Climate Change Data

Environmental Metrics

ESG Focus Areas

• Clean hydrogen and energy storage for the energy transition
• Net Zero
• Air quality
• Energy security
• Sustainable business practices
• UN Sustainable Development Goals
• Principles for Responsible Investment
• Green Economy Mark

Environmental Achievements

• Invested material capital into low carbon growth, with portfolio companies contributing to avoided greenhouse gas emissions (methodology under development)

Social Achievements

• Awarded the London Stock Exchange’s Green Economy Mark in 2021
• Actively engaged with the boards of its Private Hydrogen Assets on ESG matters

Governance Achievements

• ESG principles embedded into investment decision-making and ownership process
• Board representation in invested Private Hydrogen Assets: 100%
• Complied with article 8 of the Sustainable Finance Disclosure Regulation (“SFDR”)

Climate Goals & Targets

Environmental Challenges

• Changes in the legislative and regulatory framework that affect the hydrogen sector
• Operational risks in the portfolio
• Valuation risks (energy prices/inflation/operational performance)
• Investment process fails to identify new opportunities
• Lack of future pipeline and/or funding
• Increased competition for assets
• Underperforming investment or investment strategy
• Extreme market volatility
• Disruption to, or failure of the Company’s Administrator or other parties
• Risk that portfolio asset valuations published do not represent the Fair Market Values
• Key person risk
• Tax breaches
• Political and associated economic risk (exposure to Russia and/or Ukraine)

Mitigation Strategies

• Significant experience in the energy sector and ongoing monitoring of risks
• Extensive contacts across the sector
• Due diligence prior to and during investments
• Access to a range of hydrogen projects in different countries and at different points in the value chain
• Monitoring the outlook for electricity and hydrogen prices
• Hedging exposure to fluctuating electricity and hydrogen prices
• Vigorous due diligence process and close work with external consultants
• Constant monitoring of the portfolio by the Investment Adviser and the AIFM
• Diversification in counterparties and service providers
• Diversified portfolio
• Quarterly review of portfolio performance and underlying asset risks
• Monitoring the liquidity in the market
• Capital raise or liquidation of an asset
• Review of operational counterparties
• Due diligence process for counterparties of SPVs and underlying assets
• Significant experience in valuation of assets
• Quarterly review of valuation policies by the Valuation Committee
• Expanding business/staffing levels to diversify knowledge
• Periodic review of the corporate structure by the Company and its advisors
• Professional structural advice prior to investment
• Review of the portfolio for exposure to Russia and Ukraine

Supply Chain Management

Responsible Procurement

• ESG screening of investable universe for breaches of UN Global Compact principles

Climate-Related Risks & Opportunities

Transition Risks

• Regulatory changes
• Changes in government policy or support
• Policy support for green hydrogen technologies
• Changes in market prices of electricity and hydrogen

Opportunities

• Investment opportunities in clean hydrogen and energy storage

Reporting Standards

Frameworks Used: UN Global Compact, UN Principles for Responsible Investment, Task Force on Climate-related Financial Disclosures (TCFD), EU Sustainable Finance Taxonomy

UN Sustainable Development Goals

• Goal 3
• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 14
• Goal 15

Investments align with UN SDGs related to health, energy, industry, cities, production, water, and land

Awards & Recognition

• London Stock Exchange’s Green Economy Mark

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation

Environmental Achievements

• Required material investees to measure avoided emissions and Scope 1, 2, and 3 greenhouse gas emissions.

Climate Goals & Targets

Environmental Challenges

• No projects directly producing hydrogen were operational in 2022.

Mitigation Strategies

• Engaging with portfolio companies to develop and implement carbon reduction plans.

Supply Chain Management

Responsible Procurement

• Recommendations for improvement in supplier due diligence in some portfolio companies.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: EU SFDR, EU Taxonomy, OECD Guidelines for Multinational Enterprises, UN Guiding Principles on Business and Human Rights

UN Sustainable Development Goals

• Goal 13 (Climate Action)

Investments either directly or indirectly displace fossil fuels, avoiding greenhouse gas emissions and making a clear contribution to achieving the Paris Accords target.

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation

Environmental Achievements

• Engaged material investees to measure and report GHG emissions across scopes 1, 2, and 3.
• Avoided 91,116 tCO2e emissions

Climate Goals & Targets

Environmental Challenges

• Some portfolio company activities do not fully align with the EU Taxonomy.

Mitigation Strategies

• Engaged external consultants to map economic activity to the EU Taxonomy and assess against "Do No Significant Harm" criteria.
• Monitored portfolio companies and required reporting on critical metrics.

Supply Chain Management

Responsible Procurement

• Review emphasized each company's policies and procedures for detecting human rights abuses in their supply chains, leading to recommendations for improvement, such as introducing enhanced supplier due diligence.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: EU Taxonomy, SFDR, Greenhouse Gas Protocol

Environmental Metrics

ESG Focus Areas

• Climate change mitigation
• Sustainable investments
• Greenhouse gas emissions avoidance

Environmental Achievements

• 157,868 tCO2e cumulative greenhouse gas emissions avoided since IPO
• 88.1% portfolio alignment with the EU Taxonomy
• 62,282 MWh potential lifetime clean energy of products installed in HY2024

Social Achievements

• 1,370 jobs supported in HY2024
• Produced the Company’s first standalone Sustainability Report aligned with the International Sustainability Standards Board
• Reported to the Principles of Responsible Investment

Governance Achievements

• 50% Board gender diversity
• Reported to the Carbon Disclosure Project
• Received positive S&P Global Corporate Sustainability Assessment scores

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic climate impacting investment trust sector valuations and capital outflows from UK equities
• Higher market discount rates and reduced risk appetite
• Share price discount to NAV

Mitigation Strategies

• Focus on nurturing portfolio companies to achieve full growth potential
• Protecting invested capital, preserving cash, and realizing returns
• Assessing potential divestment opportunities

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: International Sustainability Standards Board, S2 Climate Standard, Taskforce on Climate-related Financial Disclosures, EU Taxonomy

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3
• Goal 7
• Goal 9
• Goal 11
• Goal 12
• Goal 14
• Goal 15

Investments directly or indirectly displace fossil fuels, contributing to Paris Agreement targets.

Sustainable Products & Innovation

• Electrolysers
• Fuel cells
• Hydrogen pipelines
• Hydrogen propulsion systems

Awards & Recognition

• Hydrogen UK’s 2024 Innovation Project award