The French banking group issued a survey examing what institutional investors think about the "sustainability" trend.

Despite mounting economic and political challenges, institutional investors remain firmly committed to sustainable investing, with a growing focus on targeted ESG themes that aim to balance return with impact, according to the BNP Paribas ESG Global Survey 2025.

The fifth edition of the bank’s biennial study captures the views of 420 asset owners, asset managers, and private capital firms across 29 countries, collectively representing approximately $33.8 trillion in assets under management.

Findings show that 87 per cent of respondents have maintained their ESG and sustainability objectives, with 84 per cent believing that the pace of progress on sustainability will either continue or accelerate through to 2030. While levels of vocal advocacy have declined, long-term institutional commitment to ESG integration remains intact, the BNP Paribas report said.

Eighty-five per cent of participants said they integrate sustainability-related criteria directly into their investment decisions – an indication that ESG considerations are now a foundational component of investment processes, even as the sector moves away from more generalist ESG approaches.

Sharper investment focus
Over the next two years, investors are prioritising targeted ESG themes, particularly those aligned with global energy and climate agendas. The three most cited strategic objectives are:

-- Increasing allocations to energy transition assets (49 per cent);

-- Using active ownership to advance organisational ESG goals (47 per cent);

-- Investing in low-carbon assets while reducing exposure to carbon-intensive holdings (46 per cent).

The shift towards impact-focused ESG themes is also being mirrored in the private capital space. Among private capital managers surveyed, more than half (51 per cent) report an increased emphasis on social issues (76 per cent) and the concept of a "just transition" (63 per cent) –  ensuring that the shift to a low-carbon economy does not come at the expense of social equity.

Private capital firms see ESG strategies as a means of enhancing value, improving alignment with asset owners, and differentiating themselves in competitive fundraising environments. Many also regard sustainability themes such as decarbonisation as central to future opportunity sets.

ESG in partner selection, data strategy
Beyond investment policy, ESG factors are also playing a critical role in the way institutional investors select external banking and financial services partners. The top four criteria identified were:

-- Brand reputation on ESG/sustainability (51 per cent);

-- Availability of products and expertise (40 per cent);

-- Commitment to long-term client relationships (33 per cent); and 

-- Shared sustainability values (33 per cent).

As ESG data continues to evolve and standardise, access to robust and comparable information remains a challenge. To address this, 48 per cent of investors said they plan to allocate more budget to acquiring and analysing ESG data as part of their sustainable investment strategy.

The â€śIndustry Survey: Institutional Investors Leading the Way” report is based on quantitative responses gathered between November 2024 and January 2025 from 140 asset owners, 140 asset managers, and 140 private capital managers. Respondents were based across EMEA (50 per cent), APAC (26 per cent), and the Americas (24 per cent). Qualitative interviews with select clients were conducted from January through April 2025.

“The findings show that ESG is not simply a trend, but a strategic evolution in investment thinking,” the bank said. “Even in a more complex environment, institutional investors are embedding sustainability into how they allocate, evaluate, and engage."