Large companies are increasingly taking the cost of carbon pollution into account when making investments.
More than 1,200 companies now use internal carbon pricing to offset and avoid environmental damage, according to a survey from the Carbon Disclosure Project (CDP). That’s 23% more than last year.
Nearly 40 of these firms, worth a combined total of $1.5 trillion (£1.15tn), said offsetting carbon has had a significant impact on their business by shifting investments towards energy efficiency measures, low carbon initiatives and green product development.
French utility ENGIE has decided to no longer pursue new developments in coal whilst Microsoft and Nissan are trying to reduce greenhouse gases.
These decisions were based on savings determined by internal carbon prices, the survey adds.
Paul Simpson, CEO of CDP, said: “Companies not yet incorporating a price on carbon are at risk from having a too-short business planning horizon given how fast climate change issues are moving.
“Incorporating climate change as a line item delivers improvements in managing the environmental risks associated with climate change, which is why investors are looking for companies to carbon price their business.”