classified under EU SFDR
Our approach
Environmental, Social and Governance
Key highlights
Article 9 fund
£102.9m
deployed in low-carbon growth
+42,716 tCO2e
emissions avoided in FY2022(1)
201,000 MWh
Potential MWh lifetime clean energy capacity in FY2022 and 226,000 MWh since IPO
3.4 MW
of units sold (fuel cells and electrolysers) in FY2022 and 3.8 MW since IPO(2)
1,135
jobs supported
Displacement
of fossil fuels(3)
89%
EU taxonomy alignment
Diverse Board
the Company’s Board is 50% female
Carbon Neutral
The Fund was Carbon Neutral in 2022
(1) (73% by Sunfire, 24.3% by NanoSun, 2.5% by Elcogen and 0.2% by Strohm) and 50,579 tCO2e since IPO (77% by Sunfire, 21% by NanoSun and 2% by Elcogen)
(2) all adjusted for the Company’s shareholding
(3) most of the Company’s investments either directly or indirectly displace fossil fuels, making a clear contribution to achieving the Paris Accord’s target of limiting global temperature rises to below 2 degrees and ideally limit them to 1.5 degrees
Our approach
At the 2015 United Nations Climate Change Conference 196 countries agreed to reduce their carbon output as soon as possible and to do their best to keep global warming to well below 2 degrees C, and pursue efforts to limit the increase to 1.5 degrees C. There is broad consensus that this will require emissions to be net zero by latest 2050.
Clean hydrogen has a vital role to play in this, and it can displace fossil fuels and hence reduce greenhouse gas emissions in transport, power generation, industrial energy, as a feedstock, and in heating. All of this results in ‘avoided GHG emissions’ that would otherwise have been released by burning fossil fuels.
Equally important, the uptake of hydrogen in trucks, trains and portable power plants, alongside battery electric in cars, can have a substantial impact on improving air quality in cities. According to the WHO, some 4 million premature deaths per year occur due to poor air quality today.
ESG policy
The Company’s investment objective is to deliver an attractive level of capital growth by investing, directly or indirectly, in a diversified portfolio of hydrogen and complementary hydrogen focused assets whilst contributing to climate change mitigation by integrating core ESG principles into its decision making and ownership process.
HGEN's ESG Policy
Low-carbon growth
- Investing for a climate-positive environmental impact
- Exclude fossil fuels extraction
- Prioritise this long-term goal over short-term maximisation of shareholder returns or corporate profits
- Backing innovators in low-carbon industries
Screening and due diligence
- Detailed screening and sustainability due diligence of prospective investments against EU Taxonomy
- Assessment of principle adverse indicators
Effective Board
- Positive and proactive engagement with the boards of Private Hydrogen Assets
- Effective and diverse independent directors
- Simple and transparent pay structures that reward superior outcomes
Sustainable business practices
- Strong ethical standards, to deliver positive impacts on the environment and society
- Alignment with ISSB and EU Taxonomy
- Transparency
ESG at HGEN
- KPIs, in particular avoided GHG emissions
- Framing investments around UN SDGs, UN GC, LSE Green Economy Mark and UN PRI
ESG track record
The principals of the Investment Adviser have developed and implemented ESG policies in some of the world’s largest energy companies and in investment funds. This includes in relation to the Task Force on Climate Related Financial Disclosures methodology, climate change and clean energy strategies, human rights and fringe communities relations, fracking, Arctic operations, disclosure and transparency, and executive compensation.
They have conducted ESG, community engagements and HSSE site visits in countries and territories including Alaska, Texas, Brazil, Nigeria, Morocco, Qatar, Russia, China, the Netherlands, Ireland and Canada.
ESG standards
Sustainable Finance Disclosure Regulation and EU Taxonomy
HydrogenOne is classified as an Article 9 Fund under the EU Sustainable Finance Disclosure Regulation (“SFDR”) and EU Taxonomy Regulation (“EU Taxonomy”). The SFDR is a legislative tool designed to reorient capital towards more sustainable businesses while combating ‘greenwashing’. A key part of the SFDR is linked to transparency, explaining how managers take adverse impacts on sustainability factors into account.
The Article 9 classification means that the Company has a sustainable investment objective. Through investing, directly or indirectly, in a diversified portfolio of hydrogen and complementary hydrogen focused assets, HydrogenOne contributes to climate change mitigation and integrates core ESG principles into its decision making and ownership process. As part of the classification, the Company will be reporting greenhouse gas emissions and avoided greenhouse gas emissions on an annual basis in its annual financial reports.
As part of the requirements, the Company has published the following disclosures which outline how the Company aligns with the regulation and Article 9 classification:
Chapter IV – website disclosure
SFDR Annex V disclosures
Principles for Responsible Investment
The Company is a signatory of the United Nations-supported Principles for Responsible Investment (“PRI”). PRI is recognised as the leading global network for investors who are committed to integrating ESG considerations into their investment practices and ownership policies.
LSE Green Economy Mark
HydrogenOne’s role in clean hydrogen investments has been recognised by its award of the Green Economy Mark by London Stock Exchange plc, which recognises companies that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy.
United Nations Sustainable Development Goals
The Company’s investment objective and investment policy are closely aligned with seven of the United Nations Sustainable Development Goals:
