Corporate commitment to sustainability is intensifying, with 88% of companies globally identifying it as either a primary (53%) or partial (35%) driver of long-term value creation—up three percentage points from 2024. The insight comes from Morgan Stanley’s Sustainable Signals: Corporates 2025, a survey of over 300 sustainability decision-makers at public and private firms with revenues exceeding $100 million. North American and European companies showed the largest increase in viewing sustainability as a value driver—up 9 and 10 points respectively. Meanwhile, APAC companies reported a shift toward risk management. Despite capital intensity, over 80% of companies can measure return on investment (ROI) for sustainability-related spending, such as capital expenditures, R&D, and operational costs. 83% say they measure ROI for sustainability as easily as for other investments, with just 2% reporting difficulty. Spending is relatively balanced across goals: 22% focus on capex and R&D for new projects, 30% on opex for risk reduction, and 31% pursue a blend of both. Utilities and tech sectors prioritize new investments, while communication services and real estate emphasize operational risk mitigation. Investment requirements remain the top hurdle, with 24% citing them among their top three barriers. Political and macroeconomic uncertainties (17%) and difficulty assessing current sustainability performance (16%) follow closely. Still, 65% of companies say they are meeting or exceeding expectations on their sustainability strategy—up from 59% in 2024. APAC reported the strongest progress gains, growing from 53% to 60% year-over-year. The physical impacts of climate change are already being felt: 57% of companies report business disruption from climate-related events in the past year, rising to 73% in APAC. The most cited impacts include extreme heat (55%), extreme weather (53%), and rising operational costs (54%). Over the next five years, three-quarters expect physical climate risks to affect demand, costs, and investor relationships. More than 80% feel “very” or “somewhat prepared” to enhance resilience across infrastructure, Climate transition risks are also looming large. Between two-thirds and three-quarters of companies see a likely business impact from policy changes, shifting markets, or rising stakeholder expectations. The most likely outcomes include higher operating costs (71%) and increased investment requirements (69%). supply chains, financial risk, and community engagement. The top opportunity cited for sustainability over the next five years is improved profitability, mentioned by 25% of respondents. Other priorities include revenue growth (19%) and lower cost of capital (13%). However, costs remain a top concern. Half of companies flagged cost-related challenges—including higher prices or reduced profitability from process changes—as their biggest threat. Key enablers for successful sustainability strategy include: Technological advancements (33%); A favorable economic and operating environment (32%); Growing client demand (28%).