The study found that 89 per cent of investment consultants were anticipating a surge in demand for ESG issues to be taken into account when making investment decisions, driven by fiduciary duty and reputational factors.

Ulrika Hasselgren, CEO of Ethix SRI Advisors, said while awareness was already high in the Nordics, it was encouraging that interest was growing across Europe.

“It is very encouraging that investors are seeing this as adding value to their investment, not only from a risk perspective but also from an opportunities perspective,” she said. “We see large investors like ATP and some of the large pension funds allocating quite large parts to sustainable forestry, for example. This is a very interesting move and shows closer integration from investors in ESG issues.”

Julian Lyne, head of global consulting at F&C Investment, agreed with the positive outlook for the ESG sector. “In the first half of this year the market did have a negative impact on demand,” he said. “In the second half we have certainly seen an increase in demand across a range of our socially responsible investment products. All the signs are that this will continue into next year.”

However, the research also found several barriers to the take-up of socially responsible investments. More than 70 per cent of respondents said the biggest hurdle was a lack of specification from clients when including ESG issues in investment strategies. Many also expressed concern over legal difficulties and remuneration.

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