Investors favoring companies that release fewer greenhouse gases relative to their peers don't have to worry about sacrificing returns, according to a new report from UBS.

"Interest in carbon in a finance context is at an all-time high," the firm wrote in a note to clients, adding that mentions of "carbon" on earnings calls have tripled over the last three years.

Amid growing interest in sustainable investing, the firm assembled a basket of companies that have low carbon intensities compared to other names within each sector and region.

Carbon intensity measures greenhouse gas emissions per unit of economic output. Ultimately, UBS found that this basket has outperformed the broader market since at least 2010.

UBS' low-carbon intensity strategy invests in the 50% of stocks with the lowest carbon intensity in each sector and region. Since 2010, the strategy would have outperformed the MSCI World Index by an average of 0.9% per year, while cutting carbon intensity by 62% compared to the benchmark.