Morgan Stanley Sustainable Signals: Individual Investors Continue to Show High Levels of Interest in Sustainable Investing in New Survey

• Majority of investors globally (88%) show interest in sustainable investing, including nearly all surveyed Gen Z (99%) and Millennial (97%) investors
• For the 59% of investors who plan to increase sustainable investments in the next year, confidence in performance is the top reason
• Clean energy solutions to help catalyze global energy transition top list of investment priorities

Individual investor interest in sustainability remains strong and stable, according to a new "Sustainable Signals" report by the Morgan Stanley Institute for Sustainable Investing. The survey polled 1,765 active individual investors with more than $100,000 in investable assets across North America, Europe and Asia Pacific (APAC) between February and March of this year to assess attitudes toward sustainable investing and where investors see the greatest opportunities and challenges.

The majority of global investors surveyed (88%) say they are interested in sustainable investing. Younger investors show the most interest in sustainability, with 99% of Gen Z and 97% of Millennial investors expressing interest. Nearly two-thirds of all investors (64%) say their interest has increased in the last year.

"Our Sustainable Signals survey shows that investors across demographic groups and regions continue to believe that investments can achieve both positive real-world outcomes and competitive market-rate returns," said Jessica Alsford, Chief Sustainability Officer and Chair of the Institute for Sustainable Investing at Morgan Stanley. "Younger investors plan to increase portfolio allocations to sustainable options at higher rates and prioritize a broader range of environmental and social issues when making investment decisions. This suggests that sustainability could become an even greater focus area for investors in the future as younger generations gain more financial influence."

Other notable survey findings include:

• Drivers of Allocation Decisions – Over half of investors surveyed (59%) say they plan to increase their portfolio allocations to sustainable investments in the next year. Growing confidence that these options offer returns comparable to or better than traditional investments was cited as the top reason (24%). Investors also chose seeing the real-world impacts of climate change as a key reason for increasing their allocation. Just under a third (31%) plan to maintain their current allocation to sustainable investments, with portfolio diversification given as the most common reason.
• Energy Transition – Across all regions, investors ranked renewable energy and energy efficiency as top investment priorities, and over 80% see the energy transition as an opportunity to generate returns. When it came to other sustainable solutions, regional differences emerged. North America respondents placed greater focus on healthcare affordability and innovation, while investors in Europe and APAC put more emphasis on energy storage and battery technology as well as regenerative agriculture and sustainable land use.
• Financial Advice – Almost 80% of global investors surveyed are likely to choose a financial advisor or investment platform based on sustainable investing offerings. This is stronger for Gen Z (96%) and Millennials (92%), suggesting that opportunity exists for advisors to differentiate their offerings and help clients meet their sustainability goals, especially as wealth transfers to younger investors in the years to come.

The Sustainable Signals series was launched in 2015 and measures the views of individual investors, institutional investors and corporates on sustainable investing. View the full results of the latest survey here.

About Morgan Stanley

Morgan Stanley (NYSE:MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit www.morganstanley.com.

About Morgan Stanley Institute for Sustainable Investing

The Morgan Stanley Institute for Sustainable Investing (The Institute) builds scalable finance solutions that seek to deliver competitive financial returns while driving positive environmental and social impact. The Institute creates innovative financial products, thoughtful insights and capacity building programs that help maximize capital to create a more sustainable future. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting.

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