Majority of Corporations Perceive Sustainability as a Value-Boosting Chance, Reveals Morgan Stanley Poll
In a recent survey titled "Sustainable Signals: Corporates 2025," conducted by Morgan Stanley, it has been revealed that there is a clear and growing trend of companies increasingly viewing sustainability as a value creation opportunity.
Regionally, Europe leads in this regard, with the European Union’s Corporate Sustainability Reporting Directive (CSRD) mandating almost 50,000 companies to report sustainability metrics as of 2024. This extensive regulatory framework creates strong incentives for companies in Europe to embed sustainability into their core strategies to unlock investment, drive innovation, and gain competitive advantage.
North America also emphasizes ESG and sustainability, though political shifts have created some pushback and regulatory uncertainty, leading to a mix of advancing momentum and pauses in disclosure requirements. Australia is advancing in sustainability with its launch of a sustainable finance taxonomy, showing growing focus on transition finance globally.
By industry, the healthcare sector benefits from sustainability-driven value creation through innovations addressing aging demographics and healthcare efficiency, enabled by technologies improving early disease detection and reducing costs. Companies with strong ESG strategies across sectors are seeing tangible financial benefits: firms with ESG strategies are twice as likely to realize revenue increases of at least 10%, and those with high ESG scores benefit from approximately 10% lower cost of capital.
Across sectors, sustainability is no longer just risk management or regulatory compliance but a driver of innovation, efficiency, and long-term growth. Approximately 75% of executives now see sustainability as tied to better business results, and 76% consider it central to their strategy. Companies are adopting “double materiality” assessments to evaluate both financial impacts and societal effects as part of sustainability strategy development.
The survey also highlighted that more than 80% of respondents feel that their companies are "very" or "somewhat" prepared to increase resilience against climate-related threats. Over 57% of executives report that their companies have experienced climate-related events over the past 12 months that impacted operations. The most commonly cited climate-related events include extreme heat (55%), extreme weather or storms (53%), and wildfires or smoke (36%).
However, challenges remain. The top barrier to sustainability strategy globally is a "high level of investment required," cited by 24% of respondents. Political volatility or uncertainty is the second top barrier, cited by 17% of respondents.
Despite these challenges, executives are optimistic about the future. 65% of executives describe their companies' sustainability strategy as meeting or exceeding expectations. Moreover, 60% of executives anticipate negative impacts from physical climate risks in the next 5 years.
Increased profitability, higher revenue growth, lower cost of capital, and improved cash flow visibility are the primary ways sustainability could drive value creation over the next five years. Technological advancements and growing customer demand are identified as the most important factors in delivering on sustainability strategies.
In conclusion, sustainability is increasingly embedded as a core value creation driver especially in Europe and developed markets, with varying impact across industries such as healthcare, finance, and private equity. The regulatory environment in Europe strongly accelerates this trend, while industries directly linked to emerging social challenges and technological innovation show pronounced momentum in leveraging sustainability for growth.
Science plays a crucial role in addressing climate-change and environmental-science, as technological advancements are identified as the most important factors in delivering on sustainability strategies. companies with strong ESG strategies across sectors are not only seeing tangible financial benefits such as increased profitability, higher revenue growth, lower cost of capital, and improved cash flow visibility but also gain competitive advantage through innovation in fields like healthcare and finance. Despite challenges like a high level of investment required and political volatility, executives remain optimistic about the future and the value creation potential of sustainability over the next five years.
