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Wednesday, October 16, 2013

Strategic CSR - Carbon tax

In the absence of meaningful political action to curb carbon emissions, the article in the url below reports that some companies are imposing carbon taxes on themselves. Some of the firms, such as Disney, are surprising in that they normally are the target of CSR activists for their non-CSR-type behavior:
“It's not just Disney. Although most of the world's governments have declined to put a price on carbon emissions, a handful of global companies, including Microsoft and Shell, have chosen to act on their own. They have established internal carbon prices in an effort to reduce emissions, promote energy efficiency and encourage the use of cleaner sources of power, just as a government tax or cap-and-trade program would.”
The advantage to the firm of doing this is internal pressure toward greater efficiency. At Disney, for example:
“Since 2009, when the tax was imposed, the company's engineers have changed thermostat set points, installed light sensors and efficient bulbs, increased the efficiency of chillers, heat exchangers and pumps, and shut down the lights on park icons like Cinderella's Castle and Spaceship Earth when the parks are closed.”
And, the revenues generated by the premium that is paid above market prices is collected in what Disney calls the Climate Solutions Fund, which it uses to offset emissions elsewhere in the value chain:
“The tax, the price of which depends upon the costs of offsets and the volume needed by Disney to reach its emissions targets, has been set at between $10and $20 a ton and has raised about $35m so far. That has enabled Disney to invest in a variety of certified forest-carbon projects in Inner Mongolia, China, Peru, and the Democratic Republic of the Congo, as well as in Virginia, Mississippi and its home state of California. Taking those carbon offsets into account, Disney's 2012 emissions have been cut in half from a 2006 baseline. The company has set a long-term goal of zero net emissions.”
In addition, all three firms are publicly supporting “an international framework that puts a price on CO2,” while also benefitting from the efficiencies created by such an innovative approach to operations. Primarily, however, these firms and others like them will be best placed when the global political class finally gets around to acting (Chapter 1: A Rational Argument for CSR, p16):
“Why bother with these voluntary carbon taxes? Partly to prepare for government regulation of emissions, if and when they arrive. Rob Bernard, Microsoft's chief environmental strategist, explains: ‘I think it's likely that over time society is going to move in this direction. It's hard work. We should get to it now.’”
Take care
David Chandler & Bill Werther
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Disney, Microsoft and Shell opt for self-imposed carbon emissions taxes
By Marc Gunther
March 26, 2013
The Guardian