Change needed in the electric utility industry to curb emissions

Three smoke stacks at a power plant with billowing smoke in northern ArizonaGreenhouse gas emissions are a growing problem, but Arizona State University sustainability scientist Elisabeth Graffy believes that the electric utility industry can be a force for change. Graffy recently co-wrote an article, “Corporate Finance and Sustainability: The Case of the Electric Utility Industry,” about this topic in the Journal of Applied Corporate Finance. The electric utility sector “accounts for about half of all climate emissions and is the foundation of all sustainable energy futures that generally get discussed,” said Graffy, who leads several initiatives at the Julie Ann Wrigley Global Institute of Sustainability, including the LightWorks program’s Energy and Society group. In the article, Graffy and three analysts discuss how the industry can transform to meet sustainability goals — no small feat. “Utilities could be playing a more major role in shifting systems, but they need policy direction to do so,” Graffy said. A major transition would also require massive financial investments. “Sustainability and finance conversations don't tend to mix, so we set out to mix them [in this article].” Graffy and the analysts argue that well‐established corporate finance principles can guide more effective policies that would help the sector rapidly evolve.