More than 90% of individual investors reported that they are interested in sustainable investing, increasing over the past year with expectations of returns as a central driver of interest, according to a new survey released by Morgan Stanley.
While the survey indicated growing interest in sustainable investing, however, it also found that sustainable investment allocations slipped slightly in the past year, although nearly two thirds of investors say they plan to increase allocations in the next 12 months, also citing performance as a top reason.
For the report, “Sustainable Signals: Individual Investors 2026,” Morgan Stanley 2,250 individual investors across North America, Europe and Asia Pacific. The survey was conducted in February and March 2026.
The survey found that 92% of investors are interested in sustainable investing, up from 88% last year, and with the biggest increase coming from investors describing themselves as “very interested,” rising to 55%, from 51% in 2025. Investor interest in sustainable investing increased across regions, growing to 88% in North America, up from 84% last year, 94% in Europe (88% last year), and 93% in APAC (92% last year). European investors showed a strong increase in those described as “very interested,” rising by 11 percentage points to 59%.
The survey also indicated that financial returns are central to interest in sustainable investing, with more than 80% of those with interest including investment performance as a driver, including 45% reporting that they want to support positive real-world outcomes alongside a market-rate financial return, and 40% with an expectation that sustainable investments could offer stronger financial returns than traditional investments.
Notably, only 13% of investors cited alignment of investments with personal values as the top reason for interest in sustainable investing, and only 2% cited a reduction in environmental, social or governance risks.
Overall, the survey found that 75% of investors now report having some exposure to sustainable investments, although average portfolio allocation to sustainable investments declined slightly over the prior year to 31% from 33%.
Despite the decrease, 64% of investors reported that the plan to increase their allocation to sustainable investments over the next 12 months, up from 59% last year, while only 5% plan to decrease allocations.
Performance again emerged as the key driver of allocation plans, with confidence that sustainable options offer comparable or better returns as the top reason cited for plans to increase allocations, investors looking to decrease allocations similarly reported seeing weaker returns as their top reason.
While investors broadly reported increased interest in sustainable investing, and most expect to increase their allocations, the survey also found that barriers to sustainable investing have become more prominent, with 32% of respondents reporting concerns about greenwashing as the top “very significant” barrier, up from 27% last year, followed by a lack of transparency and trust in reported data, which increased to 30% from 28%. Overall, 25% of respondents reported a range of potential barriers to including sustainable investments as “very significant,” up from 21% in the prior year. Other key barriers included limited knowledge about how to start sustainable investing (27%) and lack of tools to measure sustainable impact (25%).
Notably, the survey also found that nearly four out of five (79%) of respondents reported that they would be ‘very’ (35%) or ‘somewhat’ (44%) likely to select a financial advisor or investment platform based on their sustainable investing offerings.
Examining investors’ thematic sustainable investment priorities, the survey found that 36% of respondents listed advancing a broad range of environmental and social goals as one of their top 2 sustainable investment themes, followed by economic empowerment (access to finance, education, affordable housing) at 31%, health and wellness (nutrition, disease treatment, product safety) at 30%, and climate action at 26%.
The survey also indicated that most investors (64%) see greater opportunities for sustainable or impact investments in private markets relative to publicly traded companies. Similarly, while 40% of investors overall reported that they currently invest in private markets, this increased to 55% of those with a stronger allocation to sustainable investments (30%+). Top benefits cited by investors for including private markets investments included diversification (29%), ability to invest in new technologies or innovative business models (26%), and exposure to high-growth investments (20%).
Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley, said:
“Our latest Sustainable Signals survey shows that performance continues to be the top driver of individual investors’ interest in sustainable investing as they look to achieve both market-rate returns and real-world impacts. Looking ahead, a majority of individual investors see greater opportunity for sustainable investments in private markets, especially for portfolio diversification and investing in innovation.”
Click here to access the survey.
