A recently released research report by CDP points to the clear trend of carbon pricing practices, as the number of multinationals factoring an internal carbon price into business plans rose eight-fold between 2014 to 2017, from 150 to 1400. In particular, over three-quarters of the energy and utilities sectors’ market cap already prices carbon internally, and more than half of the materials and telecommunications sectors is expected to do the same by 2019. Chinese companies are the fastest to increase factoring of carbon pricing, with a 40% increase between 2016 and 2017, and the country intends to roll out a major emissions trading system by the end of 2017. USA, Latin America, Canada and Korea are other regions that recorded a rise in the number of companies intending to use carbon pricing. CDP however also estimates that 800 companies that still do not price carbon, could be vulnerable to such developments; moreover, the forecast of future prices rising can be of concern to investors. Finally, Mark Lewis, Managing Director at the Head of European Utilities Equities Research and member of the Task Force on Climate-Related Financial Disclosure, expressed that “there needs to be more transparency as to how a company actually uses the price and whether it is seen as an important part of business decision-making and forecasting.”
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