Business Example

Our planet is facing many environmental challenges, such as climate change, water pollution, energy consumption, biodiversity change, and more. Carbon Pricing and Taxation mechanisms are one of the most effective and widely established ways to encourage companies to reduce their GHG emissions. Carbon taxes are fees directly charged to the emitter entities based on their GHG emissions and present in several countries/regions with varying rates and scopes. In addition, the European Union has approved the implementation of the Carbon Border Adjustment Mechanism (CBAM), a levy on selected imported carbon-intensive goods and precursors that set the role of trade in the fight against climate change. Finally, an increasing number of companies implement voluntary internal carbon pricing mechanisms in their sustainability strategies to encourage GHG emission reductions within their business units to fund internal sustainability projects.

This sample content covers an example of Sunshine Automotive Group, a French company specialized in the design and manufacture of axle shafts for the automotive industry. As a global company, Sunshine Automotive operates in five countries and on three continents. To ensure product quality excellence, Sunshine Automotive also manufactures all the components required for final assembly. These components are produced by its different entities, using raw materials sourced from trading partners located all over the world.

Due to the complexity of current global supply chains and carbon pricing legislation, and the increasing costs associated with carbon emissions, the topic of Carbon Pricing and Taxation is becoming a pressing matter. This is especially true for multinational companies that make use of emission-intensive materials or processes in their operations. This report aims to address these challenges by providing a comprehensive overview of GHG emissions throughout the entire value chain. It includes raw material processing and acquisition, semi-finished products manufacturing and transportation, final product manufacturing and shipping to customer as well as the costs arising from such emissions through the aforementioned mechanisms.