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.

THE recent UN IPCC climate report contained some genuinely shocking news. As well as warning that the effort to limit global warming close to 1.5⁰C above pre-industrial levels requires immediate and large scale action, it assessed that some of the damage already caused to the planet – such as the melting of land ice in Greenland – may be irreversible1.

Investors have an important role to play in pushing forward the climate action plans we now know are needed.
 
Climate change looks set to remain squarely centre stage ahead of a meeting of world leaders at COP26 in Glasgow in just two months time. COP26 will attempt to draw nations into targeting more ambitious climate action goals and committing to additional spending.

This month also saw the passing of a US$1 trillion bipartisan infrastructure bill through the US Senate. The bill awaits Congressional approval, but it has already received strong support from big business and the unions.

Key investment themes include additional funds to upgrade power infrastructure, rail links and water systems and invest in electric vehicle charging stations – as expected under a president that wants to turn America’s power grid carbon neutral by 20352.

While governments are providing vast sums to fund green infrastructure, there is a vast array of investment opportunities linked to what has become the greatest development project of our time.  

There are now a large number of funds that specifically embed sustainability into their investment processes and adhere to strict criteria that not only direct them to avoid polluters but also require them to invest in companies that are and will, in the future, form parts of the solution.

One fund aiming to be part of the solution is the FP Foresight UK Infrastructure Income Fund. It offers an exposure to investment companies dedicated to renewable energy and infrastructure projects and targets an attractive annual income from its investments of 5%, although this level of income is not guaranteed. Largest holdings include the investment trust companies Greencoat UK Wind (10%) JLEN Environmental Assets (5%) and NextEnergy Solar (5%).

The Foresight UK Infrastructure Income Fund is one of three funds with a sustainable focus that feature among Tom Stevenson’s five fund picks for 2021.

You can learn more about sustainable investing at Fidelity’s Sustainable and ESG investing hub.

Find out how investing your pension fund in a sustainable way can make a real difference in the video below

Source:

1 - IPCC, 09.08.21
2 - CNBC, 11.08.21

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Overseas investments will be affected by movements in currency exchange rates. Select 50 is not a personal recommendation to buy or sell a fund. The Foresight UK Infrastructure Income Fund uses financial derivative instruments for investment purposes, which may expose the fund to a higher degree of risk and can cause investments to experience larger than average price fluctuations. The fund also uses currency hedging. Currency hedging is used to substantially reduce the risk of losses from unfavourable exchange rate movements on holdings in currencies that differ from the dealing currency. Hedging also has the effect of limiting the potential for currency gains to be made. The Foresight UK Infrastructure Income Fund investment policy means it invests mainly in units in collective investment schemes. Withdrawals from a pension product will not be possible until you reach age 55. 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 a Fidelity adviser or an authorised financial adviser of your choice.

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