Climate change will create investment opportunities for institutional investors such as charities within the next five years, according to investment managing company Sarasin Chiswell.
The firm said last week that "sustainable" investment - whereby companies are selected according to their environmental records - could offer improved returns in future.
Andreas Knoerzer, head of sustainable investment at Sarasin, said both the cost savings from avoidance of environmental damage and new markets in ecologically sound technologies would benefit investors.
He said: "There is a growing acknowledgement that climate change is a world issue and that the supply-demand status quo of carbon-related resources is untenable, so alternatives will have to be developed. We foresee clear investment opportunities coming from this new paradigm."
Sarasin Chiswell's sustainable investment philosophy combines negative screening with a 'best-in-class' approach that restricts investment to 'sustainability leaders' in their sector.
The firm describes sustainable management as "the production of goods and services with broad social acceptance by using production methods with a low potential for conflicts".
Simon Hill, head of institutional business at the firm, said the "time has come" for sustainable investing.
"The key issue is whether doing good has a cost in terms of investment performance. The evidence shows that there is no sacrifice."