88% of global companies view sustainability as a value creation strategy, with measurable ROI reported by over 80%.
Climate risks are reshaping operations: 57% of companies experienced climate-related disruptions in the past year; 80% are preparing to boost resilience.
High investment needs remain a top barrier, but companies continue to deliver: 65% say sustainability strategies are meeting or exceeding expectations.
Corporate commitment to sustainability is intensifying, with 88% of companies globally identifying it as either a primary (53%) or partial (35%) driver of long-term value creation—up three percentage points from 2024. The insight comes from Morgan Stanley’s Sustainable Signals: Corporates 2025, a survey of over 300 sustainability decision-makers at public and private firms with revenues exceeding $100 million.
“The data suggest that sustainability remains central to long-term value creation,” said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley. “Companies around the world report an alignment between corporate strategies and sustainability priorities as they seek to build resilient, future-ready businesses.”
Regional perceptions are evolving. North American and European companies showed the largest increase in viewing sustainability as a value driver—up 9 and 10 points respectively. Meanwhile, APAC companies reported a shift toward risk management.
Industry perspectives are also diverging. Utilities, consumer staples, and real estate firms are increasingly positioning sustainability as a core value driver. By contrast, sectors such as IT and industrials are focusing more on balancing value creation with risk mitigation.
RELATED ARTICLE: Morgan Stanley Report: Value Creation Drives Corporate Sustainability, Despite High Investment Costs
Quantifying the Business Case
Despite capital intensity, over 80% of companies can measure return on investment (ROI) for sustainability-related spending, such as capital expenditures, R&D, and operational costs.
83% say they measure ROI for sustainability as easily as for other investments, with just 2% reporting difficulty.
Spending is relatively balanced across goals: 22% focus on capex and R&D for new projects, 30% on opex for risk reduction, and 31% pursue a blend of both. Utilities and tech sectors prioritize new investments, while communication services and real estate emphasize operational risk mitigation.
Barriers to Progress
Investment requirements remain the top hurdle, with 24% citing them among their top three barriers. Political and macroeconomic uncertainties (17%) and difficulty assessing current sustainability performance (16%) follow closely.
Still, 65% of companies say they are meeting or exceeding expectations on their sustainability strategy—up from 59% in 2024. APAC reported the strongest progress gains, growing from 53% to 60% year-over-year.
Climate Impacts and Readiness
The physical impacts of climate change are already being felt:
57% of companies report business disruption from climate-related events in the past year, rising to 73% in APAC.
The most cited impacts include extreme heat (55%), extreme weather (53%), and rising operational costs (54%).
Over the next five years, three-quarters expect physical climate risks to affect demand, costs, and investor relationships.
More than 80% feel “very” or “somewhat prepared” to enhance resilience across infrastructure, supply chains, financial risk, and community engagement.
Climate transition risks are also looming large. Between two-thirds and three-quarters of companies see a likely business impact from policy changes, shifting markets, or rising stakeholder expectations. The most likely outcomes include higher operating costs (71%) and increased investment requirements (69%).
Looking Ahead: Profitability, Costs & Enablers
The top opportunity cited for sustainability over the next five years is improved profitability, mentioned by 25% of respondents. Other priorities include revenue growth (19%) and lower cost of capital (13%).
However, costs remain a top concern. Half of companies flagged cost-related challenges—including higher prices or reduced profitability from process changes—as their biggest threat.
Key enablers for successful sustainability strategy include:
Technological advancements (33%)
A favorable economic and operating environment (32%)
Growing client demand (28%)
Bottom Line:
Companies are increasingly confident in sustainability as a strategic growth lever—but they remain cautious about high investment costs and intensifying climate risks. Those that can align technological investment, climate adaptation, and strategic planning are positioning themselves for long-term resilience and shareholder value.
Read the full report here.
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