The company wrote a report titled ‘The Age of Grounded Sustainability: How sustainable investing is adapting to a more complex world – and what could come next’, which concluded that sustainable investing was evolving and not dissipating.

It predicted that, by 2030, governance is expected to become the dominant ESG differentiator and sustainability will be framed around competitiveness, security and resilience.

Aberdeen Group currently administers £580bn of client and customer assets across its three core businesses: adviser, investments and Interactive Investor. The report also found that artificial intelligence was bringing the trade-offs in sustainability into sharp focus.

The firm carried out a survey of 2,000 adults conducted by Opinium Research, which revealed 43% said AI would do more harm than good over the next decade with only 20% expecting a positive impact overall. While, 43% cited that the concerns justified the slowing in the expansion of AI compared with 22% who believed if it was managed responsibly the benefits would outweigh the risks.

The firm said: “Governance, transparency and business standards are now among the clearest drivers of investment preference. 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.

In 2025, the firm recorded £2.8bn of net inflows into sustainable investment strategies. The momentum continued in 2026, with several discretionary sustainable mandates announced.

The firm stated that more than a third of its fixed income mandates have a discretionary sustainable focus to reflect the demand in integrated approaches rather than standalone labelled products. 

It found that 76% of UK retail investors expect sustainability to feature in investment or business decisions. It also found that 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,” said Aberdeen. “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.

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.

Aberdeen said: “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.”

Peter Branner, chief investment officer at Aberdeen Investments, said: “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.”

Dan Grandage, chief sustainable investment officer, Aberdeen Investments, added: “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.”

Stuart Riddick, senior sustainable investment manager, Aberdeen Investments, 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.”