Surge in carbon price disclosure shows climate change heading mainstream

Corporations behind everyday brands of toothpaste, soup, light-bulbs, gasoline, cars and computers are assigning a price to their carbon emissions to offset the costs and risks of their greenhouse gas production, according to new disclosures provided to CDP, the global non-profit which gathers environmental data on behalf of investors.

Major multinationals including Allergan, Campbell’s Soup, Colgate-Palmolive, Stanley Black & Decker, Exxon Mobil, General Electric, Nestlé, Microsoft, and Nissan are among the 437 companies included in CDP’s new report, which illustrates the mainstreaming of climate change concerns as a line item in public companies’ budgeting and strategic planning.

CDP saw a tripling in the number of companies reporting that they price their greenhouse gas (GHG) emissions over last year (437 up from 150 in 2014), highlighting the inexorable rise of big name brands across all industries putting a price on their climate risk.

An additional 583 companies state they plan to use an internal carbon price within the next two years, including Yahoo! and China’s power giant, CLP Holdings Ltd. Together, over 1,000 companies are now disclosing to their key stakeholders that they currently price their carbon emissions – or intend to in the next two years – to try to meet their climate change risks.

In Asia, over ten times as many corporations disclosed they put an internal price on their carbon emissions this year - 93 in total up from 8 in 2014 – pointing to the influence of China’s expected carbon trading scheme and the new carbon market in South Korea. Among them are LG in TV and telecom, IT giant NEC, and Hitachi.

An internal price on carbon - where a price is applied to each tonne of CO2 - is used as a planning tool by businesses across all industries and geographies, with the majority in Europe and strong representation from North America.

“Contrary to conventional belief, companies would welcome regulatory certainty and are planning for mandatory emissions limits in the future,” commented Paula DiPerna, special advisor to CDP and a carbon-pricing expert. “CDP’s ongoing tracking of carbon pricing by companies is indispensible to illuminating how companies act.”

CDP’s standardized data enables investors to compare one company to another on environmental risk, to measure a company’s progress over time, and to include or exclude companies from sophisticated portfolio and index-based investments.