Asset Owners Focus On Governance As Concerns About Climate Risk Rise, FTSE Russell Survey Finds

FTSE Russell, LSEG’s global index provider, today published the findings from its ninth annual asset owner survey, exploring trends in sustainable investment adoption and asset owners’ priorities, concerns and approaches to key risks and opportunities globally.

While sustainable investment may be less visible, it is becoming more deeply embedded in investment decision-making. 84% of asset owners are now incorporating sustainability considerations into investment strategies, up from 73% in 2025. A further 15% are evaluating implementation, meaning nearly every respondent is either already taking sustainability factors into account or considering how to do so.

Sustainable investment practices are also becoming more globally consistent, with adoption rates across North America (85%), EMEA (83%) and Asia Pacific (84%) increasingly aligned. Investors are also applying sustainability considerations across larger proportions of their portfolios and focusing more closely on long-term risks and opportunities.

Stephanie Maier, Global Head of Sustainable, FTSE Russell, said:

“Asset owners continue to embed sustainability factors more deeply into investment decisions, despite market volatility and policy uncertainty. This reflects growing recognition that these factors can materially affect risk and returns, and warrant the same scrutiny as other investment considerations. Sustainability is increasingly part of core investment practice – a routine element of portfolio construction and risk management.”

The survey, which gathered insights from 402 asset owners across 24 countries, also shows investor priorities evolving amid a more uncertain global environment. Alongside growing material impacts of climate change, this has elevated climate physical risk as a priority1 among 26% of respondents this year, compared with 19% in 2025. For a third (32%) of respondents, governance, tax and shareholder rights has emerged as the most cited sustainability priority, rising from 18% in 2025.

Investors are also broadening their focus beyond traditional sustainability themes. Respondents identified health and healthcare-related risks (25%), technology and AI-related risks (24%), and food security (19%) as emerging areas of concern, reflecting the evolving range of sustainability factors that could influence long-term investment outcomes.

Meanwhile, the reputational risk of greenwashing and concerns about the availability of ESG data have fallen as barriers to adoption, cited by 22% and 25% respectively. This is a drop from 37% and 36% in 2025. However, concerns about the quality of corporate reporting have risen to the number one barrier to increased sustainable investment adoption (33%), which coincides with the levelling off of sustainability-related corporate reporting rates and changes to regulatory requirements in both Europe and North America.

The findings also reveal growing adoption of sustainability considerations across entire portfolios. More than half (51%) of asset owners now apply sustainability considerations to over 50% of their assets. This suggests that sustainable investment approaches are increasingly being incorporated into mainstream investment decision-making. At the same time, the use of custom sustainable investment indices in passive allocations increased from 21% in 2025 to 35% in 2026, reflecting demand for more tailored and cost-effective ways of implementing sustainable investment objectives.

Download the full FTSE Russell Sustainable Investment Asset Owner survey here.