Interest in sustainable investing remains strong among investors. According to Morgan Stanley's 2026 survey, 92% of global investors are interested in sustainable investing, while 64% plan to increase their allocations. The US SIF Foundation estimates that $6.6 trillion of U.S. professionally managed assets now use sustainable investing strategies, representing approximately 11% of total U.S. assets under management. As investor preferences continue to evolve, RIAs are expected to place greater emphasis on incorporating client values into portfolio construction.
How Should RIAs Discuss ESG with Clients?
ESG investing begins with understanding each client's priorities. RIAs should discuss whether clients want to focus on environmental issues, corporate governance or other sustainability themes before making investment recommendations.
Morgan Stanley found that 88% of investors believe they can achieve competitive financial returns while investing sustainably. As investor awareness continues to increase, values-based discovery is expected to become a more common part of the client onboarding process.
How Should RIAs Build ESG Portfolios?
RIAs can incorporate ESG factors by excluding certain industries, selecting companies with stronger sustainability characteristics, or integrating ESG analysis into traditional investment research.
According to the US SIF Trends Report, 77% of sustainable investment managers now use ESG integration rather than exclusion-only strategies. As ESG data becomes more standardized, integrated portfolio construction is expected to continue replacing simple screening approaches.
How Can RIAs Measure ESG Results?
Clients increasingly expect measurable outcomes rather than general sustainability claims. RIAs should review portfolio metrics, third-party ESG ratings, and other standardized measurements when discussing ESG investments.
Industry research shows that 64% of investors plan to increase their sustainable investments because they believe these strategies can deliver competitive returns alongside measurable impact.
How Can RIAs Avoid Greenwashing?
Regulators continue to increase their focus on ESG-related marketing claims. RIAs should ensure that fund descriptions and client communications accurately reflect how portfolios are managed.
The SEC has brought multiple enforcement actions involving misleading ESG disclosures, while regulatory scrutiny of sustainability claims continues to increase globally. As ESG investing expands, firms are expected to strengthen internal review procedures and documentation before making sustainability-related claims.
What Overlooked Areas Can Strengthen ESG Investing?
ESG investing extends beyond selecting sustainable investments to protecting shareholder rights throughout the investment lifecycle. One way RIAs can support the governance pillar of ESG is by helping clients recover proceeds from securities class actions.
Securities class action settlements reached approximately $8 billion in 2025, yet many eligible recoveries went unclaimed because filing claims required significant manual work. AI-powered platforms such as 11th.com automate recoveries across securities class actions, shareholder compensation, digital assets, and other recovery programs, making shareholder recovery a seamless part of responsible portfolio management.
What Should RIAs Prioritize in 2026?
Morgan Stanley expects investor demand for sustainable investing to remain strong, with most investors planning to increase ESG allocations over time. As reporting standards mature and regulatory expectations continue to evolve, RIAs that combine clear client discovery, measurable reporting, and disciplined portfolio construction are expected to be better positioned to meet growing demand for sustainable investing.
FAQ
Why is ESG investing becoming more important for RIAs?
According to Morgan Stanley, 92% of investors are interested in sustainable investing, while 64% plan to increase their ESG allocations.
How should RIAs build ESG portfolios?
RIAs should first understand each client's priorities, then incorporate ESG through integration, screening, or other strategies that align with the client's financial goals and values.
How can RIAs measure the success of ESG investing?
RIAs should use third-party ESG ratings, portfolio metrics, and standardized reporting to demonstrate both sustainability outcomes and long-term investment performance.
How can RIAs reduce greenwashing risk?
Firms should ensure that ESG-related marketing materials and client communications accurately reflect how portfolios are managed and are supported by appropriate documentation.
What overlooked practice can strengthen ESG portfolio management?
Protecting shareholder rights through securities class action recoveries supports the governance pillar of ESG while helping clients recover eligible assets that might otherwise remain unclaimed.
