Companies see sustainability as a long-term value driver, with 88% of companies worldwide identifying it as either a primary (53%) or partial (35%) driver of long-term value creation, according to the Morgan Stanley Sustainable Signals: Corporates 2025 report, marking a 3% increase from 2024. This insight, derived from a survey of over 300 sustainability decision-makers at firms with revenues exceeding $100 million, shows the alignment of sustainability with business resilience and profitability.

As Jessica Alsford, Chief Sustainability Officer at Morgan Stanley, states, “Companies around the world report an alignment between corporate strategies and sustainability priorities as they seek to build resilient, future-ready businesses.”

Companies See Sustainability as a Long-Term Value Driver: A Strategic Imperative

The importance of sustainability as a strategic objective is emphasized in the paper. Eighty-eight percent of businesses worldwide regard sustainability as a value driver, with 53% viewing it as a major driver and 35% as a partial driver. This shift reflects a growing recognition that companies see sustainability as a long-term value driver, moving beyond compliance to become a core component of their business strategy.

Broader industry findings, like the Workiva research, which shows that 68% of businesses voluntarily implement sustainability laws like the Corporate Sustainability Reporting Directive (CSRD) to increase transparency, support this trend.

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Regional Perspectives

Regional variations in perceptions of sustainability are notable. In North America, companies are increasingly viewing sustainability as a long-term value driver, with a 9% increase in those who consider it such, reaching 62% (52% primary, 10% partial). European firms report a 10% rise, with 45% viewing it primarily as a value creation opportunity.

In the APAC region, only 35% view sustainability as a value driver, with 18% shifting toward risk management. For the first time, the analysis is also covering the MENA region (86%) and LATAM (67%), where businesses see significant potential for value creation despite climate constraints.

Table 1: Companies Viewing Sustainability as a Value Driver

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Industry-Related Knowledge

Views from different industries differ greatly. Due to their direct impact on the environment, the utilities, consumer staples, and real estate industries are rapidly establishing sustainability as a key value driver. The industrial and information technology sectors, on the other hand, emphasize striking a balance between risk reduction and value creation, which reflects operational complexity. This is consistent with broader trends, such as the increasing popularity of the circular economy concept in greening corporate operations.

Measuring ROI on Sustainability Investments

A critical finding is that over 80% of companies can quantify the return on investment (ROI) for sustainability-related expenditures, underscoring how companies see sustainability as a long-term value driver. This covers operating expenses, research and development, and investment costs.

Remarkably, 83% say they can measure the return on investment for sustainability just as readily as they can for other investments, with only 2% experiencing difficulty. A strong business case for sustainability is shown by the balanced spending, which allocates 22% to new projects, 30% to risk reduction, and 31% to both.

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Navigating Barriers to Progress

Barriers still exist despite advancements. The most significant barrier, as reported by 24% of businesses, is high investment requirements. Political, macroeconomic, and regulatory uncertainty rank second and third, at 15% each.

These difficulties are reflected in more general patterns, as the PwC research highlights that new laws, such as the CSRD, raise the need for reporting (PwC UK, 2025). However, now, 65% of businesses say they meet or surpass sustainability standards, up from 59% in 2023. The most significant increases, from 53% to 60%, are observed in the APAC region.

Table 2: Top Barriers to Sustainability Strategies

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Climate Impacts and Preparedness

Climate change poses immediate challenges, with 57% of companies globally reporting disruptions from events like extreme heat (55%), severe weather (53%), and rising operational costs (54%). In the APAC region, this rises to 73%.

Over the next five years, three-quarters expect physical climate risks to impact demand, costs, and investor relationships. Transition risks, such as policy changes and shifting markets, are also significant, with 71% anticipating higher operating costs.

Over 80% feel prepared to enhance resilience across infrastructure, supply chains, and community engagement.

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Future Opportunities and Challenges

According to 25% of businesses, the most significant sustainability opportunity for the future is increased profitability, followed by revenue growth (19%) and a decrease in the cost of capital (13%). Cost worries are an everyday concern, though, as 50% of respondents say that the biggest threat to their company is either increasing prices or decreased profitability.

Technological developments (33%), a favorable economic climate (32%), and rising customer demand (28%) are important enablers. These developments align with initiatives such as the adoption of circular business models and more open regulations.

Key Takeaway

The Morgan Stanley Sustainable Signals: Corporates 2025 report illustrates that companies see sustainability as a long-term value driver, with an increasing commitment to integrating it into their strategies. Businesses are using technology and stakeholder demand to develop resilient strategies despite obstacles such as high investment costs and climate-related threats. Businesses that follow these trends will be well-positioned for success in the future as sustainability becomes a top focus in the boardroom.

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