When Microsoft business unit managers calculate their profits or losses each quarter, they consider more than just sales and expenses. They also factor in the price of carbon.
Even more radically, the business units are charged an internal tax by Microsoft based on their energy usage. The money goes into a common fund that invests in environmental sustainability projects.
The company’s program is at the forefront of a fast-growing effort called carbon pricing. This year, 437 companies are calculating an internal price on carbon, up sharply from 150 last year, according to a new report by CDP, a nonprofit group that monitors carbon disclosures for companies.
Businesses do what’s in the interest of business. If this many companies are pricing carbon internally, they know that climate change is a business risk
Motivated by a mixture of moral conviction, hard-nosed economic forecasting and expectation of tougher regulations down the road, companies are scrambling to understand just how much energy they use. Like Microsoft, some, including Disney and Shell, are voluntarily charging themselves, and using that money to build solar panels and wind farms.
Senate Democrats recently introduced a bill proposing tough emissions regulations, and world leaders, including President Obama and Pope Francis, have called for action to combat climate change.
“Businesses do what’s in the interest of business,” said Paula DiPerna, a special adviser to CDP who worked on the report. “If this many companies are pricing carbon internally, they know that climate change is a business risk.”