Those looking for a greener Christmas this year, can now give an investment in a wind-turbine, alongside the more established Oxfam goat or charity Christmas cards. This latest savings plan, offered by Abundance Generation, a renewable energy crowdfunding platform, taps into a growing market which has seen parents, grandparents and godparents making investments on behalf of the younger generation.

It could certainly be argued that any long-term investment that could help fund future education costs, is more sustainable than a Furby Boom, or plastic Nerf gun - likely to be broken, or discarded by the New Year. But are those investing on behalf of children more likely to consider sustainability not just profit when choosing investments?

Moral certainty

Some financial advisers say that parents and grandparents take a different approach when investing for children, and are more focused on environmental and ethical issues, than they are with their own pensions and Isas. Sarah Bowles, a financial planner with Burlington Associates, says: "People are more discerning when it comes to their children's investments. I think there is more moral certainty."

As a result investors are more likely to specifically exclude investments in tobacco, arms, or pornography, which are often included by default in their own funds. But she added: "People are also far more hopeful when it comes to thinking about their children and the future. They want the investments they make to have a positive impact."

This is a view shared by Bruce Davis, joint managing director at Abundance Generation. "Investing for the future is now less about putting money away and forgetting about it, and more about choosing the future you want to create," he says. "When we invest for our kids, we are doing more than providing for their financial security, we are also looking at our own social responsibility to ensure that this generation doesn't literally spend the kids' inheritance, and ski off with the ecological and financial capital of future generations."

Behavioural economics

However, to date, much of this evidence is anecdotal, and largely provided by those who already have a bias towards sustainable, and SRI-mandated investments.

Despite the boom in the study of behavioural economics – which seeks to understand why investors make certain decisions – there is almost no academic research investigating how this decision-making process changes, when investing on behalf of others.

The little data there is doesn't always back up the more optimistic outlook of some advisers working in this field. According to the Investment Management Association only 0.03% of the money in junior Isas is in ethically mandated funds, a slightly smaller percentage than the ethically invested funds within regular Isas.

But when it comes to the issue of climate change, pollution and resource scarcity, there is likely to be a shift in behaviour patterns, as these issues will have far greater impact on future generations. A recent smaller-scale survey seems to back this theory. Robin Wood, an adviser with Park House Financial Services asked potential investors about their priorities. Maximising growth remained the most popular answer, but those with children were far more likely to rank environmental and SRI-factors as important – in many cases equally as important – whether or not they were specifically investing for their kids.

Not one parent who responded to the survey said such factors were of "no importance". Just having children seems to alter parents' perspective on such matters. As one respondent commented: "I want to provide a legacy for my children. I want them to have enough money to be comfortable and a world which is fairer."

Other factors influence parents' decision-making processes, too. John Ditchfield, a director of the advisory firm Barchester Green, points out that by their very nature, those savings for children are focused on far longer investment horizons.

Ditchfield says: "Environmental investment funds often focus on areas which are very likely to grow over the next 10 to 15 years – for example, the Asian market for waste management and pollution control is likely to expand massively in the medium and long term; so this is the sort of area which makes sense for children's savings."

Those who have their own money invested over a five to 10-year horizon, may be less willing to divest from fossil fuels, for example, as these companies continue to deliver good profits and paying good dividends. In balancing the moral and financial dimensions the former may win out, particularly if your pension is not as well funded as you'd like.

But as Ominder Dhillon, the head of distribution at Impax Asset Management says, it's different for those looking at longer-term timeframes. A coal-fired power station appears a less sustainable business model over a 30- to 40-year timeframe, with policy increasingly focused on carbon reduction and forcing companies to pay for the cost of their own pollution.

There's another factor in play. Few relish the prospect of sorting out their pension. Many simply tick a box on their employer's "pension options", or, put aside what they can, because they feel they ought to do so. In contrast, investing for children is a very deliberate and far more positive decision, which means parents are far more engaged in where this money is invested.

Peter Michaelis, head of the SRI team at Alliance Trust Investment, says: "I can seen that sustainable investing would be attractive to those investing on behalf of their grandchildren and children, as they will be thinking about how they can provide the greatest prosperity for future generations.

He adds: "Prosperity is of course related to how much money you have; but also to the type of society and economy in which to spend that money. It makes sense then, to invest in those companies helping to reduce pollution, reduce energy consumption or developing cures for cancer.

"These can provide both elements: strong investment returns and a healthier, cleaner future."

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