A report by the not-for-profit group Corporate Watch Australia claims that “many so-called ethical funds are not necessarily ethical in the area of uranium mining”.

“Of the 18 ethical investment funds studied, just four have policies that absolutely screen out investment in uranium and nuclear power, five have no policy, seven have policies that allow for some level of investment and one is proudly pro-nuclear,” Corporate Watch says. The companies offering funds that screen out uranium are Australian Ethical, CVC Sustainable Investments, Hunter Hall Investment Management and Perpetual Investments.

The report was commissioned by environmental group Friends of the Earth, which has been campaigning against uranium mining and nuclear power for 35 years. “We consider investment in the nuclear power chain to be unethical because of the industry's disproportionate, adverse impacts on indigenous people, the repeatedly demonstrated connection between the 'peaceful' nuclear chain and nuclear weapons; the legacy of high-level nuclear waste and the existence of a plethora of more benign energy production and energy-saving methods to reduce greenhouse emissions,” Friends of the Earth says.

Corporate Watch’s findings are consistent with our September 2007 article, which found that despite uranium’s controversies most ‘ethical’ and ‘sustainable’ funds invest in big uranium mining companies such as BHP and Rio Tinto. Funds justify this on the basis that the uranium is used for nuclear energy, not weapons, or that the companies chosen get less than 5% or 10% of their (enormous) overall revenue from uranium, or that they have good environmental, social or corporate governance performance.

‘Sustainable’ and ethical’ funds that invest in uranium often permit investments in industries like tobacco and gambling too. Interpretations of what’s sustainable or ethical differ; the catch-all term ‘responsible’ is now favoured by the industry’s representative body. The industry seems to view the negative screening approach to ethical investing (where problem industries are excluded from funds) as outdated and less relevant than the more mainstream ‘responsible’ and ‘sustainability’ investing, which researches and invests in companies that perform well on environmental, social, ethical and corporate governance measures. But Corporate Watch calls this a crisis of definition. It quotes the company Australian Ethical as saying “a lot of companies claiming to invest ‘sustainably’ are actually talking about financial, rather than social or ecological sustainability”.

For information about where a range of sustainable and ethical funds invest, where to find their all-important investment methodologies, as well as their investment performance, go to our ethical investing report and the  Responsible Investment Association website.