Advisers should screen out companies which are not taking the threat of climate change seriously as a matter of course, Lord Deben has said.
John Gummer, chairman of the Personal Investment Management & Financial Advice Association made the comments at the trade body's annual summit, held in London yesterday (October 31).
Lord Deben, who is also chairman of the government's independent committee on climate change and a former secretary of state for the environment, said companies which were not environmentally sustainable were not good investments.
The former MP for Suffolk Coastal and now a member of the House of Lords said: "Are the businesses in which you are invested aware of what the problems are going to be and are they aware of the opportunities? That is the real question.
"It is a question not just about climate change but in my view it is a very important question about the quality of management.
"Sustainable investment is an extremely good mechanism for measuring the quality of management."
Lord Deben, who also runs an international sustainability consultancy firm, said many people underestimated the speed at which climate change would play out and the pace at which measures would be introduced to address it.
He said: "If you are thinking of investing in a fossil fuel company, I think you would have to ask what plans they have got to exist in 20 years' time.
"If you are in the business of providing fossil fuels in a world which is going to move away from fossil fuels faster than most people are prepared to accept, then you had better ask whether that company is going to invest in carbon capture and storage."