KBCAM had some reason to crow. The firm was announcing its appointment as an alternative energy sub-adviser to Calvert, the largest provider of socially responsible investment funds in the US, with 14bn assets under management.

And in a sign that climate change is creating new opportunities for companies and investors, the asset managers were also celebrating strong numbers in their own ecofunds, with their alternative energy fund achieving an overall market-beating 24.1% growth for the 12 months to the end of May and their water fund attracting 600m in 38 working days.

According to Noel Collins, senior investment manager at Mercer Investment Consulting, more and more people are getting turned on to ethical investing, which for years has been only a niche in the equities ecosystem.

"There's a definite interest and desire for retail and high net worth investors to have that angle, " he said.

"There's a lot of growth in managed funds with some element of ethical criteria."

Dolmen's Green Effects fund, for example, has seen an 86% return over the past three years, with it and other 'green' funds pushed by pundits including Eddie Hobbs.

But others say that there are few funds and no real supervision of the companies the funds are exposed to.

"It's a sexy way to describe a fund; it attracts a certain type of investor and makes people feel good, " said Joe Byrne, managing director of Coyle Hamilton Willis, an employee benefits consultancy firm. "It's very tricky to monitor. The idea that you're getting a pure environmental play . . . you don't know what's really going on in these companies."

Byrne said exposure to ethical and environmental funds was still limited among Irish pension funds.

Collins agreed, saying Irish funds generally lacked mandates to pursue strategies outside achieving maximum (prudent) returns, but that ethical investments had "a little bit of a track record" now and matched the performance of other types of investments.

Large US funds such as the Californian public employees' pension fund, the Californian teachers' pension fund, actually discriminate in favour of 'greener' firms. The 18bn National Pension Reserve Fund is the only fund in Ireland to approach that level, but has no SRI investments, although it did adopt the UN responsible investing directive which incorporates environmental, social and governance concerns in investment analysis, according NPRF senior manager Adrian O'Donovan.