The UK makes up nearly three-quarters of Europe`s multi-billion pound market in ethical investment and the sector`s popularity is set to grow, according to a report on Wednesday. The European ethical wealth management market is worth 1.138 trillion euros (762.4 billion pounds), according to a Eurosif estimate.

The UK contributes the most to total socially responsible investment (SRI), accounting for 71.3 percent of the market at the end of 2005. The market is growing at above the rate of European equity markets overall, and independent market analyst Datamonitor said "green" or ethical financial services would become more mainstream.

Katie Langridge, financial service analyst and author of the report, said: "Managing wealth in an ethical way has always been popular with certain niche client groups, but general public awareness of global environmental and social problems has increased, thanks to high profile charity campaigns and increasing activism.

"Ethical wealth management is not just a fashionable fad, and impressive returns suggest it will become a significant feature of the wealth management landscape in Europe." The vast majority of the total value of the European ethical wealth management market is being generated by so-called "broad" SRI.

This screens out companies based on non-compliance with certain international standards or excludes particular sectors, such as armaments, tobacco and pornography. The more specific "core" SRI includes positive screening, whereby investment managers seek out companies that are in line with their specific environmental and social principles.

For example, businesses can be positively screened for climate change, energy use, recycling or hazardous waste disposal. In the UK, the broad SRI market is worth 781 billion euros (523.3 billion pounds), while the core market is worth 30.5 billion euros (20.4 billion pounds).
(By Jennifer Hill, Planet Ark, 26/10/2006)
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