The French institutional investor association has produced a report discussing the conditions for integrating civil nuclear energy into ESG investment policies, with Af2i describing the sector as “often misunderstood and undervalued in sustainable investment policies”.
The report is the culmination of a year’s work and draws on contributions from around 30 institutional investors, experts, and industry stakeholders.
One of the reasons for the association tackling the subject is France’s recommitment to nuclear energy. In February 2022, president Emmanuel Macron said France would build at least six nuclear reactors in the coming decades, and that the country would investigate ways to extend the 40-year lifecycle of existing ones to more than 50 years.
According to Af2i, this, in addition to the complexity of the nuclear sector and the number of existing and forthcoming regulations, means that institutional investors have needed to address the question of their involvement in the financing of the new reactors.
It said its report aimed to provide Af2i members and other investors and financiers with “the clearest possible information” on the nuclear energy industry and its constraints, including with respect to sustainable growth and energy transition objectives.
“To overcome these obstacles, we need a coordinated update of ESG frameworks and analysis tools”
“Our goal was to produce a dispassionate, educational report about a sector that is not easy to grasp and yet has a particular role to play in the energy transition,” Eric Sidot, general manager of Af2i in Paris, told IPE.
He said the intention of the Af2i report was not to promote civil nuclear energy but to give clear and complete information about it, noting that the report was transparent about nuclear and radiation accidents and incidents, and leave value judgements to others.
ESG assessments difficult
According to the report’s authors, one of the key points to note for investors is that nuclear energy is one of the most regulated industrial sectors globally, offering “strong risk visibility and greater comparability of practices”.
At the same time, it said that assessing nuclear energy from an ESG investing point of view was still challenging due to inconsistent standards, different approaches across countries, and a lack of detailed data.
Current ESG data providers struggled to capture the sector’s complexity, Af2i’s report noted, such as the full fuel cycle, societal acceptance, long-term waste management, and specific risks.
“To overcome these obstacles, we need a coordinated update of ESG frameworks and analysis tools,” the report authors wrote.
“This requires stronger collaboration between investors, regulators, rating agencies, NGOs, scientific communities, and industry players to build clear, tailored evaluation grids.”
According to the Af2i, the most useful framework for classifying companies and identifying their risks and impacts is the International Atomic Energy Agency’s upstream-downstream mapping.
It said the EU taxonomy was a key reference, but did not year cover all nuclear-related activities. Under pressure from the German and French governments, in 2022 the European Commission deemed certain nuclear activities as eligible “green” economic activities.
Af2i also said the sustainability Omnibus had increased volatility and reduced clarity in the EU sustainable finance framework, and that such “repeated adjustments undermine the stability expected by financial actors and make it harder to anchor sustainable investment strategies in a clear, stable regulatory reference”.
For investors, Af2i’s report states, it is “essential they explicitly define their nuclear scope (included activities, acceptable exposure thresholds, consideration of the value chain) to ensure consistency, comparability, and limit greenwashing risks”.
European Investment Bank
Af2i also said it was worth noting changes in major public actors’ policies, such as the European Investment Bank (EIB).
It said the bank’s exclusion policy currently penalised private equity funds supporting subcontractors in the nuclear supply chain.
“A policy shift by the EIB, aligned with the evolving EU Taxonomy, would send a very positive signal to the European financial community,” Af2i said.
According to Sidot, there are perhaps some grounds to be optimistic. He noted that although the EIB has historically been silent on financing new nuclear plants, under new leadership, it appears to be more open to some financial engagement in the nuclear energy sector.
“If you look at the documents accompanying the EIB’s 2026-2030 climate bank roadmap, you’ll find references to new nuclear technologies such as small and advanced modular nuclear reactors,” Eric Sidot told IPE. “We think that’s positive.”
The study was carried out with the help of Deloitte. The report is currently only available in French, but an English language version will be published in the coming weeks.
