A decade of transition in the electric utility sector has made it a difficult place for investors, who face uncertainty around regulations, technological advances, and new entrants. We developed this guidance note to help stakeholders in the sector navigate this shifting terrain. Companies and investors must work together to understand the implications of the transition to a clean power system, which must occur by 2050. Failure to do so threatens shareholder value and the possibility of meaningful emissions reductions.
The guidance focuses on eight key questions for discussion between investors and companies, covering emissions goals; the development of new business models that take account of new opportunities, new technologies and new entrants; the capital expenditure required for the transition; and the internal changes to personnel and incentives needed to facilitate the transition.
It also provides contextual information on all these topics, including relevant recommendations of the Task Force on Climate Related Financial Disclosure.