Morgan Stanley: 66% of investors fold AI into sustainability

The survey results sit alongside other findings in Morgan Stanley's Sustainable Signals report that point to a more cautious but still committed investor base. Over 80% of institutional investors anticipate increasing sustainable allocations over the next two years, but the report describes that growth as slower and more measured than the pace in 2025. Only 2% of asset owners and 4% of asset managers expect growth of over 10 percentage points over the two years, compared with around a one-fifth increase recorded last year.

Within that broader picture, AI is being treated as one element of sustainability rather than a standalone cause. Among the 590 investors incorporating AI into their broader sustainable strategies, 24% focused on social and environmental impacts such as carbon and water footprints and data centers' effect on local communities, and around 15% assessed economic impacts including employment, supply chain transparency, public policy and regulation.

The report also frames sustainability as a risk-management tool. More than 90% of asset owners and asset managers somewhat or strongly agreed that sustainable investing options were a key differentiator in awarding or winning mandates, and more than two-thirds cited reducing risk across portfolios as a reason to prioritize sustainable investments, up from half in 2025. Jessica Alsford, chief sustainability officer at Morgan Stanley, said in an Oct. 22 press release that 2026 shows continued commitment to sustainability at a more measured pace with a sharper focus on managing risk.