The tide of public opinion seems to be turning: Former US vice President Al Gore's narration of a film on global warming, An Inconvenient Truth, alongside the actions of entrepreneur Sir Richard Branson (who has sponsored a multi-million pound environmental enterprise), coupled with seemingly ever rising oil prices have certainly helped ratchet environmental concerns to the top of the news agenda, and it appears to have begun impacting on investment decisions.

According to a report by the United Nations Environmental Programme, investing in renewable and low-carbon energy had bucked the current economic down turn, topping £75 billion last year, up 60% on 2006.

The growing appetite for investing in clean and green technologies is confirmed in the 2008 edition of consulting group Cap Gemini's World Wealth Report. The report tracks the spending patterns of the World's wealthy elite. It recorded a 35% increase in the amount of cash ploughed into venture capital fund which backed clean technologies.

The report said: "In much greater size and proportion than in recent years, investors have been supporting innovative research and development initiatives in search of alternative fuels, renewable energy and other advanced technologies. Today investors are presented with many vehicles through which to back green initiatives, such as mutual funds, ETFs [exchange traded funds] and other pooled products or alterative investment. In 2007 these investments drove robust growth in green sectors."

Investors it seems are waking up to the potential returns to be made from the scramble to reverse man's negative impact on the planet, and not simply investing for altruistic reasons.

Sally Wright an Investment Director at Coutts said: "We have seen more clients asking us to manage portfolios which have sustainability and environmental screens to select stocks that do not offend their personal values, but we are also receiving requests for more focused mandates – we recently were asked to construct a portfolio of stocks in the solar energy and water management – so we are definitely starting to see more demand from clients.

"In much greater size and proportion than in recent years, investors have been supporting innovative research and development initiatives in search of alternative fuels, renewable energy and other advanced technologies."World Wealth Report 2008

"Traditionally, clients with 'green portfolios' have been focused on the altruistic aspects [of green investing]. It was important for them to receive a social and environmental return from their investments. Increasingly, I think it is viewed by the wider community of investors as an investment opportunity."

According to Cap Gemini, wind and solar got the bulk of the money last year, but carbon capture technologies for coal and geothermal energy plants as well as areas such as carbon credits are also receiving investor attention.

Wright continued: "Carbon credits are something we are looking at because they have the potential to become a mainstream commodity depending on the outcome of the the UN Climate Summit, Copenhagen 2009 - which is the next step beyond Kyoto. Carbon credits are well established in Europe but the US, China and India are probably the key countries that need to sign up to take it mainstream.

It is important to match up an individual's concept of "green" with that of their investment. Some clean tech funds and indices include nuclear investments, which might not match up with everyone's idea of clean energy.

"We have historically managed portfolios for clients using a screening process when the client has restricted investment in certain sectors because these conflict with their personal values. However, we have recently received requests to manage more focused mandates and the use of environmental and sustainability screening for best in class companies, with respect to issues such as human rights. " Sally Wright, investment director, Coutts

The need to build a whole new generation of nuclear power stations, not just in the UK, but around the world means that there will be opportunities for investors who are comfortable investing in such technology.

Wright acknowledges: "We have been looking at the renaissance of nuclear energy because the fact is that in developed nations there has been significant under-investment in nuclear generating assets, with the exception of France, because of sensitivity to public opinion. We are now seeing in the UK that as they [power stations] come to the end of their life cycle they need to be replaced because they can't be upgraded and specialist construction in this sector is a theme that we have incorporated in client portfolios."

Two final points that investors considering going green need to take into account are firstly the increasing positive correlation between the fortunes of the oil price and those of companies involved in clean tech. The ups and downs of the oil price have been closely mirrored by those of clean tech indices in the last 12 months. And secondly experts believe the solution to replacing the world's reliance on oil and gas will be piecemeal.

Wright concludes: "Having a diversified fund which gives you access to a range of different technologies is important because there isn't a clear winning technology at present."

By Lindsey Rogerson