The majority of companies view sustainability as a chance for value creation, according to a survey by Morgan Stanley.
In a recent survey titled "Sustainable Signals: Corporates 2025" by Morgan Stanley, it was revealed that sustainability is no longer just a risk mitigation strategy for businesses but a significant opportunity for innovation, growth, and measurable financial returns.
According to the report, 88% of surveyed companies view sustainability as primarily or partly a value creation opportunity, up from previous years. This increase indicates a growing alignment with long-term corporate strategies centered on sustainability.
Companies globally are prioritizing sustainability to innovate and expand their business. Sectors like utilities, consumer staples, real estate, and materials are significantly emphasizing sustainability to generate value.
More than 80% of companies report being able to measure the return on investment (ROI) for sustainability-related capital expenditures, research & development, and operational expenses, just as they do for other investments.
The shift toward value creation through sustainability is notably pronounced in North American and European companies, who have increased their prioritization of sustainability in corporate strategy by nine to ten points.
However, the report also highlights challenges. More than half of companies have experienced adverse effects from physical climate events recently, leading to increased operational costs for 54% of executives over the past 12 months. Additionally, 40% of executives report disruptions to the workforce due to climate-related events.
The top barriers to sustainability strategies, as reported by executives, are a high level of investment required and political volatility or uncertainty. Interestingly, North American investors are more likely to cite "political volatility or uncertainty" as a barrier.
APAC respondents are the most likely to have experienced climate-related events, with 73% reporting such occurrences. Despite these challenges, more than 80% of executives feel that their companies are "very" or "somewhat" prepared to increase resilience against climate-related threats.
The survey was conducted among executives at over 330 companies with revenues exceeding $100 million across North America, Europe, and APAC. Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley, stated that sustainability remains central to long-term value creation.
In summary, the report underscores the importance of sustainability as a key driver of value creation for businesses over the next five years. The primary ways sustainability is expected to drive value include increased profitability, higher revenue growth, lower cost of capital, and improved cash flow visibility. With more than two-thirds of executives anticipating their businesses being impacted by climate transition risks in the next 5 years, investing in sustainability to enhance resilience and future readiness is seen as a strategic value lever.
Companies are increasingly viewing sustainability as a major opportunity for innovation and growth in various sectors, such as utilities, consumer staples, real estate, and materials, for financial returns (finance, business). Despite the challenges posed by climate-related events, the majority of executives are preparing to increase resilience against these threats through investments in environmental-science and sustainability strategies.
