8.2 Motivation for Sustainable Investments
Sustainable investments continue to be viewed by institutional investors primarily through a risk-return lens. The key consideration is whether sustainability factors affect long-term value creation, the resilience of business models and the quality of capital allocation. However, there appears to be some discrepancy between ambition and implementation. In a 2024 survey of institutional investors, 88% reported having increased their use of ESG information. At the same time, 92% believed that ESG-related initiatives adversely affected short-term corporate performance and placed greater weight on these effects than on potential long-term benefits. Accordingly, 66% expected to give less consideration to ESG factors in future investment decisions.1
This “say-do gap” points to a fundamental tension: investors recognise the importance of sustainability-related risks and opportunities, while simultaneously facing pressure from short-term return expectations and economic uncertainty. Among respondents, 63% identified changes in the economic cycle as the most important factor influencing their investment strategies over the next two years, while 55% also expected climate change to have a significant impact. Sustainability therefore remains relevant, but is increasingly assessed on the extent to which it can be credibly linked to financial materiality and long-term value creation.1
The “Big Three” asset managers and proxy advisors focus on financial importance of ESG for long-term value
In their proxy voting guidelines, BlackRock, Vanguard, and State Street Global Advisors have in recent years defined clear requirements related to climate action, the transition to a net-zero economy, board and workforce diversity, and human capital management. Proxy advisors such as ISS and Glass Lewis have also introduced similar standards. At the same time, the 2026 guidelines allow greater flexibility, both in the choice of reporting frameworks and in the identification of material ESG issues. This more differentiated approach is also reflected in additional thematic guidelines.2
BlackRock CEO Larry Fink’s 2026 Annual Chairman’s Letter to Investors places the long-term perspective at the center of its message. In an environment shaped by geopolitical uncertainty, technological change and the reconfiguration of global trade relationships, a growing share of economic value creation is expected to be financed through the capital markets, creating opportunities for long-term investors. At the same time, the letter highlights that the resulting prosperity has so far primarily benefited those who already own financial assets. Broader access to long-term investing, for example through retirement systems and modernized capital markets, could therefore not only enhance individuals’ financial security but also support the financing of growth and economic transformation.3
For sustainable investing, this means that areas such as energy supply, infrastructure, climate adaptation, technological transformation and economic resilience are increasingly viewed as long-term capital market considerations. The focus is therefore shifting away from ESG classification in isolation and towards identifying the companies and projects capable of creating lasting value in a changing economic environment.
At the same time, the quality and credibility of available sustainability information remain critical. Among investors surveyed in 2024, 85% considered greenwashing to be a greater concern than five years earlier. Furthermore, 80% identified a need to improve the materiality and comparability of sustainability reporting, while 62% regarded the quality of the information provided as insufficient.1
Important financially relevant ESG topics
- Corporate governance, business ethics and the quality of strategic execution
- Climate-, nature- and transition-related risks and their impacts on business models and assets
- Energy supply, infrastructure and technological transformation
- Human rights, labour standards, and resilience and responsibility across the value chain
- The quality, comparability and reliability of sustainability reporting
- Long-term capital allocation and broader access to investment and retirement savings opportunities
Source: EY Institutional Investor Survey, December 2024 and Swiss Sustainable Finance (SSF), Swiss Sustainable Investment Market Study 2026.