Press review
ESG Clarity
“An increasing number of companies are looking at internal carbon pricing for risk management as well as supporting climate policy. But what is it and how does it work? Professor Gianfranco Gianfrate, professor of finance at EDHEC Business School, answers ESG Clarity Intelligence‘s questions. How does internal carbon pricing work? An increasing number of global companies are adopting internal carbon pricing—also referred to as “shadow carbon pricing”— to make key decisions about their daily operations and long-term business models. Pricing carbon internally is a voluntary method for companies that allows them to measure the opportunity cost of emitting GHG emissions and to internalise the impacts of those emissions, even when all or part of their operations are not subject to external carbon regulations. Carbon pricing is a source of both risk and opportunities for companies. Scenario-planning techniques and rigorous analysis of climate policy risks can provide executives with an overall view of how their business might evolve under different carbon pricing regimes. Developing this sophisticated information can enable managers to more effectively engage with regulators and policy-makers, investors, customers, and suppliers. They can identify investments and strategies that are robust to alternative future climate policy scenarios and those that can establish a stronger competitive position in the company’s markets."
https://www.esgclarity-intelligence.com/qa-understanding-carbon-pricing/
2021
