A growing number of large companies are putting their own price on carbon emissions. According to a report published today by the University of Oxford, the Boston Consulting Group, and the carbon trading platform Patch, 1,753 companies globally report using an internal carbon price, an increase of 89% compared to 2021. That includes about half of the world’s largest 500 companies.
Internal carbon pricing can range from a purely hypothetical accounting exercise to actual spending on in-house carbon credits, the proceeds from which go into a fund tapped for carbon-cutting activities like energy efficiency upgrades or building onsite renewables. The report concludes that it can be one of the most effective ways for a company to incentivize lower-emission choices by employees, from conference travel to industrial manufacturing. But in practice, the report found, many companies settle on a price that is too low to drive Paris Agreement-aligned reductions.