Institutional investors are reassessing their investment approaches in light of persistent geopolitical instability, evolving regulatory frameworks and demands for ESG transparency, according to the 2025 Voice of the Asset Owner qualitative survey conducted by data providers Morningstar Indexes and Sustainalytics.
The report is based on interviews with 25 asset owners from North America, Europe and the Asia-Pacific. It highlights that recent global developments—including trade tensions, conflict in Eastern Europe and signs of de-globalisation—are prompting asset owners to reconsider their geographic exposure, particularly in the US, and to explore more regionally diverse and private market allocations.
Private markets are gaining traction as asset owners seek greater control over company operations, steadier returns and opportunities for deeper ESG engagement. However, challenges around data availability and reporting standards in private markets remain a concern, especially for investors looking to apply ESG criteria consistently across their portfolios.
Asset owners add nature, biodiversity to investments, study shows
The survey found that while sustainable investing remains a priority, asset owners are increasingly moving away from the umbrella term “ESG” in favour of a more granular focus. Environmental, social and governance elements are being treated as distinct factors, according to the findings, with varied approaches depending on asset class and market context.
Asset owners are evolving their strategies from portfolio decarbonisation to broader systemic impact, with an emphasis on “real-world emissions reduction”. This shift reflects a growing preference for strategies that go beyond compliance to address material climate risks across the economy, shared the analysts.
On regulation, the asset owner community view it as a “double edged sword.” While supportive of transparency and disclosure, many are concerned about the impact of regulatory rollbacks, particularly in the US and EU. The lack of standardisation in sustainability reporting and taxonomy is seen as a barrier to efficient cross-border investment and decision-making, shared the respondents.
