Demand for Sustainable Investing Grows—but Portfolios Lag Behind
Investment decisions are tempered by market conditions, portfolio considerations and evolving expectations.
Sustainable investing continues to gain traction with investors—but the latest data suggest a more nuanced story than simple growth. According to a new global survey from the J.P. Morgan Institute for Sustainable Investing, interest is rising, expectations are evolving, and portfolio decisions are becoming more selective.
According to the survey, 79% of financial adviser respondents said they would select an adviser or platform based on sustainable investing capabilities, up from 77% last year. However, while 92% of respondents expressed interest in sustainable investing—up four percentage points year-over-year—the average portfolio allocation edged down slightly to 31%, from 33% last year.
Returns Remain Key
More than 80% of investors cited financial returns as a primary driver of their interest in sustainable investing. For some, that meant pursuing real-world impact alongside market-rate returns (45%); others agreed that sustainable investments may offer stronger returns (40%). Reflecting that confidence, 64% of respondents said they planned to increase their exposure to sustainable investments in the year ahead, while 28% expected to maintain current allocations, often for diversification purposes. Just 5% anticipated reducing exposure, most commonly due to disappointing returns.
Those surveyed did not view sustainable investing as a niche or emerging allocation, as roughly three-quarters held such investments in their portfolios. Of the investors who were familiar with the breakdowns of their portfolios, 50% first invested in sustainable investing more than five years ago. By contrast, 8% said they first invested in them within the past two years.
A Broader Thematic View
At the same time, investors reported expanding how they thought about sustainable investing opportunities, taking a broader, more integrated approach across environmental and social themes. One-quarter of respondents said their top priority was broad-based sustainability, spanning multiple goals. Financial inclusion followed alongside health and wellness, each cited by 15% as their primary focus. Across all seven themes included in the survey—ranging from climate action and biodiversity to economic empowerment and diversity and inclusion—each ranked among the top two priorities for at least 20% of investors.
Regional differences added another layer to the analysis. Broad-based sustainability ranked as the top priority across North America, Europe and Asia-Pacific, but other themes varied in prominence. Economic empowerment was a close second in North America and Asia-Pacific, while in Europe, both climate action and the health and wellness category stood out more strongly.
A global sample of 2,250 individual investors was surveyed across North America, Europe and the Asia-Pacific region from February 19 through March 16.