the economy, once environmental damage
has been factored in. It based its assessments
on economic value added (EVA), as well as
external environmental costs, to produce “a
measure of true value added (TRUEVA) that
subtracts from the firm’s operating surplus
not only its costs of capital but also the envi-
ronmental damage it imposes elsewhere in
the economy”.
Trucost found that, by adopting an external
cost per tonne of CO
2
emitted of US$22 (£14)
– which was the average price during the EU
emission trading scheme’s first year – only six
of the 25 companies analysed had a positive
TRUEVA. In fact, for the majority of the
companies, the cost of the damages they
imposed exceeded the surpluses they generat-
ed – often by a large margin. “[The analysis]
should help investors make informed deci-
sions and be able to direct investments into Only a small fraction of the world’s utility companies are actually taking their carbon emissions seriously
those… companies that are making greater
strides to reduce emissions,” says Simon sion plant to produce electricity and hydrogen far the largest share among all industries.
Thomas, Trucost’s chief executive. from coal. Meanwhile, Entergy plans to spend “Although many firms understand that
And, despite a poor overall performance, more than US$14 million on 61 separate emis- climate change is a business issue, we still
there are still some green shoots of optimism sion-reduction schemes, cutting its CO
2
out- have a very long way to go to de-carbonise
within the sector. American Electric Power, put by more than six million tonnes by 2010. the sector to ensure emissions are cut in line
for example, plans to invest US$1 billion The electric utilities sector is responsible with scientific recommendations,” says CDP
(£628M) to build the world’s first low-emis- for about 25% of global CO
2
emissions – by CEO Paul Dickinson.
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Sustainable Business ❘ June 2009 25
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