As a result, the outlay by investors for research on the business impact of environmental, social and governance (ESG) issues is nearing the amount devoted to major industry sectors.

"We've built a dedicated team in this area and we have a client list of around 50 or 60 (investor) institutions," Anthony Ling, European Head of Research at Goldman Sachs, told the conference on investment and climate change late on Monday.

"In aggregate, across the UK fund management industry, the Netherlands, France and Germany, that probably amounts to about 5 percent going towards 10 percent of the entire amount that is paid for sell-side research," Ling said.

"If we went back a few years that would be zero."

Such spending was now rivalling the 10 percent of the total spent on sectors such as oil or pharmaceuticals, he said.

Climate change pressures, coupled with expected changes in the availability of oil and gas, are affecting corporate performance, especially in the energy sector, Ling said.

"If we continue with current trends, gas consumption will probably overtake oil in the next ten to 20 years or so. The gas industry in our opinion is the bridge to the low-carbon world."

Companies that did not understand such issues would lose out, he said. "The gap between winners and losers, between the likes of BG, BP and Shell and the rest, is widening out."

PIVOT POINT

Renewable energy is topping some investor menus as measures such as the Kyoto Protocol create incentives, through carbon markets, for energy-hungry businesses to cut emissions themselves or buy these reductions by financing low-carbon or renewable energy projects around the world.

"It's a source for frustration to us that the carbon market is not more developed because we just simply cannot get enough money into that market at the moment for our own needs," Ling said.

Uncertainty over future oil and gas supplies and the timing of replacement of major power assets has further increased opportunities for the renewable energy sector.

"In the UK we're at a pivotal moment in the investment cycle," Paul Golby, Chief Executive of German-owned utility E.ON UK, told the conference.

"We're now at the point of needing to invest a substantial amount of money, probably of the order of 50 billion pounds ($87.38 billion) over the next decade, to replace these overdue assets that are now retired. We're going to need nuclear, clean coal, gas, energy efficiency and renewables."

Goldman announced last autumn it wanted to invest US$1 billion in renewable energy over the next three years. Stock markets such as London's Alternative Investment Market (AIM) have seen a rash of listings by renewable energy companies in the past 12 months.

Specialist investors are enjoying explosive growth, said James Cameron, Vice-Chairman at Climate Change Capital, which invests directly in clean energy projects.