Nuclear is the New Green

The evolution of nuclear energy in sustainable investing

October 2025

Felicia Daryonoputri

Associate, Sustainable Investing

A Brief History

Nuclear power generation experienced rapid expansion between the 1970s and 1990s as nations sought alternatives to fossil fuels amid oil price volatility and growing energy demand. However, nuclear power’s growth waned in the early 2000s following a series of high-profile incidents: Three Mile Island (1979), Chernobyl (1986), and Fukushima (2011), that negatively shifted public trust and reshaped political attitudes globally.

For much of the last two decades, nuclear energy was largely absent from sustainable portfolios as many ESG funds deliberately excluded it from their investment universe. This exclusion extended into the sustainable debt markets as well. A 2023 review of the 30 global systemically important banks found that 57% have explicitly excluded nuclear energy from their respective green or sustainable financing frameworks’ taxonomies, while 40% were ambiguous on whether it is included.

The Changing Tide

In recent years, support has grown in favour of nuclear energy. Accelerating decarbonization targets, heightened geopolitical instability in global energy markets, and the rapid growth of energy-intensive technologies such as artificial intelligence and data centers have underscored the critical need for reliable, low carbon baseload power.

The Intergovernmental Panel on Climate Change (IPCC) includes nuclear energy among the low-carbon technologies featured in its multiple scenario pathways that limit global warming to 1.5-2℃ above pre-industrial levels.

Policymakers have also shifted their attitudes toward nuclear energy. Nuclear energy has garnered bipartisan support in the United States with the passing of the ADVANCE Act of 2024, which speeds up the approval and development of advanced nuclear reactors. Nuclear energy has been a clear winner amid the Trump administration’s backlash of renewable energy as the administration aims to quadruple US nuclear energy capacity by 2050.

Globally, 70 gigawatts of new nuclear capacity are under construction, and more than 40 countries have plans to expand nuclear’s role in their energy systems. As artificial intelligence continues to scale globally, major technology firms are exploring nuclear partnerships and small modular reactors to ensure stable, low carbon energy for their expanding data infrastructure. The Three Mile Island energy plant is expected to resume operations in 2028 to power Microsoft’s AI data centers, an approach that was also taken by other big tech companies like Google and Amazon to support their rapidly increasing energy demand.

Nuclear Energy in Sustainable Investing

Both North American and European sustainable funds are increasingly removing long-standing exclusions against nuclear investments. This shift is driven by the growing recognition of nuclear’s role in meeting dual goals of energy security and net zero emissions.

Projections show that nuclear investment remains steady under the current policies but rises sharply if countries follow through on their announced pledges, and even more so in a net zero emissions by 2050 scenario. In all cases, spending peaks in the 2030s as new projects and reactor life extensions ramp up, then gradually tapers toward 2050 once most construction is complete. Regardless of which scenario will prove to be reality, we believe the outlook is clear: the need for nuclear energy as a scalable, low-carbon energy source is understood and anticipated at a global level.

Notes: MER = market exchange rate; SMR = small modular reactor; STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario; NZE = Net Zero Emissions by 2050 Scenario. Source: IEA (2024), World Energy Outlook 2024.

In 2022, the EU taxonomy labelled certain nuclear activities as “transitional,” provided that strict technical criteria and waste-disposal safeguards were made. Teollisuuden Voima Oyj, a Finnish power producer, debuted the first EU green bond from the nuclear sector and saw more than 3.5x investor orders for the €500 million deal. This deal marks a milestone for Europe’s green debt market, marrying the introduction of Europe’s Green Bond Standard and the inclusion of nuclear power.

RPIA's Approach to Nuclear Power Generation

RP Broad Corporate Bond (Fossil Fuel Exclusion) strategy applies a focused exclusionary approach within the Energy sector by excluding Natural Gas Distribution, Oil & Gas Exploration, Integrated Oil & Gas, and Oil & Gas Pipeline, while removing the Generation sub-category from the exclusions.

Although the Energy Generation sub-category includes a broad range of electricity and power producers, issuers with any fossil fuel involvement remain screened out under the fund’s other exclusion criteria. What remains eligible are electricity and power generation companies without oil and gas revenues, such as renewables and nuclear, which aligns with the strategy’s mandate.

This adjustment broadens the opportunity to include high-quality nuclear energy issuers focused on delivering reliable, low-carbon power. A recent example is BPC Generation Infrastructure Trust (BGIT), the holding company through which OMERS invests in Bruce Power. BGIT recently completed its inaugural C$1.5 billion bond issuance, supporting the long-term operations of the Canadian nuclear operator. We view this transaction as a favourable and timely investment opportunity that underscores strong investor confidence in the sector’s attractive fundamentals.

The strategy’s focused exclusionary approach recognizes the critical role nuclear energy can play in advancing a low-carbon future.

Sources

1. U.S. Energy Information Administration. “Following the Fukushima nuclear accident, Japan shut down nearly all of its nuclear reactors.” Today in Energy. March 2023. https://www.eia.gov/todayinenergy/detail.php?id=55559

2. Ritchie, Hannah, et al. “Nuclear Energy.” Our World in Data. Accessed September 2025. https://ourworldindata.org/nuclear-energy

3. Morningstar. “Can Nuclear Power Fit in a Sustainable Portfolio?” Sustainable Investing. Accessed September 2025. https://www.morningstar.com/sustainable-investing/can-nuclear-power-fit-sustainable-portfolio

4. Jenkins, Jesse D. “A Critical Disconnect: Nuclear Energy in Climate Finance.” Center on Global Energy Policy, Columbia University. September 2023. https://www.energypolicy.columbia.edu/publications/a-critical-disconnect-relying-on-nuclear-energy-in-decarbonization-models-while-excluding-it-from-climate-finance-taxonomies/

5. International Energy Agency. “A New Era for Nuclear Energy Beckons.” IEA Newsroom. June 2023. https://www.iea.org/news/a-new-era-for-nuclear-energy-beckons-as-projects-policies-and-investments-increase

6. U.S. Nuclear Regulatory Commission. “About the ADVANCE Act.” NRC.gov. 2023. https://www.nrc.gov/about-nrc/governing-laws/advance-act/about-advance-act.html

7. U.S. Department of Energy. “Key Takeaways from Executive Orders on Nuclear Energy.” Energy.gov. 2017. https://www.energy.gov/ne/articles/9-key-takeaways-president-trumps-executive-orders-nuclear-energy

8. BBC. “Nuclear Energy: The Shifting Global Debate.” BBC News. September 2025. https://www.bbc.com/news/articles/cx25v2d7zexo

9. RBC Capital Markets. “Energy Security Is Reshaping Sustainable Investing.” RBC Capital Markets Insights. July 2025. https://www.rbccm.com/en/story/story.page?dcr=templatedata/article/story/data/2025/07/energy-security-is-reshaping-sustainable-investing

10. European Parliamentary Research Service. “Taxonomy and Nuclear Energy: The EU Debate.” Briefing 698935. January 2022. https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/698935/EPRS_BRI(2022)698935_EN.pdf

11. Bloomberg News. “Finnish Nuclear Firm Tests EU Green Bond Standard.” Bloomberg. September 8, 2025. https://www.bloomberg.com/news/articles/2025-09-08/finnish-nuclear-firm-tests-eu-green-bond-gold-standard-with-sale

12. International Energy Agency. The Path to a New Era for Nuclear Energy. May 2025. https://iea.blob.core.windows.net/assets/b6a6fc8c-c62e-411d-a15c-bf211ccc06f3/ThePathtoaNewEraforNuclearEnergy.pdf

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