Operating critical infrastructure to deliver clean, reliable and affordable energy comes with inherent risk. As interest around climate change and the company’s clean energy transition continues to grow, Duke Energy is leveraging its enterprisewide risk management philosophy to help inform and advance our long-term vision.
Duke Energy’s strong risk management culture is underpinned by the company’s ability to plan beyond the next year – or even five years. The company is looking into the next decade to identify, evaluate and mitigate risks associated with its net-zero carbon emissions target, including physical infrastructure, the transition to cleaner energy sources, federal and state energy policies and the development of new technologies.
To manage these risks effectively, the company includes climate change considerations into its annual Enterprise Risk Management (ERM) process. The ERM process is used to identify potential risks to corporate profitability and value and provides a framework to respond in an integrated and informed fashion.
The responsibility for managing climate risk is cascaded throughout the organization. Business unit leaders across the company analyze risks and determine how the company can best address near-term and long-term risks. The Board of Directors is also integral in reviewing the annual enterprise risk assessment and routinely discusses climate risk governance.
Duke Energy incorporates climate, technology and economic risks into our long-term planning through integrated resource plans for each of our regulated electric utility companies. These 10-, 15- and 20-year plans (depending on the state) provide options for how Duke Energy can continue to serve customers and communities in the future.
The filings consider forecasts of potential future climate policies, future electricity demand, fuel prices, transmission improvements, new generating capacity, integration of renewables, energy storage, energy efficiency and demand response initiatives. As we prepare these proposals, the company incorporates feedback from stakeholders and clearly considers risks to reach climate-focused goals at the state, federal and company level.