'Unregulated electric, gas utilities have varied carbon transition risk'

The report is based on CTAs of 51 rated companies in Asia, Latin America, North America, and the Middle East.

According to the report, while the median overall CTA score was CT-5, indicating strong positioning for carbon transition, 11 utilities received overall scores indicating advanced positioning and 22 received overall scores for moderate or poor positioning.

Moody's CTA scores for the 51 companies ranged from CT-1 to CT-9 on a 10-point scale, where CT-1 shows the most advanced positioning and CT-10 the poorest.

"The carbon transition risk varies widely by location and fuel mix. Eleven companies received a generation score consistent with advanced positioning because they already mostly use non-fossil fuels," Moody's analyst Ana Rayes said.

"Utilities in emerging markets are less exposed to carbon transition than counterparts in advanced economies. On average, the 51 companies we reviewed had stronger generation CTA scores than the US and European power companies that we have scored previously."

Moody's also calculated separate CTA scores for the non-generation activities of 28 of the 51 companies that have a combination of generation, distribution, transmission or other related operations, all of which have varying levels of exposure to carbon transition risk. The median overall CTA score, which reflects the aggregate transition risk of both generation and non-generation operations, was the same as the median generation-only CTA because more than half of the cohort derive most of their earnings from power generation.

Four components underpin Moody's forward-looking CTA scores current business profile; policy, market and technology risk; medium-term management response; and long-term resilience.

This report follows Moody's CTA scores for a range of corporate issuers in various sectors.