Morgan Stanley Report Finds Companies Doubling Down on Sustainability for Long-Term Value

Key Takeaways

• Sustainability as Value Creation: 88% of global companies view sustainability as a value opportunity, up from 85% in 2024.
• ROI is Measurable: Over 80% of companies can quantify returns on sustainability investments.
• Climate Disruption is Real: 57% of businesses experienced operational impacts from extreme climate events in the past year, rising to 73% in APAC.
• Progress on Delivery: 65% report meeting or exceeding expectations on sustainability strategy implementation.
• Challenges Ahead: High investment needs and macro-political uncertainty remain key barriers, but technology and favorable operating environments are helping enable progress.

Deep Dive

A growing number of global companies continue to see sustainability as a pathway to long-term value, not just risk mitigation, according to the 2025 Sustainable Signals: Corporates report from the Morgan Stanley Institute for Sustainable Investing.

The annual survey (conducted in partnership with Dynata) polled 336 sustainability decision-makers across public and private companies in North America, Europe, and the Asia Pacific (APAC) region between March and April. An additional 101 firms from the Middle East and North Africa (MENA) and Latin America (LATAM) were also included this year for regional analysis.

Eighty-eight percent of respondents said they view sustainability as a long-term value creation opportunity (53% primarily, and 35% in part) up three points from 2024. Meanwhile, only 12% of companies described sustainability primarily as a risk management concern, a slight decline from last year.

Companies also appear to be treating sustainability spending more like traditional business investments: more than 80% reported being able to measure return on investment (ROI) from sustainability-focused projects, whether through capital expenditure, operating expenses, or R&D.

“The data suggest that sustainability remains central to long-term value creation,” said Jessica Alsford, Chief Sustainability Officer at Morgan Stanley and Chair of the Institute for Sustainable Investing. “Companies around the world report an alignment between corporate strategies and sustainability priorities as they seek to build resilient, future-ready businesses.”

Climate Disruption Hits Business, Especially in APAC

Over half of surveyed companies (57%) reported being affected by physical climate events over the past year, with APAC firms reporting the highest incidence (73%). Among those affected, extreme heat (55%) and storms or other extreme weather (53%) were the most common disruptions.

These events drove up costs (54%), disrupted workforces (40%), and impacted revenues (39%). Looking forward, two-thirds of companies anticipate further negative impacts from climate risks in the next five years, though 80% say they feel “very” or “somewhat prepared” to increase their resilience.

Sixty-five percent of companies reported that they are “meeting” or “exceeding” expectations on their sustainability strategies, up six points from the previous year. Still, companies cited several major challenges, such as 24% ranking high investment needs among their top barriers, followed closely by political, macroeconomic, and regulatory uncertainty.

Technology is helping to bridge that gap. One-third of global respondents said that technological innovation is a top enabler of sustainability strategy execution. In North America, however, a favorable economic and operating environment ranked highest as a driver of progress.

Profit, Demand, and Cost Pressures on the Horizon

When looking ahead five years, 25% of companies cited higher profitability as the top opportunity tied to sustainability, followed by revenue growth, better visibility into cash flows, and a reduced cost of capital. However, just over half of companies still flagged costs as the most significant challenge to achieving their goals.

Although not included in global tallies for comparability with 2024, newly added responses from MENA and LATAM aligned with broader global trends. MENA had the highest percentage of companies (86%) viewing sustainability as a value driver. In LATAM, 88% expect climate-related risks over the next five years, yet 67% still see sustainability as a value opportunity.

The survey data reflects a group of companies already engaged in sustainability strategy. By design, all respondents were decision-makers or contributors to sustainability efforts at firms with at least $100 million in revenue in developed markets or $1 million in emerging ones.

This year marks the second edition of the corporate-focused Sustainable Signals survey, part of Morgan Stanley’s broader series that also includes investor perspectives. The full report, available on the Institute’s website, offers further detail on methodology, sector comparisons, and regional breakdowns.

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