Big brands across all industries are now assigning a carbon price to offset the costs and risks of their GHG production: Companies reporting that they price their greenhouse gas (GHG) emissions through CDP (Carbon Disclosure Project) has nearly tripled this year, now 437 from 150 in 2014.
CDP's latest report, Putting a price on risk: Carbon pricing in the corporate world, provides information on carbon prices from the 437 participating companies and their incentives for doing so. Major brands include Allergan, BASF, Campbell's Soup, Colgate-Palmolive, Exxon Mobil, General Electric, Microsoft, Nestlé, Nissan, Stanley Black & Decker, Unilever and Walt Disney Company.
As CDP asserts in the report, the striking increase in the number of companies accounting for carbon indicates that “climate change is now part of mainstream business decision-making and represents a bona-fide line item in the standard budget assumptions of successful companies.”
The number of reporting North American companies doubled, but the biggest jump from last year was from Asian corporations, which increased from 8 to 93 reporting participants. CDP reports that the new carbon market in South Korea and China’s expected carbon trading scheme were influences behind the increase.
CDP also asked whether companies that are not currently using an internal price on carbon anticipate doing so in the next two years. 583 companies said yes, including Yahoo! and Chinese power giant, CLP Holdings Ltd.
“The world's biggest corporations anticipate a future in which their carbon emissions carry a price. The disclosures to CDP detail how and why companies are pricing their own carbon pollution now to help build competitive advantage for the future,” said Lance Pierce, president of CDP North America.
Corporations chose prices ranging from $1 per tonne of CO2 to $357 per tonne as part of their efforts to prepare for a carbon-constrained future. They reported incentives including risk mitigation from current or potential regulation, investments in clean energy purchases or other GHG reduction activities, and prioritizing energy efficiency.
Investors can easily use CDP’s standardized data to compare companies’ environmental risks, their progress over time, and make decisions for their portfolios and index-based investments. Prices are organized by industry sector and companies are listed by geographic region and sector.
This is one of several announcements this week of companies taking responsibility for their climate footprint as part of Climate Week NYC: On Tuesday, the UN launched Climate Neutral Now, an online platform to help measure, reduce, and offset their emissions and get businesses on board, with backers including adidas, Sony, and Microsoft; and a host of new Fortune 500 companies joined RE100, pledging to source 100 percent of their electricity from renewable energy. Since its launch in 2014, 36 major businesses have signed on, including Unilever, Mars, Inc., Nestlé, Philips, Johnson & Johnson, Proctor & Gamble and Steelcase.