Nuclear Power Finds Some Acceptance Within the SRI Community

Milton Moskowitz

I was 18 when two atom bombs were dropped on Japan, and I remember feeling relieved because it meant that we probably would not need to sacrifice thousands of soldiers’ lives in a frontal invasion of the Japanese mainland. There were few dissenters to this action, which did accomplish its mission. Seeing the destruction wrought in Hiroshima and Nagasaki, the Japanese government surrendered, ending World War II.

It’s eerie that 66 years later nuclear energy is again causing havoc in Japan, although this time it was self-imposed. The combination of a 9.0 earthquake and subsequent tsunami crippled the Fukushima Daiichi nuclear plant operated by Tokyo Electric Power (TEPCO). It’s a disaster predicted 32 years ago in the movie, The China Syndrome, where utility executives are portrayed as obtuse deniers of any dangers associated with nuclear energy operations. Tokyo Electric Power is the world’s largest privately owned electricity company, and it has been cast in the same light as the executives in that movie, charged with ignoring previous warnings about design flaws. The Economist, in its April 2 issue, cited this appraisal of TEPCO by the well known Japanese management consultant, Kenichi Ohmae: “This company is really rotten to the core.” TEPCO shares on the Tokyo Stock Exchange have slid 83 percent since March 11, the day the earthquake hit.

It’s interesting that the first warnings about the hazards of nuclear energy came from the scientists whose research paved the way for the atomic bomb, among them Hans Bethe, Leo Szilard, Enrico Fermi, J. Robert Oppenheimer. They founded The Bulletin of Atomic Scientists to express their concerns. Oppenheimer once said: “When you see something that is technically sweet, you go ahead and do it and you argue about what to do after you have had your technical success.” And in 1946 Albert Einstein said: “The unleashed power of the atom bomb has changed everything save our modes of thinking, and thus we drift toward unparalleled catastrophe.”

Early investment advisors using social screens took their cue from this group, establishing nuclear power as a no-no for investment along with tobacco and weapons production. General Electric, Westinghouse, Babcock and Wilcox and Emerson Electric were thus rendered ineligible for Social Responsible Investments (SRI). No new nuclear plants have been ordered in the United States since 1978.

SRI’s position on nuclear power began to soften with the advent of climate change and sustainability as important social issues. The argument here is that we need to reduce our carbon footprint to curb the warming of the globe – and in that struggle nuclear power can play a role. Compared to coal, it is clean energy, provided it doesn’t implode. One of the major converts to nuclear power was Stewart Brand, founder of the Whole Earth Catalog (in 1972) and someone who had a long association with environmentally-conscious groups. He changed his mind about nuclear energy in 2004 and has since debated Amory Lovins on this subject. Here is Brand’s view:

Coal’s waste stream of carbon dioxide is turning the Earth into a solar cooker. Nuclear’s waste stream is tiny by comparison, and it’s easily contained and monitored locally. Furthermore, with fourth generation reactors, the spent fuel can be reused.

Also pro-nuclear: the Obama administration.

These ideas have had an impact in the world of social investing. No advisor that I know has added General Electric to its portfolio but at least two leading mutual fund operators – Calvert and Pax World – have relaxed their total ban on companies with nuclear involvement. Bennett Freeman, Calvert’s Senior Vice President of Sustainability & Policy Research, explained the firm’s position:

In 2007 we decided to allow for the first time investment in companies that may have legacy nuclear plants, but only in certain funds. We do not invest in companies that are developing new nuclear capabilities. We made the change for several new funds, not as any kind of endorsement of nuclear power, but because we felt it was important to have a full spectrum of energy options. If you’re a utility like Florida Power & Light, which is generating 40 percent of the wind capacity in the United Sates, we want to acknowledge that affirmatively. We don’t want to penalize you because at the same time you’re operating a few legacy plants from the ’60s and ’70s.

That’s quite a different position from the one held by Physicians for Social Responsibility, a longtime campaigner against use of nuclear power. After the Fukushima plant blew up, the group issued a broadside which said: “Nuclear power is uneconomical. Nuclear power is polluting. Nuclear power is a health threat.”

Nothing equivocal about that statement.