Information Systems for Environmental Sustainability

IT, Resource Productivity, Environmental Preservation, and the Fourth Industrial Revolution

Many Large US Companies Internally Price Carbon

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Do U.S. companies view energy and carbon emissions management as being strategic, and are they taking actions to back this up?

On the one hand, business lobbying groups such as the U.S. Chamber of Commerce don’t think government should be involved in pricing carbon emissions:

In a letter to Congress, the Chamber, which represents more than 3 million businesses, says the Clean Air Act is “not the appropriate vehicle to regulate greenhouse gas emissions” and warns the EPA’s GHG emissions limits for power plants will raise power prices with “negative implications extending to nearly every segment of the economy.”

On the other hand, CDP disclosures indicate that some major US companies appear to be self-regulating:

Twenty-nine major publicly traded companies based in or operating in the U.S. disclosed an internal price on carbon pollution to CDP (formerly known as the Carbon Disclosure Project) in 2013, detailing both the risk and potential business opportunity for early action by their companies.

What does this mean in practice? It’s possible that these 29 firms (and possibly others which price carbon but chose not to disclosure it) are using these prices in investment decisions. This means that these companies are taking actions to back up beliefs about carbon emissions pricing and the impact on the cost of doing business going forward. It also means that information systems for capturing, storing, analyzing, and reporting such data (which I call Carbon Management Systems) are becoming increasingly strategic.

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Author: nigelpm

Associate Professor of Information Systems, Stephen M. Ross School of Business, University of Michigan - Helping organizations to navigate digital transformation.

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