Write to Pension Funds

EDF has applied to build two EPR reactors on the fragile Suffolk Heritage Coast; Sizewell C. In December 2020 the UK Government announced it would open negotiations with EDF, and that it was considering:

  1. Taking a direct stake in the project (size unspecified) AND
  2. Continuing to explore the controversial Regulated Asset Base (RAB) model. This is essentially a nuclear tax on the UK public’s energy bills that would give a guaranteed, immediate return to investors, and potentially push the risk of overruns and overspends onto consumers. EDF considers this reduced risk will attract new investors, especially UK pension funds and is aiming for the plant to be majority-owned by UK investors. The government must introduce legislation before RAB could be used for new nuclear.

The story so far….

In January 2021 at a nuclear conference Dr Tim Stone Chair of the Nuclear Industry Association named Aviva and Legal & General as being interested in investing in new nuclear projects, but letters from customers/clients have helped us to establish that these companies are much more cautious than Tim Stone implied. Legal & General has in fact ruled itself out.

Aviva said: As you are probably aware, the UK government is looking at expanding nuclear capacity as part of its efforts to achieve net zero emissions by 2050. We consider the potential ESG impact in all of our investment decisions. However, the ESG impact of nuclear is far from clear at this time and we are not actively involved in any such investments. 

Press coverage: Sunday Telegraph on 7 February Aviva fears environmental fallout if it backs new nuclear reactors.

Legal & General said: While we think that nuclear power may play a part in the global energy transition, each specific project / scheme is considered on its own merit; from an environmental and economic perspective and also taking careful account of the available and viable alternatives. Indeed, in the case of nuclear power, cost and nuclear waste disposal considerations must be fully addressed against the benefits. In a case like Sizewell C, we would consider the merits of the investment only when the final investor case is presented to the investor market. We have been unable to find anything in relation to this expression of interest. This is being followed up with the Nuclear Association.

L&G investors customer services subsequently wrote to a pension holder: “I have had it confirmed that Legal and General will not be investing in the Sizewell C nuclear power plant. The Nuclear Industrial Association merely suggested that this form of investment might be suited to us and Aviva.”

This position was confirmed at the Legal & General AGM in May 2021.

Press coverage: Sunday Telegraph on 20 February: Sizewell C proves to be a turn-off for City giant Legal & General. Note that in 2016 L&G’s CEO, Nigel Wilson, also called on the then PM to cancel Hinkley C, Heathrow and HS2 in favour of renewables, Gatwick and northern railway links.

Prudential: At their AGM in May 2021, Prudential said it was “extremely unlikely Sizewell C would be the sort of project we would directly invest in.”

At a recent World Nuclear Association webinar, Stephen Vaughan of EDF’s financial advisers Rothschild & C said: “[Funds] are worried about what their ultimate investors think, what their pensioners think (if it’s a pension fund) or their savers. They’re worried about what their employees and their customers think. It’s against that backdrop that they need to see a clear consensus. These are going to be big, high-profile investments that investors do not want to be controversial.”

In June 2021 EDF CEO Simone Rossi said “I am led to believe it is quite possible to have this legislation included in the second session of parliament this coming autumn. I would say this is an essential prerequisite for the project to be enabled because the project needs to be timely delivered and this legislation is now really, really essential. Asked if his company had a Plan B in the event the government did not advance with the legislation, he said: “We do not really. I have to say that would be for the UK government to consider.”

In July 2021 the Financial Times reported that the legislation was indeed expected in the autumn.

How You Can Help

If you have a pension or hold shares in a pension company please write to your primary contact or customer services, giving your policy number/shareholding as proof you are their customer, and ask for the company’s assurance that they have no intention of investing in the controversial nuclear project Sizewell C. You do not need to  justify your question at length but here are some suggestions:

  • Point to the press attention given to Aviva and Legal & General and urge them to follow their example; surely they do not wish to court controversy? 
  • State that you believe it will be incompatible with what you hope are the company’s very robust ESG (Environmental, Social and Governance) policies.
    • Environmental – nuclear energy is not green, as the radioactive waste does significant harm to the environment. Sizewell C is surrounded by protected landscapes and internationally important wildlife habitats, including RSPB Minsmere. Also, the Chancellor Rishi Sunak explicitly excluded nuclear from his Green Financing Framework launched on 1 July.
    • Social – the nuclear tax during construction could contribute to fuel poverty, and even consumers that have chosen 100% renewable energy may be forced to pay it.
    • Governance – no one knows who will own Sizewell C as EDF has said they must get it off their balance sheet. [1] The continued involvement of China General Nuclear in the project is mired in controversy.
  • At a cost of £20 billion (at least), Sizewell C is very expensive and would suck vital investment away from the development of green transformative technologies, such as green hydrogen.
  • Sizewell C is too slow to contribute to net zero. It will take up to 12 years to build, and EDF has admitted the carbon footprint of construction has increased to 6.2 million tonnes of CO2 which will take 6 years to offset, meaning Sizewell C cannot positively contribute to net zero until at least 2040.
  • More suggestions are available from our one page briefing “Why Stop Sizewell C and of course feel free to add your own reasons for opposing the project.

Please let us know of any replies you receive, info@stopsizewellc.org

If you have not already signed the SumOfUs petition opposing the RAB, please join over 50,000 people by doing so here: https://actions.sumofus.org/a/no-energy-bill-surcharge-for-new-nuclear

  1. At the Westminster Energy and Environment Forum 10 October 2020, Humphrey Cadoux Hudson, Managing Director, Nuclear Development EDF Energy said: “We have to get this asset [Sizewell C] off our balance sheet” https://www.youtube.com/watch?v=S74CNa5MVVM