Global interest in sustainable investing rises four points to 92%, yet average 2026 portfolio allocation slightly down from 2025 (31% versus 33%)
For majority of investors, expectations for financial returns drive sustainable investment interest level and decision-making
64% of investors see greater sustainable investing opportunity in private markets compared to publicly traded companies or instruments

Individual investor interest in sustainable investing continues to rise even as allocations slightly decline, according to a new "Sustainable Signals" report by the Morgan Stanley Institute for Sustainable Investing. The survey polled 2,250 active individual investors across North America, Europe and Asia Pacific (APAC) between February and March of this year to assess attitudes toward sustainable investing and where investors see the greatest opportunities and challenges.

Globally, 92% of respondents say they are very or somewhat interested in sustainable investing, up from 88% in 2025. Three quarters already have some portfolio exposure to sustainable investments, 50% of whom first included sustainable options more than five years ago. Still, the average allocation in 2026 is down slightly from 2025 (31% versus 33%), pointing to a potential disconnect between sentiment and behavior.

"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," said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley. "Looking ahead, a majority of individual investors see greater opportunity for sustainable investments in private markets, especially for portfolio diversification and investing in innovation."

Notable survey findings include:

Financial returns – For those interested in sustainable investing, 85% say the top reason is either support for real-world outcomes alongside market-rate returns or the expectation that sustainable investments may offer stronger returns than traditional peers. Expectations about returns also drive decision-making. Among the 64% planning to increase their allocation to sustainable investments over the next year, confidence in performance is the most common reason. Conversely, the 5% planning to decrease their allocation cite weaker returns as the primary reason.
Private markets – 64% of respondents see greater opportunity for sustainable investments in private versus public markets, as a way to diversify portfolios, invest in new technologies or business models, and add exposure to high-growth investments. While three-quarters of global respondents either currently invest in private markets or plan to, those with the most portfolio exposure to sustainable investments (>30%) are more likely to invest in private markets today (55%).
Priorities and concerns – Globally, investors cite broad-based sustainability as their top investment theme (25%), followed by economic empowerment, and health and wellness (both 15%). Compared to 2025, more respondents rate barriers to sustainable investing as "very significant" (25% versus 21%), with greenwashing topping the list (32%), followed by lack of transparency in data (30%) and limited knowledge (27%).
Financial advisors – The majority of respondents (79%) indicate that they would select a financial advisor or investment platform based on their sustainable investing offerings – making it a differentiating factor for wealth mangers.

For the first time, Sustainable Signals polled individual investors in the Middle East and North Africa (MENA). While not included in global totals to maintain comparability to the 2025 survey, MENA respondents share similar views to those in other regions. The majority are very or somewhat interested in sustainable investing (over 90%), want to support real-world outcomes alongside market-rate returns (56%), and rank broad-based sustainability and greenwashing as their top priority and concern, respectively.

The Sustainable Signals series was launched in 2015 and measures the views of individual investors, institutional investors and corporates on sustainable investing. View the full results of the latest survey here.

About Morgan Stanley

Morgan Stanley (NYSE:MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

About Morgan Stanley Institute for Sustainable Investing

The Morgan Stanley Institute for Sustainable Investing (The Institute), established in 2013, aims to accelerate the growth and adoption of sustainable finance across capital markets. The Institute produces thought leadership and develops partnerships and programs to inform and empower clients, investors and the next generation of sustainability leaders. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting.

Disclosures:

This material was published in April 2026 and has been prepared for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the Morgan Stanley Research Department and is not a Research Report as defined under FINRA regulations. This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it.

Morgan Stanley Smith Barney LLC and Morgan Stanley & Co. LLC (collectively, "Morgan Stanley"), Members SIPC, recommend that recipients should determine, in consultation with their own investment, legal, tax, regulatory and accounting advisors, the economic risks and merits, as well as the legal, tax, regulatory and accounting characteristics and consequences, of the transaction or strategy referenced in any materials. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Morgan Stanley, its affiliates, employees and Morgan Stanley Financial Advisors do not provide tax, accounting or legal advice. Individuals should consult their tax advisor for matters involving taxation and tax planning, and their attorney for matters involving legal matters.

Past performance is not a guarantee or indicative of future performance. Historical data shown represents past performance and does not guarantee comparable future results. Certain statements herein may be "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical facts or statements of current conditions, but instead are based on management's current expectations and are subject to uncertainty and changes in circumstances. These statements are not guarantees of future results or occurrences and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond our control. In addition, this report contains statements based on hypothetical scenarios and assumptions, which may not occur or differ significantly from actual events, and these statements should not necessarily be viewed as being representative of current or actual risk or forecasts of expected risk. Actual results and financial conditions may differ materially from those included in these statements due to a variety of factors. Any forward-looking statements made by or on behalf of Morgan Stanley speak only as to the date they are made, and Morgan Stanley does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

Certain portfolios may include investment holdings deemed Environmental, Social and Governance ("ESG") investments. For reference, environmental ("E") factors can include, but are not limited to, climate change, pollution, waste, and how an issuer protects and/ or conserves natural resources. Social ("S") factors can include, but not are not limited to, how an issuer manages its relationships with individuals, such as its employees, shareholders, and customers as well as its community. Governance ("G") factors can include, but are not limited to, how an issuer operates, such as its leadership composition, pay and incentive structures, internal controls, and the rights of equity and debt holders. You should carefully review an investment product's prospectus or other offering documents, disclosures and/or marketing material to learn more about how it incorporates ESG factors into its investment strategy.

ESG investments may also be referred to as Sustainable investments, impact aware investments, socially responsible investments or diversity, equity, and inclusion ("DEI") investments. It is important to understand there are inconsistent ESG definitions and criteria within the industry, as well as multiple ESG ratings providers that provide ESG ratings of the same subject companies and/or securities that vary among the providers. This is due to a current lack of consistent global reporting and auditing standards as well as differences in definitions, methodologies, processes, data sources and subjectivity among ESG rating providers when determining a rating. Certain issuers of investments including, but not limited to, separately managed accounts (SMAs), mutual funds and exchange traded-funds (ETFs) may have differing and inconsistent views concerning ESG criteria where the ESG claims made in offering documents or other literature may overstate ESG impact. Further, socially responsible norms vary by region, and an issuer's ESG practices or Morgan Stanley's assessment of an issuer's ESG practices can change over time.

Portfolios that include investment holdings deemed ESG investments or that employ ESG screening criteria as part of an overall strategy may experience performance that is lower or higher than a portfolio not employing such practices. Portfolios with ESG restrictions and strategies as well as ESG investments may not be able to take advantage of the same opportunities or market trends as portfolios where ESG criteria is not applied. There is no assurance that an ESG investing strategy or techniques employed will be successful. Past performance is not a guarantee or a dependable measure of future results. For risks related to a specific fund, please refer to the fund's prospectus or summary prospectus.

Investment managers can have different approaches to ESG and can offer strategies that differ from the strategies offered by other investment managers with respect to the same theme or topic. Additionally, when evaluating investments, an investment manager is dependent upon information and data that may be incomplete, inaccurate or unavailable, which could cause the manager to incorrectly assess an investment's ESG characteristics or performance. Such data or information may be obtained through voluntary or third-party reporting. Morgan Stanley does not verify that such information and data is accurate and makes no representation or warranty as to its accuracy, timeliness, or completeness when evaluating an issuer. This can cause Morgan Stanley to incorrectly assess an issuer's business practices with respect to its ESG practices. As a result, it is difficult to compare ESG investment products.

The appropriateness of a particular ESG investment or strategy will depend on an investor's individual circumstances and objectives. Principal value and return of an investment will fluctuate with changes in market conditions.

Private Funds (which include hedge funds are private equity funds) often engage in speculative investment techniques and are only appropriate for long-term, qualified investors. Investors could lose all or a substantial amount of their investment. They are generally illiquid, not tax efficient, and have higher fees than many traditional investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260422004317/en/

Media Relations Contact:

Carrie Hall

Carrie.Hall@morganstanley.com

Morgan Stanley Sustainable Signals: Individual Investors Remain Positive on Sustainable Investing Despite Small Dip in Allocations