• 92% of global individual investors now express interest in sustainable investing, up from 88% in 2025.
• Average portfolio allocation fell slightly to 31% in 2026, down from 33% in 2025, showing a gap between investor interest and capital deployment.
• 64% of investors see stronger sustainable investment opportunities in private markets than in public markets, especially for diversification and innovation exposure.

Investor Interest Rises, But Allocations Ease

Global individual investor interest in sustainable investing continues to rise, even as actual portfolio allocations move slightly lower, according to a new Sustainable Signals report from the Morgan Stanley Institute for Sustainable Investing.

The survey polled 2,250 active individual investors across North America, Europe and Asia Pacific between February and March 2026. It assessed investor attitudes toward sustainable investing, portfolio behavior, perceived opportunities, and key barriers.

Globally, 92% of respondents said they are very or somewhat interested in sustainable investing. That is up from 88% in 2025. In addition, three quarters of respondents already hold some exposure to sustainable investments in their portfolios.

However, the data also points to a more cautious deployment environment. Average sustainable investment allocation fell to 31% in 2026, compared with 33% in 2025. The decline is modest, but it highlights a growing divide between stated interest and actual capital allocation.

For wealth managers, asset managers, and sustainability-focused product teams, that gap matters. Investor appetite remains high, yet conversion into larger allocations increasingly depends on performance confidence, product transparency, and clear evidence of financial value.

Performance Remains The Main Driver

The report shows that financial returns remain central to sustainable investing decisions. Among investors interested in sustainable investing, 85% said their top reason was either to support real-world outcomes while achieving market-rate returns or to pursue sustainable investments that may outperform traditional peers.

That framing is important. Sustainable investing interest is not being driven only by values-based preferences. Instead, many investors now view sustainability as part of a broader return and risk conversation.

Performance expectations also shape future allocation plans. Among the 64% of respondents planning to increase their sustainable investment allocation over the next year, confidence in performance was the most common reason.

At the same time, return concerns weigh on those moving in the other direction. The 5% of investors planning to reduce sustainable allocations cited weaker returns as their primary reason.

Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley, said the latest survey shows that performance remains the top driver of individual investor interest. “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,” Alsford said.

RELATED ARTICLE: Morgan Stanley Acquires Energy Efficiency Solutions Provider Resource Innovations

Private Markets Gain Investor Attention

Private markets emerged as one of the clearest opportunity areas in the survey. Globally, 64% of respondents said they see greater opportunity for sustainable investments in private markets than in publicly traded companies or instruments.

Investors cited several reasons. These include portfolio diversification, exposure to new technologies and business models, and access to high-growth investments.

The finding reflects a wider shift in sustainable finance. Many climate, infrastructure, energy transition, and social impact opportunities sit outside listed markets, especially at earlier stages of growth. As a result, private capital may play a larger role in funding innovation and scaling solutions.

Three quarters of global respondents said they either currently invest in private markets or plan to do so. Among investors with more than 30% of their portfolios allocated to sustainable investments, 55% already invest in private markets.

Alsford said investors increasingly view private markets as a route to both diversification and innovation. “Looking ahead, a majority of individual investors see greater opportunity for sustainable investments in private markets, especially for portfolio diversification and investing in innovation,” she said.

Greenwashing Remains The Top Concern

Despite rising interest, investors are becoming more aware of the obstacles that can limit sustainable investing adoption.

In 2026, 25% of respondents rated barriers to sustainable investing as “very significant,” compared with 21% in 2025. Greenwashing ranked as the top concern, cited by 32% of investors. Lack of transparency in data followed at 30%, while limited knowledge ranked third at 27%.

These concerns point to a key challenge for the industry. Investors want sustainable products, but they also want clearer information, stronger credibility, and better evidence that strategies do what they claim.

Globally, investors cited broad-based sustainability as their top investment theme at 25%. Economic empowerment and health and wellness followed at 15% each.

Sustainable Offerings Become A Wealth Management Differentiator

The survey also shows that sustainable investing capabilities influence advisor and platform selection. A majority of respondents, 79%, said they would select a financial advisor or investment platform based on its sustainable investing offerings.

That makes sustainability more than a product category. For wealth managers, it is becoming part of client acquisition, retention, and service differentiation.

For the first time, Morgan Stanley also polled individual investors in the Middle East and North Africa. Those results were not included in global totals to preserve comparability with the 2025 survey.

Still, MENA respondents showed similar views. More than 90% expressed interest in sustainable investing. In addition, 56% said they want to support real-world outcomes alongside market-rate returns. Broad-based sustainability ranked as their top priority, while greenwashing ranked as their leading concern.

The findings suggest that sustainable investing remains resilient across regions, even as investors scrutinize performance, credibility, and product quality more closely. For the industry, the next phase will depend less on proving demand and more on converting that demand into trusted, transparent, and financially compelling investment solutions.

Read the Morgan Stanley Sustainable Signals Survey here.

ESG News Editorial Team

The ESG News Editorial Team is comprised of veteran financial journalists and sustainability analysts dedicated to providing real-time, objective reporting on global ESG regulations, climate finance, and corporate governance. Our desk monitors daily developments from the SEC, IFRS, CSRD and international regulatory bodies to ensure our 1M+ readers receive accurate, data-driven insights into the evolving sustainable investment landscape. Follow the ESG News Editorial Team for expert reporting on global sustainability standards, ESG disclosures, and climate policy. Access over 10,000 investigative reports and real-time updates.