Companies that have passed RLAM’s sustainable investment criteria returned 10.2% per annum over the past five years, a total of 62.1%, compared to a 9.5% annual return from the FTSE 100, according to analysis by Royal London Asset Management, which suggests that “investing sustainably can outperform the market”.

The firm also looked at the “average” performance of companies that meet their sustainable growth criteria, which showed an “even greater” difference. Royal London looked at the potential returns that could have been earned through investing £100 in each company that matched the criteria, with the average being 14.7% among the sustainable companies, compared to 10.3% in the FTSE 100 category.

Royal London Asset Management head of sustainable investments Mike Fox commented: “The sustainable investing team at RLAM has long believed that companies with products and services with a social benefit and companies which show leadership in the management of ESG issues, can deliver better financial returns.

“I hope that this analysis will reassure those who still wonder whether applying considerations that they make in other fields of their lives - e.g. by recycling goods and waste or giving time and money to charities - to savings and investments, does not have to mean they will sacrifice their returns and that in some cases, it can do quite the opposite.”

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