This is a key conclusion in the report The Future of Investment: Sustainable Index Investing, released by UKSIF.
The report finds that institutional and high net worth investors are "increasingly looking at sustainable indexes for both products and performance measurement."
There are a number of ethical ETFs based on sustainability indices, such as the FTSE4Good and the Dow Jones Sustainability indices, as well as funds offering access to environmentally-themed sectors such as clean energy.
The report says that such ETFs "can offer affordable exposure to an index in a way that can be easily accessed by (primarily) retail investors".
It says that the rising level of demand reflects the wider market interest in sustainable investments.
Osmosis Investment Management offers a climate solutions ETF, providing exposure to 100 global companies that derive over half their revenues from activities concentrating on the efficient use of natural resources and mitigation of climate change.
The firm's head of responsible investment Rory Sullivan says: "These investors are interested in how they can manage and mitigate the operational and other risks associated with these stocks, and how they can work with us to promote responsible investment more generally."
The report is the second in UKSIF's Future of Investment series. It brings together specialists from index and ETF providers, investment consultants and research firms.
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