The study also found that while ESG funds remain cheaper than non-ESG funds their price gap narrowed to 2bps over the last 12 months.

In its latest research, Fitz Partners analysed the management fees of Clean share classes in Europe of ESG labelled funds - funds referencing ESG-related portfolio construction practices within their names - and non-ESG funds.

The review is based on analysis of over 4,000 Clean share classes for equity and bond cross-border funds.

Fitz said that contrasting with the same study a year ago, the number of cross-border ESG-labelled equity and bond products has increased by 89%.

On average, ESG-labelled equity funds Clean management fees stand at 0.78% while the corresponding fees for non-ESG remain higher at 0.80%.

The gap between both ESG and non-ESG management fees averages has reduced to just 2bps in the last year. For ESG-labelled bond funds, clean management fees average 0.50%, while non-ESG fees remain higher at 0.53%.

In Fitz’s review 12 months ago, average fees for ESG-labelled equity and bond funds both showed lower averages at 0.76% and 0.46% respectively.

Fitz looked at clean classes which were in existence 12 months ago and were not labelled as ESG then but have since been "repositioned or labelled" as ESG in the last year. These newly-labelled share classes still show an average clean management fee in line with current non-ESG funds at 0.80% and 0.55% for equity and bond funds respectively.

Hugues Gillibert, Fitz Partners CEO, said: “For a few years now, new launches of ESG-labelled funds have weighted significantly in the universe of ESG funds and have kept management fees lower on average than non-ESG fund products in Europe.

“In the past year a fair share of the increase in ESG-labelled funds has come from the repositioning of existing funds as ESG products. Unlike new fund launches, these funds new to the ESG universe have not altered their pricing while transitioning to ESG and have inflated the overall ESG fund costs.”

The research mainly focused on Luxembourg and Ireland-domiciled funds, including many which can be sold in the UK.