This demand from APAC investors comes even as they navigate geopolitical tensions, economic uncertainty and the rise of AI as both a risk and an opportunity for sustainability.
ESG investing has proven its staying power amid global unpredictability, with Capital Group’s 2025 ESG Global Study revealing that sustainable investment adoption remains strong at 87 per cent worldwide, just shy of last year’s record high.
The study highlights growing investor focus in Asia-Pacific as well as in EMEA, where most plan to maintain or increase ESG allocations despite geopolitical and economic headwinds.
While fixed income and private markets continue to gain traction, the report also underscores a new frontier for sustainability – the environmental footprint of artificial intelligence – as investors weigh its high energy and water demands against its potential to accelerate the energy transition.
The study revealed that investors are refining their approach to asset classes and strategies, with 48 per cent of respondents globally now applying ESG approaches in private markets – the highest level since the study began in 2021.
Some 58 per cent of investors believe companies with credible transition plans can outperform over the long term, while 74 per cent say fundamental research is key to identifying those companies.
Six in 10 investors have a strong conviction in investment opportunities tied to energy transition, followed by clean water and health.
APAC has the highest share of respondents (71 per cent) engaging with asset managers on how they address nature – and more than two-thirds have either invested or are planning to invest in thematic funds that address nature-related issues.
“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.
The environmental impact of artificial intelligence is now in sharper focus, with 73 per cent of global investors identifying AI’s energy consumption and greenhouse gas emissions as top ESG risks for the next two to three years – up sharply from 54 per cent last year.
Water consumption is also in the spotlight, with 43 per cent of respondents flagging it as a material AI-related ESG risk — more than double the percentage in 2024. More than half of respondents see AI’s energy-intensive nature as a significant challenge to the energy transition, yet 56 per cent believe AI could fuel innovation to accelerate it.
“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.”
