UK’s leading ethical investors warm to nuclear power
A significant number of leading ethical investors have softened their opposition to nuclear power as doubts grow over the adequacy of wind and solar power as substitutes for carbon-based energy sources, a Kames survey has found.
The survey, which canvassed the views of 50 of the UK’s most prominent ethical investors, found that 44% of respondents have softened their stance on nuclear power. Previous surveys and anecdotal evidence had suggested outright opposition to nuclear, but the results suggest that there is a growing acknowledgement that the UK needs to find alternative energy sources to meet climate change targets and replace its existing nuclear capabilities.
The softening of the stance was demonstrated by one respondent’s comments that ‘nuclear power is essential to the viable production of sufficient energy to meets needs and demand. It is facile to think that wind and solar power can replace dwindling carbon-based energy’.
Despite the findings of the survey, Kames has no plans to relax its ethical screening criteria, which rule out investing in any company which provides critical services to, or owns or operates nuclear facilities. The criteria prevent its ethical funds investing in any companies whose activities breach its stance on nuclear power, animal welfare, alcohol and gambling, amongst others.
The survey also found that ethical investors are bucking the continuing trend amongst the general public to ‘bash a banker’, by softening their attitude to the screening of banks. These are generally excluded from Kames’ ethical funds due to their exposure to third world debt and corporate debt, but the findings suggest ethical investors are potentially willing to accept changes to the criteria particularly as a number of UK banks transition to more retail-focussed models.
However, because of the structural changes occurring in the banking sector, Kames believes there will be scope for the funds to invest in a wider variety of banks in the near future without the need to change its screening criteria.
Kames Head of Corporate Governance and Ethical Research Ryan Smith says: ‘Despite the Fukushima nuclear accident in Japan in 2011, many leading ethical investors seem to be softening their views on nuclear power. One can only assume this is due to the growing concerns about climate change.
‘Overall the results of the survey suggest our ethical screening criteria are still broadly in line with client expectations and remain relevant, so we do not anticipate making any changes.’