Ethical investors soften to nuclear

Ethical investors soften to nuclear

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UK ethical investors have warmed to nuclear power as doubts have grown over the adequacy of wind and solar power as substitutes for carbon-based energy sources, Kames has found.

Almost half (44%) of the 50 of prominent ethical investors surveyed said that they had softened their stance on nuclear power. Although previous surveys suggested outright opposition to nuclear, there is a growing acknowledgement that the UK needs to find alternative energy sources to meet climate change targets, according to Kames.

“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,” said one respondent.

“Despite the Fukushima nuclear accident in Japan in 2011, many leading ethical investors seem to be softening their views on nuclear power,” said Ryan Smith, Kames head of corporate governance and ethical research.

One can only assume this is due to the growing concerns about climate change.”

The survey also found that ethical investors are softening their attitude towards the screening of banks.

This may be because of the structural changes occurring in the banking sector, which leaves scope for the funds to invest in a wider variety of banks. 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.

Despite the findings of the survey, Kames has no plans to relax its ethical screening criteria, which rule out nuclear facilities. Banks are also generally excluded from Kames’ ethical funds due to their exposure to third world debt and corporate debt.

“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,” said Smith.

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