About half of the world’s 500 biggest companies by market capitalization are doing carbon pricing or planning to do so in the next two years, says a new report by CDP (formerly known as the Carbon Disclosure Project) that runs a global disclosure system for investors, companies, cities, states and regions.

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Carbon pricing is the process to ascertain the cost a company needs to pay for its emissions and a higher cost would mean it needs to pollute less and acquire technology to do so.

In India, a total of 58 companies including Infosys Limited and Tata Consultancy Services are doing carbon pricing or are planning to so in the next two years the report released on Wednesday said, highlighting a gradual move towards low-carbon investment.

Better energy efficiency, changing internal behaviour, identifying and seizing low-carbon opportunities, and navigating greenhouse gas regulations are among the common reasons companies have cited for internal carbon pricing.

Carbon pricing could hit low-income groups badly and systemic changes are required to bring down overall emissions from industry, experts said.

A big chunk of the companies belong to the carbon-intensive sectors like chemicals, cement and concrete, information technology and software development and the internal carbon price disclosed by them ranges from $10 to $50.11 with a median price of $25 per metric ton of carbon dioxide equivalent, the report said.

CDP has been collecting corporate data on the use of carbon pricing since 2014 and by 2020, 58 Indian companies are either pricing carbon or planning to do so in the next two years, said Damandeep Singh, director, CDP India, in a statement.

With more countries going for carbon pricing regulation, and carbon prices becoming all-time high in the European Union emissions trading scheme this year (rising to over €40 /$44.80 in March), corporations need to up the carbon prices being used internally at present, said the report.

Corporations employ internal carbon pricing with the purpose of addressing current or future regulations that might increase the cost of emissions and impact their businesses financially. Sixty-four carbon pricing initiatives have been implemented or scheduled by various governments and regulators, up from 61 in 2019, according to the Carbon Pricing Dashboard of the World Bank.

First Published:Apr 22, 2021 12:03 PM IST