Investors set to boost engagement with Asian electric utilities on climate change

Investors set to boost engagement with Asian electric utilities on climate change
December 1, 2020 Madeleine Hill

A new report by the Asia Investor Group on Climate Change (AIGCC) calls on electric utilities to ramp up efforts to mainstream climate risk response into their business strategies and existing operations to be better prepared for the transition to a net-zero emissions economy. 

The AIGCC report finds that electric utilities across the region are of particular concern to investors due to their emissions-intensive nature. Asian electric utilities alone contribute almost a quarter of global greenhouse gas emissions, have a young asset age profile and represent more than USD200 billion of market capitalisation on regional stock indices.

The report – Investor Expectations of Asian Electric Utilities Companies – Crossover to Net Zero – argues that Asian electric utilities will play a critical role in ensuring that countries maintain their national competitiveness as global investors and supply chains increasingly look to invest and source from low carbon economies. 

Included in the report is a comprehensive practice guide developed by AIGCC, which will help underpin a new investor engagement program with Asian electric utilities on climate change. This new program will run in parallel to Climate Action 100+, which is already engaging with a number of major Asian electric utilities.

AIGCC Executive Director, Rebecca Mikula-Wright, said investors increasingly recognise that climate change will impact their holdings, portfolios and asset values, and that mitigating this risk is critical to protecting the sustainable returns for the beneficiaries on whose behalf they invest.

“Investor engagement with companies on climate change has become a dominant theme in global capital markets and has already helped create a marked shift in corporate attitudes towards better integrating climate risk response.

“Investors are concerned some companies are not sufficiently prepared for the transition to a net-zero emissions economy. 

“Asian electric utilities will be critical to the transition to net-zero emissions being targeted by many of the major Asian economies. The electricity generation sector’s integration with others such as heavy industry, transport and real estate makes it essential to achieving decarbonisation.

“Business strategies and capital allocations made by Asian electric utilities today will determine their future sustainability and profitability in a carbon-constrained world.”

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Read the full media release (Traditional Chinese)

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Read the report (English)

Read the report (Simplified Chinese)

Read the report (Traditional Chinese)

Read the report (Japanese)

Read the report (Korean)

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