All responsible companies are targeting reductions in greenhouse gas emissions and many see carbon pricing as the best way to achieve this. Most companies are reducing their emissions and those reductions are increasingly significant. As part of these efforts carbon pricing has the support of a growing number of corporations.
GM has indicated that they will reduce the carbon intensity of their manufacturing plants by 20 percent, UPS has stated that it will reduce their greenhouse gas emissions by 20 percent and Wells Fargo is looking to achieve a 35 percent emissions reduction. While each company must assess its own capabilities, it is important that emissions reductions strive to be large enough to meaningfully address a science based understanding of what is required to tackle climate change.
Talking about their emissions reduction efforts, Mary Wenzel, head of environmental affairs at Wells Fargo, said:
“The target was developed by modeling what was relevant and possible in our current business; conversations with multiple internal and external groups, including Wells Fargo business leaders and team members, NGOs, and customers; an understanding of the scientific consensus of required GHG reductions; and our desire to demonstrate leadership in managing our own environmental footprint.”
According to an analysis of 100 global companies almost half (49) are on track to reduce carbon emissions “in line with scientific targets to avert dangerous climate change”.
Last year Ceres claimed that the appetite for a carbon tax is growing even in the US. A number of companies have signed the Climate Declaration which characterizes climate change as both a threat and an opportunity. A subdivision of Ceres known as BICEP is calling for a carbon tax and a number of mainstream companies have signed on including General Mills, Kellogg’s and Nestle.
Last September more than 350 institutional investors called for a carbon tax (this includes BlackRock, CalPERS, PensionDanmark, Deutsche, South African GEPF, Australian CFSGAM, Cathay Financial Holdings and others) Together these investors represent over $24 trillion in assets. They are also asking that plans be developed to phase out subsidies for fossil fuels.
Major companies across many industries have indicated their support for carbon pricing, including GE, Fujitsu, IKEA, Alstom, Unilever, Swiss Re, Skanska and many others. Companies like American Electric Power, Xcel Energy and Pacific Hydro are among the utilities that are already pricing carbon as part of core business strategy.
A CDP report shows how Dow Chemical Company, Goldman Sachs, Microsoft and ExxonMobil are among the 29 major public companies in the US are incorporating an internal carbon price into their business decisions. The same report indicates that there are 150 companies using internal carbon pricing globally . According to the report there is a global corporate consensus that carbon will be priced. This puts large public companies ahead of their governments in planning for climate change risks, costs and opportunities.
Alstom and Bayer and Canadian Tire Corporation will soon be pricing carbon on a mandatory basis. A total of 638 companies see carbon disclosure regulations as an opportunity for their businesses. Many major US companies are participating in the European Union Emissions Trading Scheme and as such are already operationalizing a carbon price on a mandatory basis. A total of 212 companies said that they have adopted a corporate position that supports carbon pricing and they are directly engaging with policymakers on legislation. Many companies use carbon pricing to guide their internal and external capital deployment to maximize return on investment.
More than 1,000 companies, and 70 countries have signed the World Bank Price on Carbon. The World Bank is also considering guaranteeing sales of greenhouse gas credits in support of the United Nations carbon markets.
Even the president and CEO of Suncor Energy Inc., Canada’s largest oil company recently said that he wants to see a carbon tax.
“We think climate change is happening,” Steve Williams said at a May, 2015 Ecofiscal Commission event in Calgary. “We think a broad-based carbon price is the right answer.”
Cenovus is also one of the energy-sector companies in favor of a carbon tax. “We support a price on carbon and we’ve been saying that as a firm since we launched over five years ago,” Judy Fairburn, executive advisor at Cenovus, told the Ecofiscal event.
To help provide guidance on carbon pricing in business the UN has published a useful document (click here to access it).
The Climate Trust predicts that we will see increased focus on carbon markets by 2020, the year
that the hoped for global climate agreement comes into effect.