CDP: Carbon pricing now standard operating practice in business planning
Google, Walt Disney Company, Walmart and Microsoft are amongst a group of major US companies incorporating 'internal carbon prices' into their business strategies.
Twenty-nine major publicly traded companies based in or operating in the US have disclosed a carbon price to the CDP (formerly Carbon Disclosure Project), detailing both the risk and potential business opportunity for early action by their companies.
The majority of companies covered in the report have established a price for carbon because they expect an eventual regulatory approach in some form to address climate change.
Consequently, companies are using a carbon price as a planning tool to help identify revenue opportunities, risks, and as an incentive to drive maximum energy efficiencies to reduce costs and guide capital investment decisions.
Prices exist at companies spanning all sectors of the economy, including energy, utilities, airlines, technology and the financial industry.
President of CDP North America Tom Carnac said: “Many companies across the US have come to recognise that there is a price associated with the carbon they emit and an economic opportunity in factoring a carbon price into their business model”.
“Companies view the establishment of an internal carbon price as both an evaluation of risk and a business opportunity if they take steps to limit carbon pollution before others do,” added Carnac.
According to the CDP’s report, internal carbon prices used range from $6-60 per metric tonne. In their 2013 CDP filings, the Walt Disney Company notes a price of $10-20, Google $14 and Microsoft Corporation $6-7.
Walmart wrote in its CDP disclosure: “While this additional cost is primarily seen as a risk, Walmart’s early action on emissions reductions represents a competitive advantage over other retailers that have not performed such projects”.
The Walt Disney Company highlighted its ‘Climate Solutions Fund’, which is the name given to its internal carbon pricing program.
“This program essentially places an internal tax on carbon emissions, giving business units an incentive to reduce their carbon emissions. The program also places a known cost on carbon emissions, which allows the business segments to more accurately determine cost effective efficiency projects to undertake,” the company states.
The CDP’s report states that “mainstream businesses find the use of carbon pricing to be realistic, prudent and useful”.
It also found that no company cited major business disruption as an effect of either achieving GHG reductions or planning for costs of carbon as regulatory regimes evolve.
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