AI, governance and transparency reshape sustainability as new Aberdeen Investments research points to an era of ‘Grounded Sustainability’

• By 2030, governance is set to become the leading ESG differentiator, while governments favour targeted rather than universal policy support

   

• 76% of UK retail investors expect sustainability to inform business and investment decisions

   

• AI exposes the trade-offs: 43% say its environmental and social impacts justify slower expansion, while 22% believe the benefits outweigh the risks
   

A new paper from Aberdeen Investments finds that investor interest in sustainability is stronger than headline industry data suggests*. Governance, transparency and business standards are now among the clearest drivers of investment preference.

The findings appear in the firm’s new report, ‘The Age of Grounded Sustainability: How sustainable investing is adapting to a more complex world – and what could come next’. Its central conclusion is that sustainable investing is evolving, not retreating.

What will 2030 look like?

The report predicts that, by 2030, sustainability will be framed increasingly around resilience, security and competitiveness. Governance is expected to become the dominant ESG differentiator.

This next phase will be shaped by targeted rather than universal policy support, as governments link sustainability goals more closely to industrial competitiveness, energy security and economic resilience.

For investors, this suggests stronger policy backing for electricity networks, electrification, critical minerals and defence-related technology. It also demands realistic expectations of what markets and governments can deliver. The focus is shifting from ESG labels to governance, resilience, climate transition and value creation.

AI: the trade-offs in sharp focus

Artificial intelligence brings the sustainability trade-offs into sharp focus. In a survey** of 2,000 UK adults conducted by Opinium Research for the firm, 46% said AI would do more harm than good over the next decade; only 20% expected a positive overall impact. Some 43% said the concerns justify slowing AI’s expansion, compared with 22% who believe responsible management would allow the benefits to outweigh the risks.

Peter Branner, CIO, Aberdeen Investments, says: “The rapid adoption of artificial intelligence is perhaps the clearest illustration of the wider recalibration underway. It is a subject that inspires both extraordinary optimism and profound unease: promises of scientific breakthroughs and productivity gains sit alongside concerns about energy demand, social disruption, resilience and even humanity's relationship with increasingly powerful machines.

“These questions affect us all. They also reinforce a central lesson for sustainable investing: progress is rarely linear, and trade-offs must be understood. We must remain alert to how AI develops and avoid locking capital into assets that could be stranded by technological change or the energy transition.”

Beyond labels: investors still value sustainability, but judge it more carefully

Fund flows alone no longer capture the full picture of investor demand. Sustainability considerations are increasingly embedded in mainstream investment processes and discretionary mandates.

Aberdeen Investments recorded £2.8 billion of net inflows into sustainable investment strategies in 2025. Momentum continued in 2026, with several significant discretionary sustainable mandates announced. More than a third of its fixed income mandates now have a discretionary sustainability focus, reflecting growing demand for integrated approaches rather than standalone labelled products.

View from the ground – what UK retail investors think

Aberdeen’s research found that 76% of UK retail investors*** expect sustainability to feature in business or investment decisions. In addition, 57% are interested in sustainable investment credentials and 55% think about sustainability when investing.

Among practices investors would avoid, predatory lending ranked highest: 65% said they would avoid companies involved in it. This was followed by intensive farming (64%), tax avoidance (62%), poor business practices (61%) and animal testing (61%).

The results point to a broader view of sustainability than fund-flow data alone suggests, mirroring conversations with clients. Investors are not abandoning sustainability; they are looking beyond labels and testing how environmental, social and governance factors shape investment decisions.

Governance stood out. Nearly three-quarters (74%) of investors said high standards of business practice, including anti-corruption measures, matter when assessing companies. Tax transparency followed at 73%, strong corporate governance at 71%, and supply-chain standards and independent auditing at 67%.

Environmental issues also remain important, with 66% citing environmental protection and 64% renewable energy as important considerations when assessing investments.

Dan Grandage, Chief Sustainable Investment Officer, Aberdeen Investments, said: “The sustainability debate has evolved into what we call ‘grounded sustainability’. Investors increasingly see sustainability not as a separate theme, but as a lens for assessing risk, resilience and long-term value creation.

“Governance, energy security and technological change are becoming more financially material across asset classes. Retail and institutional investors alike are looking beyond labels to how these factors affect long-term outcomes and returns.

“Clients are focusing on specific themes such as climate transition, energy resilience and measurable outcomes. Demand for sustainable investing has not collapsed; it has become more selective and evidence-based.”

Stewardship is evolving — and active ownership remains essential

The report also highlights the importance of stewardship and active ownership.

Stuart Riddick, Senior Sustainable Investment Manager, said: “In the recent proxy season, fewer environmental, social and governance proposals reached company ballots, and those that did generally attracted less support. But that should not be mistaken for retreat: the stewardship system is evolving in important ways.

“The growth of pass-through voting is giving asset owners greater control over how shares are voted, moving decision-making closer to end investors. We are also seeing a broader shift away from standardised voting approaches, with investors increasingly expected to take ownership of their stewardship policies and decisions.

“These developments may sound technical, but they have major implications for corporate accountability. Active ownership remains vital. Voting is only one part of effective stewardship, which also depends on sustained company engagement, research, challenge and oversight. As influence spreads across asset owners, asset managers and retail investors, preserving that culture of engagement will be essential to strong governance, long-term accountability and sustainable value creation.”

Towards a more grounded approach

Bringing together public attitudes, institutional market trends and wider industry developments, the paper concludes that sustainable investing is entering a more mature phase: “Grounded Sustainability”.

To navigate this transition, the industry should:

•    Keep sustainability grounded in financial materiality, focusing on the factors that have the greatest potential to affect long-term investment outcomes.

•    Be transparent about trade-offs, recognising that issues such as energy security, technological innovation and decarbonisation can sometimes create competing priorities.

•    Focus on real-world outcomes rather than labels, ensuring sustainable investing is judged by its impact and effectiveness rather than product classifications alone.

•    Improve the quality of sustainability data and stewardship, helping investors make better-informed decisions and engage more effectively with companies over long-term risks and opportunities.

Ends

*Source: Morningstar Sustainalytics' Global Sustainable Fund Flows 2025, February 2026.
** The research was conducted for Aberdeen Investments by Opinium Research between 4-8 September 2026. Sample size was 2000 adults, weighted to be nationally representative.
***Responses from 630 out of the 2,000 respondents polled by Opinium, who reported holding investments in an ISA, SIPP or general investment account.

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Notes to editors

About Aberdeen Investments:
 

Aberdeen Investments is a specialist asset manager that focuses on areas where we have both strength and scale across public and private markets, including credit, specialist equities and real assets. 
 

Our teams collaborate across regions, asset classes and specialisms, connecting diverse perspectives and working with clients to identify investment opportunities that suit their needs.
 

As at 30 June 2026, Aberdeen Investments managed c.£397.5bn on behalf of clients, including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.
 

www.aberdeeninvestments.com
 

About Aberdeen Group
 

Aberdeen is a leading Wealth & Investments group, working to help millions of customers and clients turn their financial goals into reality. As at 30 June 2026, Aberdeen managed and administered c.£579.4bn of client and customer assets across its three core business, interactive investor, Adviser and Investments. 
 

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