pursue sustainability initiatives, according to “Sustainable Signals: Corporates 2025.” The new report from Morgan Stanley’s Institute for Sustainable Investing is based on a survey of sustainability decision makers at more than 300 companies worldwide, spanning public and private companies with more than $100 million in revenue, conducted in March and April 2025.

 

When asked about how sustainability affects their long-term corporate strategy, 88% of respondents said sustainability is primarily (53%) or partly (35%) a value creation opportunity, up three percentage points from the Institute’s 2024 survey.

“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.”

 

Perceptions of sustainability vary across geographies and industries. Compared to 2024, North American and European respondents reported a larger increase in perceived value creation, up nine and ten points, respectively. Companies in APAC shifted toward sustainability’s value in risk management by eight points. Respondents in industries including utilities, consumer staples, real estate, materials and financials tilt more toward sustainability for value creation, while others (e.g., information technology, industrials, energy and communications services) are likelier to see sustainability as a way to both create value and mitigate risk.

 

 

Sustainability Investment Needs and Returns

Two-thirds (65%) of companies surveyed say they are meeting or exceeding expectations on their sustainability strategy, up from 59% in 2024. The biggest hurdle to delivering on or implementing sustainability strategies is high investment needs. Of companies globally, 24% placed high levels of investment required in their top three barriers, followed by political uncertainties and challenges understanding their current sustainability performance.

 

While investment in sustainability may compete with other capital allocation priorities, companies say their returns on these investments can be quantified. Over 80% are able to measure the return on investment for sustainability-related capital and operating expenditures, as well as research and development, just as they do for other investments.

Impact of Climate Events on Companies

Fifty-seven percent of companies reported an impact on their operations from climate-related events over the past year, with companies in Asia Pacific citing a much higher incidence (73%).

 

Extreme heat was the most common event, noted by 55% of those who saw any impact. Increased operational cost is the most common way businesses are affected (54%), followed by worker disruption and revenue losses.

Over the next five years, more than two-thirds of respondents believe that physical and transition risks from climate could have an impact on demand, costs, investment needs and relationships with investors, with these concerns notably highest in North America. Companies are preparing to meet these challenges: More than 80% feel very or somewhat prepared to increase resilience.

Read the full "Sustainable Signals: Corporates 2025" Report

Download and read the full report.