By Jason Chau and Fabiana Negrin Ochoa

Asia's largest electric utilities need to step up their emissions-reduction efforts, particularly as the current conflict in the Middle East underscores the need to think about long-term resilience planning, an investor group says.

"The conflict poses supply shocks, impacting energy prices and it's an active issue that utility companies need to consider both in the short term as a response measure," said a spokesperson for the Asia Investor Group on Climate Change, a network of institutional investors representing $36 trillion in assets under management.

Asia's powerhouses have made notable progress in decarbonization in recent years, but more needs to be done, the group said in a report on Thursday.

"Investors need clear, actionable transition plans from companies that demonstrate how their ambitions will be executed," said Rebecca Mikula-Wright, chief executive of AIGCC.

In an assessment of Asian electric utilities' progress on curbing emissions, the group found that most have a decarbonization strategy and have started to disclose how they are moving away from fossil fuels, but none have detailed capital or operational expenditure dedicated to climate adaptation.

Disclosures are also still inconsistent, and investors want stronger evidence that capital allocation is shifting significantly away from high-emitting assets and aligning with climate targets, the group said.

The progress update is part of AIGCC's Asian Utilities Engagement Program, which has 23 investors with a collective $13 trillion in assets under management. These investors engage with eight key power companies on climate change, including China Resources Power, Chubu Electric, JERA, Tenaga Nasional, and Huaneng Power International.

If climate risk is not properly accounted for or managed, utilities stand to lose billions, AIGCC warned.

Climate hazards already cause material costs of around $6.3 billion annually in asset damage and lost revenue, it said. That figure is expected to rise by 33%, exceeding $8.4 billion by 2050 under a scenario of medium-high global warming.

More broadly, the economic cost of climate inaction under current policies would be quite severe for most economies in Asia, the AIGCC spokesperson said.

Asia's power sector is central to global actions against climate change, as the region accounts for about 80% of the world's operational power-generation capacity. The sector itself is responsible for 54% of the region's total carbon emissions.

Write to Jason Chau at jason.chau@wsj.com and Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

March 04, 2026 21:06 ET (02:06 GMT)

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