APAC sustainability adoption reaches 84% as focus shifts to governance

The region followed North America (85%) closely.

Asia-Pacific asset owners are incorporating sustainability considerations into their investment strategies at a rate of 84%, as investors shift their focus towards governance and climate-related risks, according to FTSE Russell.

Its ninth annual sustainable investment asset owner survey said the region’s adoption rate is close to North America's 85% and EMEA's 83%, with sustainable investment adoption across regions returning to levels last seen in 2022.

Governance, tax, and shareholder rights emerged as the most cited sustainability priority globally, selected by 32% of respondents, up from 18% in 2025.

Climate physical risk was cited by 26%, compared with 19% last year, as investors responded to the material impacts of climate change.

“Asset owners continue to embed sustainability factors more deeply into investment decisions, despite market volatility and policy uncertainty,” said Stephanie Maier, Global Head of Sustainable at FTSE Russell.

Maier added that this reflects growing recognition that these factors can materially affect risk and returns, and warrant the same scrutiny as other investment considerations.

Sustainability considerations now cover more than half of the assets of 51% of asset owners surveyed.

The use of custom sustainable investment indices in passive allocations also rose to 35% in 2026 from 21% in 2025.

Corporate reporting quality was the top barrier to greater sustainable investment adoption, cited by 33% of respondents, as sustainability-related corporate reporting rates level off and regulatory requirements change in Europe and North America.

Concerns over greenwashing and ESG data availability fell to 22% and 25%, respectively, from 37% and 36% in 2025.

Asset owners are also tracking risks beyond traditional sustainability themes, FTSE Russell said.

Health and healthcare-related risks were cited by 25% of respondents, followed by technology and artificial intelligence-related risks at 24% and food security at 19%.