Summary: Sustainable investments have grown by 49% over the past two years, reaching US$16.7 trillion globally, according to the Global Sustainable Investment Alliance (GSIA). The sharp rise reflects a fundamental shift in investor priorities, with environmental, social, and governance (ESG) factors moving from niche practice to mainstream strategy azzet.com GSIA.
Sustainable investing is experiencing unprecedented growth, with the Global Sustainable Investment Review 2025 reporting a 49% increase in ESG-focused assets since 2023. The surge, unveiled during COP30 in Belém, Brazil, underscores how climate change, regulatory reforms, and shifting investor sentiment are reshaping global financial markets azzet.com.
The GSIA noted that sustainable investments now total US$16.7 trillion, driven by rising demand for renewables, green bonds, and socially responsible funds. Once considered a marginal approach, ESG integration is now viewed as a systemic consideration across portfolios, with institutional and retail investors alike recognizing its role in long-term resilience GSIA.
Key drivers behind the surge include:
- Regulatory pressure: Enhanced sustainability disclosure requirements in the EU and other regions have accelerated adoption.
- Generational demand: Surveys show Gen Z and Millennials overwhelmingly favor ESG investments, citing both ethical and financial motivations Morgan Stanley.
- Market performance: ESG indices rebounded strongly in 2025, outperforming traditional benchmarks amid volatility, particularly in clean energy and green bond markets London Stock Exchange Group.
Despite the rapid expansion, experts caution that current investment levels remain insufficient to meet global climate goals. The GSIA stressed that while momentum is strong, more capital must flow into climate adaptation, biodiversity protection, and social equity initiatives.
Financial analysts highlight that ESG’s rise is not only about ethics but also risk management. Companies with poor sustainability practices face reputational damage, regulatory penalties, and stranded assets, making ESG integration a safeguard against long-term instability.
The 49% surge in sustainable investments signals a decisive shift in global finance, with ESG now firmly embedded in mainstream strategy. Yet, as climate challenges intensify, the question remains whether this momentum can scale fast enough to meet the demands of a rapidly changing world.
Sources: azzet.com GSIA Morgan Stanley London Stock Exchange Group
