Major banks yet to match EU with nuclear green label, study finds

None of the world’s 30 major banks have explicitly included nuclear energy in their criteria for issuing green or sustainability-linked bonds, researchers said on Thursday (6 July), despite an EU decision last year to label it as sustainable.

The European Union decided last year to include nuclear power plants in its list of investments that can be labelled and marketed as green. The move aimed to guide investors towards climate-friendly technologies, but split EU countries who disagree on atomic energy’s green credentials.

So far, banks have not followed the EU’s lead in their own green bond rules, according to an analysis by Columbia University’s Center on Global Energy Policy. The study looked at the 30 banks deemed systemically important by the Financial Stability Board.

Of those banks, 17 had explicitly excluded nuclear energy from their green financing frameworks, while 12 had frameworks that were silent on nuclear, and one had no such framework, the researchers said.

The EU’s own green bond standard includes nuclear power. But exclusion from banks’ frameworks could restrict the sector’s access to a fast-growing pool of sustainable capital.

Green bond issuance hit a record high globally in both the first and second quarters of 2023, Refinitiv data showed.

Research co-author Matt Bowen said he was surprised nuclear energy was so often excluded from banks’ green finance guidelines, given its potential contribution to fighting climate change.

Nuclear energy does not produce climate-damaging CO2 emissions in the same way that fossil fuels such as oil and gas do, but it does produce radioactive waste.

Countries including Germany and Austria oppose the energy source and lobbied against the EU’s decision to label it as green, citing concerns including waste disposal, the potential risk of accidents and long delays to recent nuclear projects.

The International Energy Agency has said global nuclear capacity would need to roughly double by 2050, if the world is to achieve net zero emissions by 2050.

EU puts green label for nuclear and gas officially on the table

The European Commission on Wednesday (2 February) proposed including nuclear and gas power in the bloc’s sustainable finance taxonomy, recognising their contribution to the EU’s 2050 climate neutrality goal “subject to clear limits and phase out periods”.

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