ESG Disclosure Coach comments on recent investor survey results and developments
Photo credit: Sean Pollok / Unsplash+
Morgan Stanley released their Sustainable Signals - Institutional Investors 2025 survey results, which point to US and global institutional asset owners and managers overwhelmingly maintaining and even increasing their responsible investment practices in the coming years, with an unsurprising focus on climate change mitigation and adaptation.
- 94% of institutional investors have had a sustainable investing program for at least a year, and just over half have had a program for more than five years
- 84% expect the proportion of sustainable assets under management in their portfolios to rise in the next two years
- Energy efficiency and renewable energy remain the top two sustainable investment priorities, with climate adaptation rising to third on the list.
The Canadian Responsible Investment Association also released its 2025 Canadian Responsible Investment (RI) Trends report, showing similar results:
- ESG integration is used by 96% of respondents, covering 87% of assets under management
- Risks associated with a changing climate are now the top driver of RI growth
- Three-quarters of respondents remain active in collaborative engagement initiatives
(Note that references in this second report to the quality of ESG reporting pertains to investors’ responsible investment reporting practices, not those of corporate issuers.)
In the context of the regulatory pullback in the US and the EU, it is interesting to see that institutional investor sentiment does not seem to waver and responsible investment practices have not imploded — at least not on paper, at least not for now.
Better sustainability regulation was the intention
It bears reminding ourselves that the impetus for more/better sustainability-related disclosure regulations and standards was the intention to meet investors’ needs for more widely available, comparable, and reliable information as inputs to their capital allocation decisions… decisions that were supposed to drive the shift towards sustainable activities. If the impetus remains, why have the regulators pulled back?
There is a growing discrepancy between what investors say they want and need, and what capital market regulators are providing. It will be interesting to see what happens when the unstoppable force meets the immovable object.
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