Those investors now have another investment choice. The Minneapolis-based institution’s global asset management group, Columbia Threadneedle Investments, launched the Columbia U.S. Social Bond Fund on March 26.

Ameriprise said the Columbia fund is a first-of-its-kind municipal product that uses a mix of environmental, social and governance (ESG) criteria as the basis for its investments.

James Dearborn, Thomas Murphy and Chad Farrington are portfolio managers for the fund.

Murphy, head of global investment grade credit, said companies that adhere to ESG principles are mindful of sustainability, environmental impact, social responsibilities to workers and consumers and adhere to best governance practices and will be good for shareholders and bondholders.

“Simple, simple concepts around ESG, where keeping yourself out of the news, keeping yourself out of trouble are going to lead you to better returns,” Murphy said. “Things like energy efficiency or recycling can lead to better margins.”

Dearborn, the head of municipal bonds at Columbia Threadneedle Investments, is confident that the fund will perform well.

“We have great confidence that, investing in sectors that benefit health care, education, the environment, housing, we are not giving up performance opportunities,” he said.

Earlier this year, Ameriprise rebranded its two asset management firms, Boston-based Columbia Management and London-based Threadneedle Investments, as Columbia Threadneedle Investments. While the Columbia and Threadneedle funds are marketed separately, the rebranding means investment teams from the two groups can more readily leverage their working relationships and investment information.

The Columbia U.S. Social Bond fund is the first U.S. municipal ESG fund for Columbia. However, Threadneedle has been running a similar social bond fund in the United Kingdom since December 2013. Dearborn says that fund has outperformed its benchmarks since inception.

Dearborn and Farrington, who heads municipal bond credit research, both are based in Boston. Murphy is based in Minneapolis.

ESG investments are an evolution in socially responsible investment. They seek competitive returns while incorporating ESG factors in the research process, where socially responsible investing has traditionally used negative screening like eliminating tobacco stocks from consideration.

The mutual fund research company Lipper says it does not have a specific category for ESG funds but did say there are a number of socially responsible and faith-based options available from the likes of Calvert Investments and GuideStone Funds.

The Columbia U.S. Social Bond Fund invests in municipal and corporate bonds that the managers believe are aimed toward positive environmental and social development. Because a majority of fund assets will be invested in municipal bonds, most of the income it distributes will be exempt from federal income taxes.

Some of the initial municipal investments include a low-income multifamily housing complex in Louisiana, a school district project in Philadelphia and a wind farm in Washington state.

“We are really looking for bonds that have identifiable benefits for underserved or low-income communities,” Dearborn said.

There has been a growing demand for this type of investment product. Murphy said Europe is further ahead of the U.S. in applying an ESG screen to investments. “Almost every request for proposal that we get for running a credit portfolio for someone outside of the United States, there is a section on ESG,” he said.

In order to research the ESG factors in companies, Columbia Threadneedle has partnered with Sustainalytics, a global firm that researches responsible investments. Sustainalytics, based in Amsterdam, the Netherlands, provides Dearborn and Murphy detailed reports on companies that score high on commitments to ESG principals.

“Partnering with them gives us the necessary credibility with investors who care about this to know that we are sincere and honest in our efforts to do this,” Dearborn said.

The U.S. Social Bond Fund is likely just the start, as Columbia may start applying myriad ESG factors on top of the traditional financial analysis to other funds.

“The fact that I’ve been involved in this is very exciting because we think we have the ability to leverage this into … non-muni products, taxable products on the institutional side both in Europe and Asia and hopefully here in the U.S.,” Murphy said.