Tree huggers are coming up in the investment world, according to a study by Forest Trends’ Ecosystem Marketplace, an online source of analysis and data on environmental markets and investment.

The subsector of socially responsible investing known as conservation investing is growing and producing fairly solid returns, according to the study, State of Private Investment in Conservation 2016, released Wednesday.

The subsector, which seeks measurable environmental benefits along with financial returns, accounted for $8.2 billion of investments between 2004 and 2015, according to the report. That's up from $5.1 billion at the end of 2013. Investment returns for this category likely have been in the 5 percent to 10 percent range for for-profit companies and up to 5 percent for nonprofits, according to Forest Trends spokesman William Tucker.

Forest Trends describes conservation investments as capital that is invested to create sustainable food and fiber production, habitat protection or clean water.

Investments in sustainable food and fiber led the way, accounting for $6.5 billion in capital committed during the decade covered by the report. Another $1.3 billion went to habitat conservation, while investments in improving water quality or quantity totaled $400 million.

Investors have confidence in stable returns, the report says, with 31 percent of investors saying they anticipate rates of return between 5 percent and 9.9 percent. Half of investors in for-profit companies expect returns of 10 percent, “suggesting that conservation-oriented investments are performing well when compared with traditional strategies,” the report says. The study surveyed 128 banks, companies, fund managers, family offices, and non-governmental organizations

Survey respondents said they had another $3 billion in capital they were willing to invest in conservation investments but they could not find investments with the right mix of environmental and financial returns to meet their goals.

Conservation capital is beginning to reach emerging markets. While the vast majority of investments in habitat and water conservation remained concentrated in North America, finance for sustainable food and fiber production was split between North America (33 percent), Latin America (29 percent), Oceania (19 percent) and Africa and Asia (about 9 percent each).

“The findings of this report speak to the growing recognition of our forests, our wetlands, our reefs and other natural landscapes as smart investments – a notion that would have been unthinkable to most mainstream investors just five years ago,” Michael Jenkins, founding president and CEO of Forest Trends, said in a statement.

“The demand is growing across the globe and from across investment instruments. The only thing keeping these emerging asset classes from surging even higher is the scarcity of investable opportunities. As in any emerging market, transparent information is critical,” he added.

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