Individual investor interest in sustainable investing has reached a record high even as actual portfolio allocations saw a marginal decline, according to the latest “Sustainable Signals” report from the Morgan Stanley Institute for Sustainable Investing. The global survey of 2,250 active investors found that 92% are now interested in the sector, up from 88% in 2025.
While interest is surging, the average portfolio allocation dropped slightly to 31% from 33% last year. Despite this, three-quarters of investors maintain some exposure to sustainable assets, with half having entered the space more than five years ago.
“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 at Morgan Stanley. “A majority of individual investors see greater opportunity for sustainable investments in private markets.”
Financial returns remain the primary motivator, with 85% of interested investors seeking to match or outperform traditional market benchmarks. Confidence in performance is the leading reason cited by the 64% of respondents who plan to increase their sustainable holdings over the next 12 months.
The report also highlighted a significant shift toward private markets. Approximately 64% of investors believe private markets offer superior sustainable opportunities compared to public equivalents, citing benefits such as portfolio diversification and access to high-growth innovations and new technologies.
However, the path to investment is not without hurdles. More investors now rate barriers to entry as “very significant” compared to 2025. Greenwashing remains the top concern for 32% of respondents, followed closely by a lack of data transparency and limited investment knowledge.
The findings also suggest a shift in the wealth management landscape, as 79% of investors stated they would choose a financial advisor or platform based specifically on their sustainable investing expertise.
For the first time, the survey included the Middle East and North Africa (MENA) region. Investors there mirrored global trends, with over 90% expressing interest and identifying greenwashing as their primary concern.
