Government regulation 'driving environmental investment'

Government regulation and targets are helping to increase investment in companies operating within areas such as renewable energy and low-carbon transport.

That's the message from Jason Hollands, head of group communications for investment firm F&C, who claimed that consumer concern over environmental issues is also helping to make the sector more attractive to investors.

He highlighted the potential for private equity investment in many smaller-scale enterprises, with much of the renewable energy market currently steering clear of stock market flotation.

"The European Union sign up for targets, the UK government sign up for targets, and that will drive support for, not only renewable energy firms, but also firms involved in areas like efficient energy and waste management," Mr Hollands said.

"The pure alternative energy suppliers tend to be quite small companies, many of which are private equity type opportunities and not so much stock exchange business," he added.

Figures published at the start of this year by New Energy Finance revealed that worldwide investment in the renewable energy sector increased by 35 per cent last year to more than £50 billion.