One third of companies considering the cost of carbon

2,000 of the world’s biggest companies are factoring the cost of carbon into their business plans, according to research by non-profit organisation CDP. 

Of nearly 6,000 companies surveyed on carbon pricing in 2020, more than 2,000 disclosed that they are currently using or plan to implement carbon pricing in the next two years.

The analysis found that the median internal carbon price disclosed by companies in 2020 was US$25 per metric ton of CO2e, with companies in Asia and Europe implementing the highest average price of US$28.

11 out f the 13 sectors covered – including fossil fuels, manufacturing and financial services – saw an increase in the share of companies using or planning for an internal carbon price between 2019 – 2020.

This is a notable shift from 2018 – 2019, where only 4 out of 13 saw an increase.

The data also revealed a correlation between companies setting an internal carbon price and taking other actions to reduce emissions.

Nicolette Bartlett, global director of climate change at CDP,  said: ‘Our latest data shows a clear correlation between companies putting a price on carbon and those taking other strategic decisions to combat climate change. With the urgency of the climate crisis requiring a systemic shift in corporate behaviour, it is encouraging to see such an increase in the number of global companies taking positive steps forward, and pricing carbon risks into their businesses.

‘However, with more carbon pricing systems emerging every year, prices rocketing and an increase in regulation which places an effective price on carbon emissions, companies need to start anticipating these inevitable policy shifts, taking action in their value chains, and disclosing these risks to their shareholders.

‘Governments too should take note of this trend and be confident in upping their ambition on carbon regulation as a key lever to incentivise corporate and societal progress in reducing global emissions.’

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