Individual Investor Interest in Sustainable Investing Remains Strong

Apr 30, 2025

Nearly 90% of global individual investors express interest in sustainable investing, citing the desire to support positive outcomes and the potential for competitive returns.

Key Takeaways

  • 88% of investors globally express interest in sustainable investing, with interest levels in the U.S. and Europe largely unchanged since late 2023.

  • Gen Z (99% of respondents) and Millennials (97%) show higher levels of interest.

  • For the 59% of investors who plan to increase sustainable investments in the next year, confidence in performance is the top reason.

  • More than 80% of individuals believe it is possible to achieve financial gains while focusing on positive environmental or social outcomes. 

Individual investor interest in sustainable investing remains strong and stable, according to the Morgan Stanley Institute for Sustainable Investing’s 2025 “Sustainable Signals: Individual Investors” report. Nearly 90% of investors globally say they are interested in investing in companies or funds that aim to achieve market-rate financial returns while also considering positive social and/or environmental outcomes. On a like-for-like basis, interest levels in the U.S. and Europe are nearly unchanged from late 2023.1

Most investors surveyed reject the idea that sustainable investing comes at the cost of performance. More than 80% believe it is possible to achieve financial gains while focusing on positive environmental or social outcomes, and a similar share of respondents believe companies can drive impact without sacrificing profitability. Still, 64% of global investors express some concerns about performance.  

 

In North America and Asia-Pacific, almost half of investors say a desire to support positive real-world outcomes is driving their growing interest, at 44% and 46% respectively. In Europe, financial motivations take precedence, with 40% citing the belief that sustainable investments can deliver stronger returns than traditional options as their top reason. 

 

While broad interest spans all demographics, there are some differences generationally. Higher proportions of Gen Z (72%) and Millennials (69%) said they were “very interested,” compared to a lower percentage of Gen X (47%) and Baby Boomers (23%).

Barriers to Sustainable Investing 

More than half of investors surveyed plan to increase their portfolio allocations to sustainable investments in the next year, with almost one-third planning to maintain current allocations. Only a small minority globally (3%) anticipate decreasing their sustainable holdings. This year's survey asked investors about reasons behind their allocation decisions in more detail. For those planning to increase allocations, the top driver is increasing confidence that sustainable investments can offer competitive market-rate returns, followed by seeing real-world effects of climate change. For the group planning to maintain their allocation at similar levels, diversification between sustainable and traditional investments is the most common reason. 

 

In addition to some concerns about performance, greenwashing challenges and trust in reported data remain the top barriers to including sustainable investments in portfolios, cited by almost 70% of investors. Overall, the data suggest that clarity and consistent results are needed for investors to feel fully confident in sustainable investing. 

Sustainable Investing Interest Areas and Company Expectations

For investors across all regions, renewable energy and energy efficiency are the top investment priorities for sustainable solutions. More than 80% view the energy transition as an opportunity to generate returns.

 

When it comes to investors’ expectations for companies, more than 80% of investors said they think companies should address environmental and social issues, and when making investment decisions, nearly 70% say they are likely to consider a company’s sustainability practices. From anti-corruption and emissions reduction to human rights and supply chain ethics, these factors are part of the investment calculus for many investors.

 

Amongst global investors, 60% report that they would only invest in traditional energy companies with credible decarbonization plans, and 60% said they would be likely to purchase carbon offsets for their investment portfolios if such solutions were available.

Read the "Sustainable Signals" Report

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