Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

THERE’S just over 25 years to go until 2050 - a year that’s earmarked for the world achieving total net zero emissions.

And a fundamental part of transitioning to a global net zero economy is securing a renewable energy system. But what will take its place?

There are several options available - including wind power, solar energy, tidal power to name just a few - though this year - hydrogen - specifically green hydrogen is receiving worldwide attention.

Green hydrogen is produced through electrolysis, a process that separates water into hydrogen and oxygen, using electricity generated from renewable sources, according to the World Economic Forum.

It’s already being used in transport - there are buses and cars that run on hydrogen fuel cells. In the UK, there are 14 publicly available hydrogen filling stations3.

Hydrogen-based fuels could also be used in shipping and aviation - industries that are currently reliant on fossil fuels.

Meanwhile in domestic life, hydrogen also has the potential to be used for heating and cooking in homes.

There is some pushback against this. Recently, organisations including Octopus Energy wrote to the UK Secretary of State for the Department for Energy Security and Net Zero welcoming scaling up the hydrogen economy but warned against recommendations for blending hydrogen into the gas grid, due to “unfair costs for consumers”3.

So, widespread implementation of hydrogen in the UK may well face a delay until costs can be navigated.

Despite this, both industry and governments have acknowledged hydrogen as an important pillar of a net zero company4. And they are parting with their cash.

In April, a new venture was established to develop green hydrogen electrolysis projects in England, Scotland, and Wales for industrial offtake and consumption2. The project secured an investment of up to £5m.

Last September, the European Commission approved €5.2bn in public funding for hydrogen projects.

Meanwhile in the US, Joe Biden’s Inflation Reduction Act dedicated $369bn for clean energy and climate-related projects including green hydrogen. Since then, further plans have been unveiled including a $4bn hydrogen plant in Texas.

This significant investment shows hydrogen not only has momentum - it will also be an inevitable part of the future.

That’s great news if you’re interested in sustainable investing and you’re looking to invest for the long-term.

So, how can you take advantage of this?

Research is integral of course.

First, you can browse through our Sustainable Investment Finder. It includes advanced filters that allow you to avoid coal, oil and gas companies, favour green companies and requires net zero plan from all/most companies.

It also includes filters on social, governance, ethical, impact and stewardship and responsible ownership.

Secondly, it’s important to research each fund you’re interested in. Look at its growth, performance, charges and dividends (if it offers any).

For investors looking to invest sustainably, the fund’s top holdings will also be important.

If you need some guidance on what to invest in, you can always look through our articles on sustainable investing.

Alternatively, financial advice is also an option if you’re looking to include sustainable funds in different account types - including Investment Accounts, Stocks and Shares ISAs and Self-invested Personal Pensions.

If you have children or grandchildren, you could also consider a Junior ISA or a Junior SIPP.

Since sustainability is set to be a major theme in the next 25 years, sustainable funds may well be a great addition to junior accounts such as a Junior ISA or Junior SIPP.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. An Investment Manager’s focus on securities of companies which maintain strong environmental, social and governance (“ESG”) credentials may result in a return that at times compares unfavourably to similar products without such focus. No representation nor warranty is made with respect to the fairness, accuracy or completeness of such credentials. The status of a security’s ESG credentials can change over time. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). Junior ISAs are long term tax-efficient savings accounts for children. Withdrawals will not be possible until the child reaches age 18. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

Sources

1. World Economic Forum, 21 December 2021
2. Insider Media, 11 April 2023
3. Energy Live News, 12 April 2023
4. Sustainable Investment, 6 April 2023

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