A new report released today by CDP, an environmental organization that gathers information on behalf of investors, provides powerful evidence that:

  • There is a global corporate consensus that carbon will be priced;
  • Businesses are preparing for a robust, internationally-linked carbon market; and
  • These companies would welcome regulatory certainty, nationally and internationally, with respect to climate change policy and carbon pricing.

Based on data gathered by CDP from corporations in response to its annual request for information on the business implications of climate change, the report finds that large public companies are already advanced in their use of carbon pricing and are ahead of their governments in planning for climate change risks, costs and opportunities.

Highlights:

  • Despite no national regulatory price on carbon 29 major public companies in the US, including Dow Chemical Company, Goldman Sachs and ExxonMobil are beginning to or are continuing to incorporate an internal carbon price into their business decisions. The prices disclosed, ranging from $6-$80 a tonne, are also used as a tool to drive investments in GHG emissions reductions;
  • Major companies, such as Alstom and Bayer and Canadian Tire Corporation are keeping close watch on emerging Chinese emissions trading systems that will soon be pricing carbon on a mandatory basis;
  • 638 companies disclose that regulations related to carbon pricing (cap and trade & carbon taxes) present an opportunity for their businesses;
  • Many major US companies are participating in the EU ETS and are thus already operationalizing a carbon price on a mandatory basis.
  • 212 companies disclose they are directly engaging with policymakers on carbon pricing legislation (cap and trade & carbon taxes) and state that their corporate position is in support of these measures; and
  • Many companies use carbon pricing to guide their internal and external capital deployment to maximize return on investment.

Other insights:

  • Disclosure excerpts offer concise and topical insights on corporate attitudes toward emerging emissions cap-and-trade mechanisms and carbon taxes.
  • Data demonstrating that European companies and others covered by the European Union Emissions Trading Scheme (EUETS) such as Lafarge and Rockwool International want stabilization and improvement of this system, which puts a price on carbon on a mandatory basis, to help protect long-term investments and improve profitability.
  • By contrast, some companies in developing countries, especially heavy emitters, such as Arcelor Mital South Africa, ÇİMSA ÇİMENTO SANAYİ VE TİCARET A.Ş. and PPC Ltd. continue to feel competitively disadvantaged by carbon pricing.

The report will be available at: https://www.cdp.net/CDPResults/global-price-on-carbon-report-2014.pdf