Climate Summit: Greta Thunberg hits global leaders as countries determine green plans

More than 2,000 companies with a market capitalization worth more than $ 27 billion already have or are planning to set an internal carbon price within two years, according to the CDP’s global environmental impact.

Domestic carbon prices – the cost per tonne of carbon dioxide equivalent – can be taken by organizations in terms of capital expenditures or research and development costs.

Prices may be hypothetical, where no money is spent, but the company calculates the additional cost based on the carbon intensity of the investment, with the goal of boosting low-carbon spending. Some companies, including Microsoft, require departments to “pay” an internal fee based on the emissions they generate.

“What you want to do is make another investment decision,” said Nicolette Bartlett, CDP’s director general of climate change. Depending on the price, what it covers, and the importance a company attaches to the calculation, it may or may not have a significant impact.

The rates may have the “biggest impact” as they involve an internal “tax”, he added.

The CDP said the number of companies that expected to take the cost of carbon into their business plans or plan to do so within two years has increased by 80 percent in five years. These include Volvo auto manufacturer, Shell major oil and Next seller and the top 500 companies with 226 FTSE Global All Cap Index market value.

In 2020, companies reported to the CDP that the price of internal carbon was $ 25 per tonne of CO2 equivalent. That’s considerably lower than the current price of quotas negotiated under the European Union Emissions Trading Scheme, which has set a record high of more than $ 40 this year.

But Bartlett said there was too much focus on the price itself, rather than “the impact it has on decision-making.”

“It’s more important than the number of companies that use the strategy around them.” He added that the high price of carbon would not guarantee change.

The CDP found that companies that predicted the regulatory price of carbon were set the price. But it is likely that many companies that will be affected by the regulation are still not appreciating the carbon issue.

Especially some EU companies “underestimate the speed of change that this system is undergoing,” Bartlett said.