CDP announced today that 29 major publicly traded companies based in or operating in the U.S. disclosed an internal price on carbon pollution to CDP (formerly known as the Carbon Disclosure Project) in 2013, detailing both the risk and potential business opportunity for early action by their companies. Prices range from $6-60 dollars, and exist at companies spanning all sectors of the economy, including energy, utilities, airlines, technology and the financial industry. Twenty-seven of the companies are listed in the S&P 500, while the other two (BP and Royal Dutch Shell) are foreign-based.
“Many companies across the U.S. have come to recognize that there is a price associated with the carbon they emit and an economic opportunity in factoring a carbon price into their business model,” said Tom Carnac, President of CDP North America. “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.”
Internal carbon pricing has become a key strategic element and a standard operating practice for many businesses. They recognize that the effects of climate change, including devastating extreme weather events, have an impact on their bottom line and should be included in any risk assessment and long-term business planning.
Internal carbon prices used range from $6-60 per metric ton, according to the report. In their 2013 CDP filings, the Walt Disney Company notes a price of $10-20, with Google pricing it at $14, Microsoft $6-7 and Xcel Energy $20. Other companies mentioned in the report include GE, Walmart Stores Inc ($18), Delta Airlines and PG&E Corporation.
“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,” Walmart wrote in its CDP disclosure. Similar statements were made by each company in their disclosure, including Wells Fargo Company:
“The scope of our risk-management procedures with regard to climate change risks and opportunities includes consideration of the impacts of regulation, customer behavior changes and needs, reputational risks and weather risks within the next five years," Wells Fargo wrote.
As the report notes: “Mainstream businesses find the use of carbon pricing to be realistic, prudent and useful. ... No company cited major business disruption as an effect of either achieving GHG reductions or planning for costs of carbon as regulatory regimes evolve.”
While more companies are strategically accounting for the impacts carbon emissions have on their business, apparently risks associated with deforestation are taking longer to sink in: CDP reported earlier this week that the latest data from its forests program reveals that the business community remains largely unaware of the deforestation risks in their supply chains, threatening shareholder value, and that they must do more to engage. This year, CDP says the number of investor signatories requesting corporate information through its forests program more than doubled — 139 listed companies with a market capitalization of more than US$3 trillion, including 52 new businesses, responded to the investor call for transparency and accountability on this issue.