The Henry Jackson Society report claims the sanctioning of systemic sexual abuse served as a way of 'attracting, retaining, mobilising and rewarding fighters'.
It was also used as a means of delivering cruel punishment to 'kafir' - non-Muslims - and as a form of terrorism.
With slavery and rape given Islamic justification by the depraved group's theologians, sexual exploitation was also used as a way of raising cash for the caliphate.
The study shows many ISIS fighters from the US and Europe had a background of abusing women, which implies a relationship between 'committing terrorist attacks and having a history of physical and/or sexual violence'.
One infamous jihadist described as key in the savage persecution of non-Muslims in ISIS territory is the Briton Siddhartha Dhar.
The father-of-four, once a bouncy castle salesman in Walthamstow, is said to have even enslaved some Yazidi women and girls himself and regularly taken part in trafficking.
The Yazidis, deemed by ISIS to be 'pagans' that can be raped and enslaved without consequence, have provided much of the supply of women and girls for the group.
According to the report, the prospect of having unlimited access to women was intentionally advertised to attract men from conservative Islamic societies where casual sex is prohibited.
The group also sanctioned forced conversions and pregnancies after women were enslaved or abused as a means of adding to the ranks of the extremist cult.
Another Briton with a history of sexual violence - Ondogo Ahmed, from London, who was jailed for eight years after raping a 16-year-old girl - joined the group in 2013.
He fled to the caliphate in Syria when out of prison on licence.
Nikita Malik, the author of the report, was quoted in The Guardian as saying: 'These cases indicate an existence of a type of terrorism that is sexually motivated, in which individuals with prior records of sexual violence are attracted by the sexual brutality carried out by members of Islamic State.'
Other men with a past of domestic or sexual abuse include London Bridge murderer Rachid Redouane and Westminster terrorist Khalid Masood.
The Henry Jackson Society also looked at the link between human trafficking and funding.
It found that groups, including Isis and Boko Haram, are turning to hostage-taking and ransom efforts as historical revenue streams such as taxation and oil sales dry up.
The study suggests kidnapping brought in around £7.6 million to £22.8 million for Isis last year.
Victims cited in the study include a 10-year-old Libyan girl who was repeatedly raped by traffickers while she was being held in a camp.
Yvette Cooper, chairwoman of the influential Commons Home Affairs Select Committee, said: 'Isil, Boko Haram and other evil groups are increasingly seeing human trafficking as a possible revenue stream - and we know that terrorists use sexual violence as one of the weapons they use to divide and create fear within communities.
'It is important this is recognised in the interpretation of terror in our current laws.'
The report found terrorists are using organised crime tactics such as money laundering, migrant smuggling, human trafficking, drugs and firearm smuggling, with sexual slavery markets commonplace in Islamic State-controlled areas of Iraq and Syria.
It concluded that financial gain is a key driver behind sexual slavery, with ransom payments linked to sexual violence.
She said: 'The international community must recognise and address the nexus between this criminality and security.
'Historical revenue streams, including taxation and oil sales, to groups such as Islamic State and Boko Haram are decreasing.
'These are being replaced with hostage-taking and ransom efforts, meaning modern day slavery may increase as Daesh struggles to sustain its financial reserves.'
The report recommends British laws, including the Modern Slavery Act and Terrorism Act, should be interpreted more broadly to reflect sexual violence being used as a tactic of terrorism.
The findings were welcomed by the Government's former independent reviewer of terrorism legislation, Lord Carlile, who said: 'It highlights the imperative need for more international cooperation, to break up the trafficking gangs and routes, which are so essential for their wicked trade in human beings.'
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