The rise of nuclear energy in the global energy, economic, and geopolitical landscape has become an unavoidable topic. As decarbonization goals accelerate the transition toward cleaner and more reliable energy, several key countries are reevaluating their stance on this controversial technology.

Despite a history marked by incidents and legitimate environmental concerns, growing investments suggest a gradual rehabilitation of nuclear power in current energy strategies.

Nuclear energy through the ESG lens: between opportunities and controversies

Nuclear energy embodies a paradox within Europe and the world of sustainable finance. Environmentally, it stands out for its low carbon footprint, effectively contributing to the fight against climate change. However, issues such as the management of radioactive waste, the large amounts of water needed to cool reactors, and the high costs of decommissioning raise questions about its true ecological impact.

Source: Mandarine Gestion, April 2025. Data based on reports from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).

On the social side, nuclear safety remains a major challenge. The Chernobyl (1986) and Fukushima (2011) disasters serve as reminders of the potential consequences of accidents on populations and ecosystems. Furthermore, social acceptance varies across regions, with marked opposition in some European countries.

Finally, regarding governance, transparency and accountability among nuclear actors are crucial to ensure rigorous risk management and sustainable production. Continuous efforts in regulation and innovation are essential to reinforce investor confidence.

Nuclear energy and the green taxonomy: the issue straining France–Germany relations

In Europe, the inclusion of nuclear energy in the European Union’s green taxonomy since 2023 illustrates the complexity of the debate. Some states, like France, defend its strategic role in the energy transition, while others, such as Austria and Germany, contest this classification. The legal battle launched before the Court of Justice of the European Union reflects this divergence, with the German Greens accusing the European Commission of greenwashing by labeling nuclear as a “sustainable solution.”

Meanwhile, Germany’s last three operational nuclear power plants, with a total net capacity of 4055 MW, were permanently shut down on April 15, 2023 — 21 years after the country’s decision to phase out nuclear energy.

In France, under the France 2030 investment plan, the nuclear sector benefits from €1.2 billion in public funding to develop a sovereign and sustainable nuclear industry, accelerating innovation, the emergence of small modular reactors (SMRs), and training for nuclear-related careers.

However, in Berlin (and Rome), after years of heavy dependence on Russian gas supplies, the taboo around nuclear energy is fading. Nothing has been decided yet, but the conflict with Russia could instead benefit another, much more climate-damaging fuel: coal.

Impact on ESG investments: between exclusion and integration

This opposition directly influences the investment strategies of ESG funds, often constrained by national label guidelines. In Austria and Germany, sustainable finance certifications systematically exclude nuclear energy, reducing its attractiveness to private capital. Conversely, other players — notably asset managers — consider nuclear an essential lever of the energy transition, integrating specialized companies into their portfolios.

Among companies in the nuclear sector, we prioritize investment opportunities in GE Vernova (reactors), Spie (maintenance), Veolia Environnement (nuclear waste treatment), and Dassault Systèmes (project design and optimization).

Source: Mandarine Gestion, April 2025. Data compiled from ESG fund financial reports and the European Union sustainable investment databases.

Outlook: toward a general reintegration of nuclear power?

The future of nuclear energy in sustainable finance will depend on several key factors:

Technological innovation, particularly the development of small modular reactors (SMRs), seen as safer and more flexible.
Improved waste treatment, reducing long-term ecological impact.
Stricter safety standards, reassuring investors and the general public.

If these challenges are met, nuclear energy could gradually gain legitimacy within ESG (Environmental, Social, Governance) portfolios and become a cornerstone of the energy transition. Indeed, nuclear energy offers a low-carbon source capable of providing stable and continuous production, essential for offsetting the intermittency of renewable energies such as solar and wind. Investors will need to closely monitor these developments to assess nuclear energy’s role in a sustainable energy future.

Completed on April 25, 2025

© Photo : Freepik / jplenio1

Nuclear energy and green finance: bone of contention or possible marriage?

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