Sustainability investment may be ‘less visible’ at present, but it is becoming more ‘deeply embedded in investment decision-making’, according to a new study by FTSE Russell.
FTSE Russell’s ninth annual sustainable investment asset owner survey, which gathered responses from 402 asset owners across 24 countries, found that more than four fifths (84%) are now incorporating sustainability considerations into their investment strategies, up from 73% last year.
A further 15% are evaluating implementation, indicating that almost all respondents are either taking sustainability factors into account, or planning on doing so.
On a regional basis, adoption rates were broadly aligned, with 85% of respondents in North America, 83% in Europe, the Middle East and Africa, and 84% in Asia Pacific applying sustainability considerations across larger proportions of their portfolios, as well as increasing their focus on long-term risks and opportunities.
‘More deeply’
“Asset owners continue to embed sustainability factors more deeply into investment decisions, despite market volatility and policy uncertainty,” commented Stephanie Maier, global head of sustainable, FTSE Russell.
“This reflects growing recognition that these factors can materially affect risk and returns, and warrant the same scrutiny as other investment considerations. Sustainability is increasingly part of core investment practice – a routine element of portfolio construction and risk management.”
Physical and reputational risks
The survey found that climate-related physical risks are gaining in prominence, with 26% of respondents identifying them as a priority, up from 19% in 2025.
Some 32% of respondents identified governance, tax and shareholder rights as a key priority – up from 18% last year – while health and healthcare-related risks (25%), technology and AI-related risks (24%), and food security (19%) were also emerging areas of concern.
Concerns over reputational risks have fallen, however, with greenwashing cited as a concern by 22% of respondents, down from 37% last year, while concerns about the availability of ESG data fell from 36% to 25%.
At the same time, however, the quality of corporate reporting has grown in prominence, with 33% of respondents identifying it as a constraint on increased sustainable investment adoption.
According to FTSE Russell, this coincides with the ‘levelling off of sustainability-related corporate reporting rates and changes to regulatory requirements in both Europe and North America’. Read more here.
