Chancellor Gordon Brown's move to establish his green credentials in today's pre-Budget announcement provides a clearer signal that green issues are becoming one of the most important global themes for investors today, according to Emma Howard Boyd, head of the Jupiter Socially Responsible Investment and Governance at Jupiter.

In today's pre-Budget report, the Chancellor announced a raft of measures to promote greater environmental awareness, including scrapping stamp duty on low carbon housing, an increase in air passenger duty from £5 to £10, an increase in fuel duty by 1.25p per litre and, the extension of tax discounts for biofuels.

Howard Boyd said: "We have been saying for some time that green investing is no longer simply about principle but profit. The Stern Review and the Eddington Transport Study have also highlighted that acting now and acting intelligently is about economic self-interest. The Chancellor's announcements today make it even clearer that carrying on 'business as usual' is no longer an option.

"I believe that today's announcements represent a strong combination of measures to price environmental costs, promote low carbon technologies and encourage behavioural change. This is not only good news for the environment but also increases the opportunities for companies in the field of environmental goods and services."

Jupiter, which has more than 18 years experience of green investing, has identified six areas it believes will benefit most from the trend for individuals, companies and governments to adjust their behaviour to take account of environmental issues - water management, clean energy, green transport, waste management, sustainable living and environmental services.

Among the stocks it holds in the green transport theme, for example, are FirstGroup, Go Ahead, Japan Railway East, Verbio and Clean Air Power.

First Group, which operates public transport services, including buses and trains throughout the UK, and school buses and municipal transit services in the USA, stands to benefit from government moves to encourage people away from cars and on to the public transport network.

Railway operators are also key beneficiaries. In the UK, Jupiter holds a stake in Go Ahead, which has focused on increasing the number of passengers it can attract to use its services, particularly during off-peak periods.  The company is also aware of the need to reduce emissions from its locomotives and over the last few years, has invested in more energy efficient trains and upgrading existing vehicles as part of a £1billion investment programme. In partnership with Transport for London, the company has introduced six new single-decker, diesel-electric hybrid buses to a London route.

In Japan, it holds Japan Railway East, which serves approximately 10% of total railway passengers. It is, therefore, one of the largest private railroad companies operating in the world. JR East is focussed on improving the efficiency of its trains and through its Environmental Technology Group, has made significant improvements to railcars. The company is also trying to develop the world's most environmentally friendly high speed train.

The use of alternative fuels, such as biofuels, is as important for cutting emissions as engine innovations or exhaust gas treatment systems. Under the Renewable Transport Fuels Obligation, 5% of transport fuel sold in the UK will have to come from renewable sources by 2010. This is expected to cut carbon emissions by around 1 million tonnes, equivalent to taking 1 million cars off the road.

Verbio is well positioned to take advantage of the increased demand that the EU's Biofuels Directive should create.  Legislation, which mandates a biofuels 'blend target' has already been passed in some member states, including Germany, Austria and France and is currently being discussed in the UK. As the largest biofuel producer in Europe and the only one of scale to produce both biodiesel and ethanol, Verbio has the capacity to produce 700,000 tonnes of biofuel per annum and the intention to double capacity to 1.4million tonnes over the next few years. 

Jupiter also holds a position in Clean Air Power, which makes equipment that enables lorries to run on a mixture of natural gas and diesel.  This allows diesel trucks to meet stringent local emissions regulations by on natural gas, allowing customers to benefit from a combination of low emissions and significant fuel saving.