Part of a new industry series: Powering the Future™: Climate Risk Intelligence For The Energy Industry
As climate risks increasingly lead to operational, financial, and systemic disruptions, regulators worldwide are demanding greater transparency and accountability from the energy industry. The regulatory landscape for climate-related disclosures, resilience, and risk management is rapidly changing, reshaping the expectations for utilities, power producers, and energy investors alike.
In the European Union, the Corporate Sustainability Reporting Directive (CSRD) raises the standards by requiring thousands of companies—including U.S.-based firms with EU operations—to report double materiality: how climate impacts the company and how the company impacts the climate. The CSRD also incorporates the European Sustainability Reporting Standards (ESRS) and aligns with TCFD principles, but with a broader scope and legally binding force.
On a global scale, the newly established International Sustainability Standards Board (ISSB) has merged several key reporting initiatives into a single set of sustainability disclosure standards. These standards aim to ensure uniformity across different countries and markets, acting as a worldwide baseline for climate-related financial reporting, especially important for multinational energy companies.
Within the U.S. power sector, federal energy regulators are also taking action. The Federal Energy Regulatory Commission (FERC) plays a key role in maintaining grid reliability and market stability amid increasing climate pressures. FERC has started incorporating climate risk into transmission planning, interconnection procedures, and regional coordination efforts. Alongside this, the North American Electric Reliability Corporation (NERC) is increasingly emphasizing physical risk assessment, resilience standards, and emergency preparedness throughout the bulk power system.
Together, these regulatory forces mark a paradigm shift. Climate risk is no longer optional or just reputational; it is a regulated, reportable, and financially significant factor that requires rigorous, cross-disciplinary intelligence across the energy industry.
Ready to get started? To learn more about how ClimaTwin can help you assess the physical and financial impacts of future weather and climate extremes on your infrastructure assets, capital programs, and investment portfolios, please visit www.climatwin.com today.
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