The Strategic Shift: Why 84% of Global Institutional Investors are Pivoting to Sustainable Assets
In the rapidly evolving landscape of global finance, sustainability has transitioned from a niche ethical consideration to a fundamental pillar of risk management and capital allocation.
According to the latest Sustainable Signals report by the Morgan Stanley Institute for Sustainable Investing (released November 2025), institutional investors are significantly re-aligning their portfolios. At Laja Capital, we analyze these global shifts to help our clients navigate the complexities of capital raising and strategic advisory.
1. Accelerating Capital Allocation
The survey, which polled over 900 global institutional investors, reveals a definitive trend: 84% of institutional investors expect to increase their proportion of sustainable assets under management (AUM) within the next two years.
Asset Owners Leading the Charge: Approximately 86% of asset owners plan to increase allocations, driven by evidence of strong financial performance and a maturing track record of sustainable funds.
Regional Dominance: North American asset owners are leading the trend at 90%, followed by APAC at 85% and Europe at 82%.
2. From Mitigation to Adaptation: Shifting Priorities
While Energy Efficiency and Renewable Energy remain the top two investment priorities globally, 2025 has seen a significant rise in Climate Adaptation.
Top 3 Priority: Climate adaptation has jumped from 6th place in 2024 to 3rd place in 2025.
Focus Areas: Investors are now seeking opportunities in water infrastructure, electric grid modernization, and advanced data analytics to build resilience against physical climate risks.
3. Sustainability as a Risk Management Tool
The narrative around sustainable investing has shifted from "impact" to "protection." More than 80% of asset managers and owners now view sustainability as an essential component of managing investment risk.
Price Impacts: Over 75% of investors anticipate that physical climate risks will directly impact asset prices within the next five years.
Case-by-Case Integration: Half of the surveyed investors now integrate climate resilience as a core part of their risk-return models for physical assets like Real Estate and Infrastructure.
4. Navigating the Challenges
Despite the bullish outlook, the path is not without obstacles. Investors have flagged a rise in "very significant" concerns, moving from 25% in 2024 to 38% in 2025. The primary barriers include:
Data Availability: The need for high-quality, transparent ESG data.
Regulatory Fluctuations: Shifting policy guidance across different jurisdictions.
Political Uncertainty: The impact of global political cycles on long-term sustainability frameworks.
Laja Capital’s Perspective: Architecting Resilient Portfolios
At Laja Capital, we believe that the integration of sustainability is no longer optional for firms seeking long-term stability and growth. Whether through Structured Debt for green infrastructure or Corporate Advisory for energy transition, we provide the expertise required to align your business with global institutional standards.
"The majority of investors now recognize that financial performance and sustainability are inextricably linked. At Laja Capital, we translate these global insights into local execution."