New Survey Shows High and Rising Individual Investor Interest in Sustainability

Individual investor interest in sustainable investing is high and rising, according to a new “Sustainable Signals” report by the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Wealth Management.

The survey polled 2,820 active individual investors across the U.S., Europe and Japan to assess interest in sustainability and understand where investors see the most opportunity and potential risk.

“Nearly 80% of individual investors believe that it is possible to balance market rate financial returns with a focus on sustainability,” says Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer and CEO of the Institute for Sustainable Investing.

“A majority of individual investors also express a desire for their investments to advance positive environmental and social impact, creating opportunities for finance professionals to meet these needs.”

According to the survey, more than three quarters (77%) of individual investors globally are interested in investing in companies or funds that aim to achieve market-rate financial returns while considering positive social and/or environmental impact.

In addition, more than half (57%) say their interest has increased in the last two years, while 54% say they anticipate boosting allocations to sustainable investments in the next year.

When asked to pick their top sustainable investing theme, 15% of investors selected climate action, followed by healthcare (13%), water solutions (11%) and circular economy (11%).

Among concerns holding investors back survey respondents cited a lack of transparency and trust in sustainability reporting (63%) and the potential for greenwashing (61%) as concerns that prevent them from making sustainable investments.

They also express an interest in investing in social themes but uncertainty around where to begin.