In a move to encourage private sector investment, chancellor Jeremy Hunt said in the spring Budget that the UK green taxonomy will class nuclear power as ‘environmentally sustainable’, subject to consultation.
Although nuclear fuels are not renewable, the classification would enable nuclear power to have the same investment incentives as renewable energy. But despite being low-carbon, it is not uncommon to come across ESG funds and investment companies that exclude nuclear power generation. So will investment managers follow the UK government’s approach to nuclear power?
Richard Lum, co-chief investment officer at Victory Hill Capital Partners, argues that it is "imperative that the government should move away from [nuclear] technology if it is serious about decarbonising”, citing carbon emissions that occur during the extraction and disposal of the fuel source for nuclear energy and in the materials used in the construction of plants.
He adds that Victory Hill’s position on nuclear energy has not changed, and disagrees with it being ‘environmentally sustainable’. “Fundamentally, nuclear is not environmentally sustainable given, at the very least, the waste from nuclear power stations is highly toxic and needs a permanent form of containment, which prevents any potential forms of leakage into the biosphere,” he says.
“On this basis alone, it is difficult to characterise nuclear power as environmentally sustainable.”