Nuclear Power

Issue Brief: Nuclear Power

In the global debate over nuclear power, there are no clear-cut answers. Nuclear power is seen by some as a viable option that can help alleviate the world’s burgeoning energy demands and climate change crisis. Others view it as a grave environmental and public safety threat. The partial meltdowns in Japan’s Fukushima Daiichi nuclear complex have renewed intense controversy among environmentalists, scientists, policymakers, and governments over its merits and risks.

Historically, the world has witnessed the devastating public health, safety, economic, and environmental impacts of nuclear power accidents at Three Mile Island in 1979, Chernobyl in 1986, and Fukushima in 2011—where more than 50,000 households were displaced as radiation leaked into the air, soil, and sea. Other serious issues include the safety of aging nuclear facilities, the safe storage and transport of radioactive waste, and terrorism and nuclear proliferation risks. In light of these safety and security risks, Calvert does not support the development of new nuclear power plants or view it as a viable climate change solution.

Sustainability Challenges

 Nuclear power is created from controlled nuclear reactions involving uranium or plutonium. Along with generating tremendous power, this process creates extremely hazardous and toxic radioactive waste that can pose health and safety risks to power plant workers and others, as well as potentially contaminate the local groundwater and ecosystems. The “spent” fuel must be isolated from the environment for hundreds of thousands of years before it loses its potency—or recycled as a new fuel source. Most waste is stored in spent-fuel pools—where the used fuel rods are stored under water—or in dry casks, where the nuclear waste is covered in cement. Globally, and certainly in the U.S., there are concerns that many older sites have over-packed spent-fuel pools, making them vulnerable to natural disasters, terrorist attacks, and environmental contamination. The issue of nuclear proliferation is also a huge concern, as the unused uranium and plutonium created during a reactor’s operation can be used to create nuclear weapons. While France and other European countries recycle nuclear waste, this practice is banned in the U.S. to discourage potential trade in nuclear armament.

Nuclear Policies Vary Worldwide

The nuclear energy debate is reflected in the contrasting positions of countries worldwide. Globally, less than a quarter of the world’s electricity comes from nuclear power, but over 80% of that power is concentrated in industrialized countries, led by the United States, France, and Japan.1 France derives more than 80% of its electricity from nuclear power and plans to rebuild its aging power stations, while the U.S. and Japan obtain about 20% of their energy from nuclear sources.2 Germany is taking a strong stand against nuclear power following the Fukushima meltdowns, vowing to close all of its nuclear power plants by 2022. In contrast, industrializing, electricity-hungry countries, such as India and China, are moving quickly to develop new energy from nearly all available power sources—including coal and nuclear. China, India, Russia, and South Korea all have a number of new nuclear reactors under construction. Worldwide, there are 440 commercial nuclear power reactors operating in 30 countries.3

A Look at the Energy Market

From a sustainability perspective, Calvert evaluates energy options—and the companies involved in energy development—in the dual contexts of addressing both climate change and the world’s escalating energy demands. In weighing energy options, governments, investors, businesses, and the public face tough policy and investment choices in working to secure a sustainable future. Overall, Calvert favors companies in the energy sector that are developing leading sustainable technologies and alternative energy options that reduce carbon emissions—and that meet strict environmental and public safety standards. From a financial perspective, nuclear power plants are expensive and typically take a decade or longer to build. Once operational, these plants lock in a community’s power options for decades by creating a steady power and revenue source for utility companies. Importantly, in Calvert’s view, the potential for catastrophic events is nearly impossible to factor into the analysis of nuclear power, with the risks clearly outweighing the potential benefits. Accordingly, Calvert looks for companies that are diversifying their energy offerings with renewable energy options and other technologies that enhance efficiency. In this regard, some of the world’s largest utilities—including some that currently operate nuclear power plants—have recognized an opportunity to add value and expand into new markets by developing clean energy sources such as wind energy, solar power, and other “green” technologies.

Calvert Portfolios and Nuclear Power

Calvert has a longstanding policy of not investing in nuclear power companies and currently does not endorse nuclear power as a viable option for addressing the climate change crisis because of its environmental and public safety risks. This policy still holds true for the majority of our portfolios. However, in view of the urgent need to address climate change, Calvert believes it is essential to invest in companies at the forefront of developing renewables and contributing to energy efficiency—and in some cases—these are utilities with legacy nuclear operations. Accordingly, on a very limited basis, some Calvert portfolios may invest in these types of companies, provided they meet high safety and security standards for their existing assets and are not developing new nuclear power plants.

For companies with existing nuclear operations, Calvert first looks at whether its nuclear power role is as a utility, contractor, manufacturer, or construction company. Calvert examines the entire life cycle of nuclear power production—from uranium mining to the disposal of radioactive waste. Each step in the process of developing nuclear power presents significant environmental and safety risks, so we examine the extent of a company’s involvement at every stage. For example, we evaluate include how a company transports and stores its nuclear waste, particularly as these relate to the risks of nuclear weapons proliferation and terrorism.

In applying its “no new nuclear” criteria, Calvert applies a range of in-house research and also draws on the standards established by the International Atomic Energy Agency (IAEA). The IAEA provides an international framework for determining the status of a company’s nuclear involvement, evaluating areas such as plant safety and unplanned outages, waste and transport safety, and nonproliferation safeguards. Looking ahead, Calvert will continue to monitor industry developments closely, recognizing that some power companies are aggressively developing new technologies for waste disposal, transport, and safety.

In the final analysis, the Fukushima disaster has underscored the critical need to carefully evaluate the safety, security, and ultimate viability of nuclear power—and balance it against the environmental and safety risks inherent in oil production, coal mining, and all conventional fuel sources. Looking ahead, it is clear that aggressively developing renewable and alternative energy sources could help solve the world’s energy crisis, while alleviating some of the environmental, economic, and safety risks presented by conventional and nuclear energy sources.


1. World Nuclear Association. World Nuclear News, “Another Drop in Nuclear Generation,” May 5, 2010.

2. International Energy Agency, Key World Energy Statistics 2009.

3. World Nuclear Organization, www.world-nuclear.org/info/inf01.html

See an overview of how Calvert’s sustainable and responsible investment (SRI) criteria are applied to Calvert’s mutual fund offerings »

SRI criteria will vary from fund to fund. Please see a fund's prospectus for details.

Issue Expert: Tom Van Haaren
Issue Expert: Bennett Freeman

Bennett FreemanMr. Freeman leads Calvert's Sustainability Research Department and oversees its company research and analysis as well as its policy and advocacy work.

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