The Role of Nuclear Energy in Crafting a Low-Carbon Future and How ESG Investing Can Help

Sep 21, 2023 | Climate Change, ESG

I founded Green Investment Strategies because of the importance of tackling the challenge of climate change. The health of our planet is at stake. It’s heartening to witness the robust and evolving discussions on how to achieve a sustainable future, and today, I’d like to focus on a pivotal component: nuclear energy.


a picture of mount parnassus
PARNASSUS

Recently, Parnassus Investments, a forerunner in responsible investing, made a commendable decision by updating their stance on nuclear energy. Since 1984, Parnassus had a strict rule against investing in companies with significant revenue from nuclear power generation, primarily due to safety and cost concerns. However, our best thinking around nuclear energy is shifting. In their recent announcement, Parnassus recognized the invaluable role of nuclear power in achieving a low-carbon economy. The data speaks for itself: nuclear energy is a reliable, low-to-no emissions energy source. With significant improvements in safety, regulation, and technology, it has become an integral part of our energy landscape.

The sentiments of Marian Macindoe, Parnassus’s Head of ESG stewardship, are both profound and timely. She highlighted that ”nuclear energy will be an essential source of fuel in the transition to the renewable sources required to support a low-carbon economy.” Indeed, as we aspire to a world predominantly powered by renewable energy, nuclear power can act as a bridge, ensuring a consistent energy supply.

a picture of Oliver Stone talking

OLIVER STONE


Academy Award winning director Oliver Stone reached a similar conclusion in his recent documentary “Nuclear Now.” He presented a compelling case for the importance of nuclear energy in addressing climate change. He pointed out that the world’s energy demands will increase dramatically as millions of people in Asia, Latin America, and Africa enter the middle class and rightfully demand a modern lifestyle with all its conveniences and comforts. In his view, wind, solar, hydroelectric and geothermal will not generate enough power to meet this increased demand for energy. Nor are these sources reliable enough to meet all the world’s growing energy needs. Sometimes the sun doesn’t shine, or the wind doesn’t blow, and there are parts of the planet where there isn’t enough water for hydroelectric or enough volcanic activity for geothermal. In Stone’s view, the only way to increase our power output enough to provide for everyone, while keeping carbon dioxide levels low enough that the planet doesn’t get too hot for us to live on, is by embracing nuclear energy.

It is important to note that there are still some challenges that need to be addressed before nuclear energy can be fully embraced as a clean energy solution. However, Stone argues that these challenges are manageable.


DEATH
DEATH


When hearing the phrase, “nuclear energy”, many of us worry about nuclear energy disasters, such as those at Chernobyl and Fukushima. But what people don’t tell you is that, even putting aside climate change, status quo energy sources like coal and oil are far more dangerous. Coal kills 24 people per terawatt-hour of energy generated. Oil kills 18. Nuclear only kills .03. Windmills kill more people! The only safer source of energy is solar.

Significant advances have been made in nuclear safety and technology in recent years. Many of the myths and misconceptions surrounding nuclear energy, such as the claim that it is too expensive or that it poses a significant safety risk, are unfounded. New nuclear technologies have the potential to reduce the cost of nuclear power generation and make it even more competitive with other energy sources, and the issue of nuclear waste disposal is manageable with proper planning and investment.



A graph showing an investment earning money.
INVESTING


Parnassus’s decision isn’t just a symbolic shift. It means nuclear power companies will now be considered for investment by the firm. But this doesn’t imply unchecked investments. Parnassus commits to thorough risk evaluations, emphasizing governance, safety protocols, and an unwavering commitment to responsible nuclear waste storage and disposal. This is the correct way to think about investing in nuclear energy. It’s the approach I would expect from a leader in ESG investing.

This shift also mirrors the evolving mindset of today’s investors. Instead of mere exclusionary practices, there’s a growing emphasis on investments with positive environmental and social attributes. We need more comprehensive approaches like this in our fight against climate change, where every viable solution is put into action.

In closing, navigating our path to a low-carbon future is a multifaceted endeavor. While renewable sources like wind, solar, and hydroelectric power play crucial roles, we cannot sideline the contribution of nuclear energy. Opening our minds to consider investing in nuclear energy is not only a reflection of advancements in nuclear technology but also an acknowledgment of our collective responsibility towards a sustainable future. It is yet one more way that our big human brains give me hope that through scientific advances and smarter decisions, we can pave the way for a greener, and better, tomorrow.