What Colgate-Palmolive, Campbell and GM share: carbon pricing

What Colgate-Palmolive, Campbell and GM share: carbon pricing

Close to 1,000 global companies account for emissions internally or will do so within two years.

Most countries aren’t convinced about the need for carbon pricing as a lever for addressing emissions.

Yet, the number of multinational business leaders taking matters into their own hands tripled over the past year to a record 437 companies, according to an analysis by non-profit CDP.

An even larger number of companies, 583 in total, plan to embrace carbon pricing schemes within two years.

CDP based its report, which it compiles annually, on environmental disclosures it gathers on behalf of investors. Carbon prices generally are expressed as a cost per each tonne of carbon dioxide emissions.

In this year’s report, they range from as high as $357 per tonne (the price used by Japanese engine manufacturer NGK Spark Plugs) to about $1 (the number used by Brazilian utility CEMIG).

Of course that’s just the range among the organizations that actually share their math. Many companies, including U.S. food giants Campbell Soup, Dean and Hormel, or consumer goods company Colgate-Palmolive don’t divulge this data publicly.

Campbell doesn’t actually use a fixed price. Rather, it reduces the anticipated return on investment from energy conservation projects by 15 percent to 20 percent, according to the report.Google and Microsoft are more transparent, using numbers of $14 and $4.40, respectively.

“The world’s biggest companies anticipate a future in which their carbon emissions carry a price,” said Lance Pierce, president for CDP America, in a statement. “The disclosures to CDP detail how and why companies are pricing their own carbon pollution now to help build competitive advantage for the future.”

The rationale for U.S. industrial company Owens Corning’s policy is pretty indicative of that sentiment. It notes:

“For use in internal decision-making and risk analysis, we place an economic value on carbon emissions to help frame the challenges and opportunities in monetary, more broadly understood terms than simply tons of emissions. … Quantifying these added costs, in the event that a price is put on carbon in regions around the world where a current price or trading scheme is not in place, provides additional insight into our business decisions.

Next year will bring even more supporters

The uptick was especially strong in Asia, where standard bearers include South Korea’s LG Electronics, and Japanese technology giants NEC and Hitachi. There were just eight companies in favor of carbon pricing in CDP’s 2014 report, compared with 93 in the latest update.

CDP attributes this, in part, to China’s intensifying commitment to a low-carbon economy. Its goal is to reduce the carbon intensity of its gross domestic product (GDP) by 60 percent over time, peaking emissions by 2030 or sooner. Japan is another nation that has embraced the idea of carbon pricing.

Lawmakers in the United States are still struggling to make the economic case, although states like California have introduced cap-and-trade programs.

One of the more remarkable findings shared by CDP is the sheer volume of companies that anticipate introducing carbon pricing policies within the next two years. Here are big names you can add to your watch list: Alcoa, American Express, Autodesk, Baxter International, Bristol-Myers Squibb, Coca-Cola, General Mills, Mars, Monsanto, Wal-Mart Stores, and Yahoo.

CDP didn’t previously track this number.