Internal carbon pricing as a driver for change
By incorporating a carbon price into decision-making, businesses are aligning with sustainability goals at the CFO level. This internal "tax" incentivises companies to decarbonise operations and invest in innovative projects like carbon dioxide removal (“CDR”) programmes, creating a direct financial impact. As emissions become more tightly linked to financial outcomes, the "polluter pays" principle is reinforced, ensuring that companies are financially accountable for their emissions.
The Paris Agreement and carbon pricing’s role
The Paris Agreement aims to limit global warming to 1.5°C by reducing global emissions by 45% by 2030 and reaching net zero by 2050. Carbon pricing is a key tool to meet these targets by incorporating the external costs of greenhouse gas emissions into a company’s cost structure. This approach ensures that the responsibility for emissions falls on the companies that are most capable of reducing them. Carbon pricing gives businesses the flexibility to either reduce emissions or pay for the damage they cause.
Carbon prices vary, but the impact is clear
Carbon prices typically range from 50-150 EUR/USD per ton. While the exact price can vary, the critical factor is the ability to connect emissions to financials This shift is pushing businesses to allocate resources towards decarbonisation and offset initiatives, with the financial implications of carbon emissions becoming unavoidable.
How can we help?
Our dedicated team offers support in footprint assessments, net-zero strategies, and climate risk analysis, ensuring companies stay compliant with evolving regulations while pursuing sustainable practices. Whether it’s high-emission sectors or smaller firms across the globe, embracing internal carbon pricing will be essential for long-term sustainability.
As global carbon prices rise in line with the Paris Agreement’s goals, integrating carbon pricing into business models will help companies mitigate risks and align with broader environmental objectives. Adapting early to this shift is crucial to staying competitive in the transition to a low-carbon economy.
2025 Sustainable Trends Outlook report
Discover key insights shaping sustainability. Download our 2025 Sustainable Trends Outlook report to stay ahead of market shifts.
