Asia’s largest electric utilities are already absorbing US$6.3 billion annually in damages from climate hazards, a toll that could rise by one-third by 2050 without swift and coordinated action.

This warning comes from new research by the Asia Investor Group on Climate Change ( AIGCC ), leveraging data from 2,422 power assets across 11 major regional utilities, with analysis from the MSCI Institute.

The report brings into focus a critical vulnerability in Asia’s infrastructure, its reliance on coal-fired generation. These assets are especially exposed due to their dependence on water for cooling, making them susceptible to water scarcity and low river flows. In addition, their concentration in coastal areas increases the risk from storm surges and flooding.

The systemic risk isn’t limited to utilities’ balance sheets. Disruptions to electricity supply cascade into broader economic harm, affecting everything from industrial production to public health and household resilience.

Rising ambient temperatures and extreme rainfall events only add to the strain, reducing operational efficiency and exposing rigid infrastructure to shocks.

Yet despite the growing threat, the report exposes a troubling gap in preparation. Of the eight utilities that disclosed forward-looking adaptation strategies, none provided capital expenditure or operating budget allocations, and only two offered measurable plans.

“This analysis makes it clear that climate hazards are not a distant threat; they’re already imposing billions in costs on Asia’s energy companies and their customers throughout their markets,” says AIGCC chief executive Rebecca Mikula-Wright.

Integrating resilience into investment

While there is no shortage of potential risks, the tools to respond are within reach. Utilities, policymakers, and investors each have levers to reduce exposure and safeguard energy systems.

For utilities, the priority is to assess physical climate risks at the asset level, quantifying financial impacts under various scenarios, disclosing findings transparently, and integrating adaptation into governance and transition plans. Boards must align capital allocation with resilience outcomes.

Utilities must also coordinate with governments to set consistent protection standards, map interdependencies, and avoid maladaptation. Fragmented responses will only amplify systemic risk.

Policymakers, in turn, should embed utility sector risks into national adaptation plans and enforce asset-level disclosures aligned with international standards. Regional coordination, via Asean, for example, can drive joint planning and unlock cross-border blended finance.

Institutional investors also have a critical role to play. They can exert pressure for more transparent disclosures and climate risk governance, engage on adaptation strategies, and assess whether resilience spending matches exposure. AIGCC believes tailored engagements based on hazard profiles are critical.

“Every stakeholder, from utilities and policymakers to investors, has the ability and responsibility to act now. By embedding resilience into planning and investment decisions, we can protect critical infrastructure, safeguard communities, and ensure reliable energy for decades to come,” Mikula-Wright says.