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Sustainability Matters

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.

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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.

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Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.