Can Nuclear Power Fit in a Sustainable Portfolio?
Nuclear operators in the U.S. have strong safety records and help utilities lower their carbon emissions, but the risk of a catastrophic accident remains.
Most discussion of how utilities generate electricity revolves around fossil fuels and renewables. Nuclear power, it often seems, is the odd source out. Yet nuclear remains a key component of the electricity generation mix in the United States, powering about 20% of it.
Investors traditionally have viewed nuclear power in largely black-and-white terms. It remains a commonly used exclusion among intentional environmental, social, and governance funds. But short of excluding utilities that use nuclear power, how should investors view a utility's nuclear exposure, particularly against the backdrop of climate change? That's the topic of research recently completed by Morningstar utilities analysts and Sustainalytics.
Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.