Key Impact Points
- 88% of global companies view sustainability as a long-term value creation opportunity—up 3% from 2024.
- 83% of companies report being able to measure return on investment (ROI) for sustainability activities just as they do for other capital priorities.
- 57% of companies experienced climate-related disruptions in the past year, and over 80% say they are prepared to strengthen resilience.
Companies Align Sustainability with Business Value
Sustainability has shifted from an optional responsibility to a core business strategy for most corporates, according to Sustainable Signals: Corporates 2025, a new report from Morgan Stanley’s Institute for Sustainable Investing.
88% of companies worldwide now see sustainability as a value creation opportunity, up three points from 2024. This reflects growing strategic alignment between corporate goals and environmental priorities.
“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.”
Measuring the Impact of Sustainability
More than four out of five companies (83%) report they can measure ROI on sustainability investments—covering capital expenditures (capex), R&D, and operating expenses (opex)—with the same rigor applied to other business investments.
Regional differences reveal even higher confidence in ROI measurement in Asia Pacific (88%), followed by North America (82%) and Europe (79%).
Companies Are Seeing Results
65% of respondents say their sustainability strategies are “meeting” or “exceeding expectations,” up from 59% in 2024. However, high investment needs remain the top barrier (24%), followed by political volatility and challenges in assessing current sustainability performance.
Despite cost pressures, the majority of investments split evenly between risk-reducing operational efforts (opex) and forward-looking innovation (capex/R&D).
Climate Events Are Hitting Operations
57% of companies have already experienced disruptions from climate-related events such as extreme heat, storms, and flooding—with the rate spiking to 73% in Asia Pacific.
Top impacts include:
- Increased operational costs (54%)
- Workforce disruptions (40%)
- Revenue losses (39%)
Looking ahead, more than two-thirds expect climate risks to affect demand, costs, and investor expectations. More than 80% feel “very” or “somewhat” prepared to enhance resilience across infrastructure, supply chains, and financial planning.
Future Outlook: Profitability vs. Cost Pressures
In the next five years, 25% of companies expect higher profitability as the top sustainability benefit, followed by revenue growth and a lower cost of capital. However, over 50% still cite costs—whether from regulation, process changes, or raw material pricing—as the main challenge.
Industries such as Consumer Discretionary and Real Estate report the greatest optimism, while Utilities and Information Technology show greater focus on risk reduction.
Follow SDG News on LinkedIn
