Asset owners in Asia-Pacific are increasingly embracing sustainable investment strategies, outpacing peers in Europe and North America as climate concerns intensify and supportive regulatory developments gather pace, according to FTSE Russell’s 2025 global survey.
The FTSE Russell Sustainable Investment Asset Owner Survey is an annual global study of institutional investors – such as pension funds, insurers, sovereign wealth funds and other asset owners – on how they incorporate sustainability and climate factors into investment decisions, providing a snapshot of global trends, priorities and challenges in sustainable investing.
Some 79 per cent of Asia-Pacific respondents said they are implementing sustainability considerations in some form, compared with 74 per cent in Europe and 71 per cent in North America, the survey of 415 asset owners across 24 countries found. The region accounted for 31 per cent of participants, slightly more than North America’s 29 per cent.
Historically, Asia lagged Western markets due to weaker regulatory frameworks and a focus on industrial growth. But large-scale clean energy investments in China, Japan’s Green Transformation Strategy that aims to mobilise over JPY150 trillion (US$1 trillion) toward carbon neutrality by 2050, and new disclosure regimes in financial hubs such as Singapore and Hong Kong have shifted investor attitudes.
Asia’s leadership is also evident in debt markets. Regional green bond issuance reached US$180 billion in 2025, up 29 per cent from 2024. China issued its first sovereign green bond listed in London, while Japan has introduced sovereign transition bonds, with US$3.6 billion issued so far.
Globally, climate change remains the top concern. Around 85 per cent of asset owners placed themselves in the “most concerned” category about climate risk, compared with 76 per cent a year earlier.
Overall, 80 per cent of respondents are incorporating sustainability or climate considerations into strategic asset allocation, and 73 per cent are implementing sustainable investment products in portfolios – a level that has remained steady despite a backlash against sustainable finance.
Financial performance and risk management were cited as the primary motivations for sustainable investment, by 56 per cent and 54 per cent of respondents respectively. About one in four asset owners are still assessing whether to adopt such strategies, with concerns about greenwashing, data quality and regulation acting as barriers.
Regional trends diverge sharply. Europe’s market appears to be plateauing after years of rapid growth, with two-thirds of funds already classified under the European Union’s sustainable fund rules. Investors there increasingly view complex regulation as a constraint, with 34 per cent saying it hinders market growth compared with 20 per cent who see it as supportive.
In the United States, sustainable investment adoption lags other regions, with 67 per cent of asset owners pursuing such strategies. Environmental, social and goverance (ESG) has become politicised in recent years, although concern about climate risk remains high among investors.
Despite regional differences, the study found growing convergence in investor behaviour worldwide. Many asset owners are focusing on strategies that can enhance returns or reduce risk, rather than pursuing sustainability objectives for their own sake.
Participants included pension funds, insurers, sovereign wealth funds, endowments and family offices. Nearly a quarter managed assets of US$100 billion or more.