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- Over 90% of corporate decision-makers continue to advance sustainability strategies, yet fewer believe they are meeting or exceeding expectations
- Majority of respondents see sustainability as both a value creation and risk management exercise for their company
- Macroeconomic uncertainty and regulatory compliance rise significantly as factors compared to previous years
- 78% anticipate negative operational impacts from physical climate risks in next five years, up 10% from 2025
Globally, over 90% of sustainability leaders say their companies continue to execute on their sustainability strategies yet fewer believe they are meeting or exceeding expectations than in 2025, according to a new "Sustainable Signals" report by the Morgan Stanley Institute for Sustainable Investing . Nearly half (47%) now see room for improvement on progress — up more than 10 points from the 2025 and 2024 surveys. The survey polled 300 sustainability decision-makers at private and public companies across North America, Europe and Asia Pacific between March and April 2026 to understand how sustainability factors into their business and where they see the greatest opportunities and challenges.
When asked how sustainability impacts their long-term corporate strategies, 62% now see it as both a value creation and risk management exercise compared to 35% in 2025. Simultaneously, there has been a 31 point decrease in companies viewing sustainability primarily as a value creation opportunity (22% in 2026 versus 53% in 2025).
The external environment poses a greater challenge to corporate sustainability in 2026, with 36% citing macroeconomic uncertainty as a top barrier, up from 15% in 2025. High levels of investment required (39%) and lack of data (30%) rank as the other top barriers. External factors also top the list of reasons why companies are pursuing sustainability strategies, with regulatory compliance and investor expectations both cited as stronger motivators (49% versus 23%, and 42% versus 21%). Value creation remains the other top reason.
"Our Sustainable Signals survey shows that corporates around the world continue to see the value of sustainability, but their motivations and concerns have shifted amid a complex operating environment," said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley. "Sustainability is becoming more integrated into core business strategies as macroeconomic uncertainty, rising costs, and regulatory and investor expectations increasingly shape decision-making."
Additional survey findings include:
- Opportunities – Over 50% of respondents see higher revenue growth or increased profitability as the primary way sustainability can create value for their organizations in the next five years. While more companies (14% versus 10%) report greater challenges in measuring ROI for sustainability investments, the majority (73%) continue to say they can achieve this as easily as they can for other activities.
- Climate Risk – On average, 78% of respondents anticipate negative operational impacts from physical climate risks in the next five years (up from 65%), including increased costs, higher investment requirements and greater investor scrutiny. The same percentage say they are prepared to meet these challenges, though just 19% feel "very prepared" (down from 34%).
- Corporate Governance – 63% of respondents say that key business decisions – such as capex and R&D budgeting, new product approvals or M&A – are subject to sustainability criteria (up from 51%). Around the same proportion (62%) report Board-level responsibility for sustainability (up from 42%). Most corporate sustainability decision-makers (90%) have broader roles, with their work reaching across functions including strategy, risk management or finance. 15% also contribute to their organizations' AI governance.
The Sustainable Signals series was launched in 2015 and measures the views of individual investors, institutional investors and corporates on sustainable investing. View the full results of the latest survey, including regional findings, here .
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com .
About Morgan Stanley Institute for Sustainable Investing
The Morgan Stanley Institute for Sustainable Investing (The Institute), established in 2013, aims to accelerate the growth and adoption of sustainable finance across capital markets. The Institute produces thought leadership and develops partnerships and programs to inform and empower clients, investors and the next generation of sustainability leaders. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting .
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