Many trustees still believe ethical funds will not perform as well as other funds, according to Sam Collin, charity adviser at the Eiris/UKSIF charities project, jointly run by the Eiris Foundation and the UK Social Investment Forum.
She was commenting on research published last week by Cooperative Insurance, which found that 85 per cent of people planning to put money into individual savings accounts this tax year were considering those focused on ethical investments. Last year the figure was 67 per cent.
Zack Hocking, head of investments at Cooperative Insurance, said: "Ethical investment still represents a small amount of the overall market, but evidence suggests growth will continue."
Collin said: "Trustees can be conservative and there is a perception among them that they will lose out financially by investing ethically. But ethical funds can out-perform non-ethical funds."
Despite the reluctance of some trustees, she added, more charities were investing ethically, often to protect their reputations.