ESG adoption remains robust, particularly in Europe, the Middle East and Africa (EMEA) and Asia-Pacific (APAC), even as global adoption has edged lower from the record-high level in 2023 and 2024, according to the Capital Group ESG Global Study 2025.
The ESG Global Study reveals four key takeaways:
1. ESG shows resilience amid macroeconomic and geopolitical uncertainties
- Global ESG adoption stands at 87%, down slightly from all-time high of 90% in 2023 and 2024.
- 97% of existing APAC investors in strategies with an ESG or sustainable investment criteria plan to maintain or raise allocations in the next 12 months.
- Geopolitical risk (81%), the global economic growth outlook (67%) and regulatory or policy changes (62%) are seen as the top three headwinds to allocating to ESG or sustainable strategies in the next 12 to 24 months.
2. Investors refine approach to asset classes and strategies
- 48% of respondents globally now apply ESG approaches in private markets – the highest level since the ESG Global Study began in 2021.
- Diversification (67%), efficient access to multiple ESG themes (48%) and adaptability to changing market conditions (44%) are cited as the main benefits of multi-thematic strategies over single-thematic ones.
- 58% of investors believe companies with credible transition plans can outperform over the long term, while 74% say fundamental research is key to identifying those companies.
3. Energy transition, water and health are seen as durable investment themes
- Six in 10 investors have a strong conviction in investment opportunities tied to energy transition, followed by clean water (52%) and health (51%).
- APAC (71%) has the highest share of respondents that engage with asset managers on how they address nature, and more than two-thirds (68%) have either invested or are planning to invest in thematic funds that address nature-related issues.
4. AI’s environmental impact moves into sharper focus
- Globally, 73% of investors identify AI’s energy consumption and greenhouse gas emissions as top ESG risks for the next two to three years – up sharply from 54% last year.
- Water consumption is also in the spotlight, with 43% of respondents flagging it as a material AI-related ESG risk – more than double the percentage in 2024 (18%).
- 58% of respondents see AI’s energy-intensive nature as a significant challenge to energy transition, yet 56% believe AI could fuel innovation to accelerate energy transition.
“This year’s ESG Global Study highlights the enduring role of ESG in the investment process as investors continue to evolve their approach. The consideration of ESG issues in fixed income and private markets are also gaining traction,” said Jessica Ground, Global Head of ESG, Capital Group.
“As the AI boom continues, investors are more alert than ever to the environmental risks posed by AI – especially around energy use and water consumption. At the same time, they’re exploring how AI can drive innovation and accelerate progress on energy transition.”
