Even investors who are confirmed sceptics when it comes to global warming may soon have to take account of companies’ carbon emissions. A report from the Investor Responsibility Research Center Institute and environmental data provider Trucost looks at the theoretical impact of applying a price to carbon emissions for companies in the S&P 500. With the US Congress currently considering the American Clean Energy and Security Act of 2009, this may not remain theoretical much longer.
A key point is that companies are not all equal in how affected they will be. According to the report, carbon costs would amount to less than 1per cent of operating margin for 203 companies, while 71 companies could see earnings fall by 10 per cent or more. Companies in the utilities sector are likely to be hardest hit.