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Revealed - How Ready Are You For This Now Unrecorded Carbon Footprint Liability?
Department of Poverty Creation, as some are saying, or long past due emphasis on green and renewable energy, as others are saying. Who is correct?
The carbon tax is almost here. Since politicians do not like to admit they raise taxes, it is being called a Cap and Trade Initiative.
A key part of this movement is the carbon footprint of the company's ENTIRE supply chain, not excluding the non foreign part of the process where they do not obey or really worry too much about American level regulatory costs. In case some of you from service companies are thinking, glad I do not have to worry. Start worrying. Service companies will be required to measure this and impacted by it. There already are websites like cdproject.net and software programs being used for these estimates, and the investment banking analysts are already estimating what they are calling an off balance sheet financial liability.
The enforcement of a carbon tax is imminent and it will not be long before American businesses will be held accountable for measuring their carbon footprint. Simply defined, a carbon tax is an environmental tax on emissions of carbon dioxide and other greenhouse gases.
The author warns: If you were not concerned about your company carbon footprint in the past, it is time you started to focus attention on the impact the carbon tax will have on the company operations and bottom line. No company or industry will be exempt from the carbon footprint issue: Green Movement political influence and public popularity is creating a perfect storm by which all companies will be levied a tax measured by their carbon footprint.
The proliferation of information regarding the measurement and recording of carbon footprint is evident by the number of websites springing up: cdproject.net mentioned above is a prominent example.
Their website states that: The Carbon Disclosure Project (CDP) is an independent not-for-profit organization which holds the largest database of corporate climate change information in the world. The data is obtained from responses to the CDP annual Information Requests, issued on behalf of institutional investors, purchasing organizations and government bodies. Since its formation in 2000, CDP has become the gold standard for carbon disclosure methodology and process, providing primary climate change data to the global market place.
In addition, institutional investor increasing focus on a company carbon footprint liability provides more evidence that the carbon tax will soon be a reality. In fact, the website GlobalReporting.org shows the format institutional investors want for estimated carbon usage.
Using that type information, analysts and the Chicago Carbon Exchange www.chicagoclimatex.com can estimate your impact from the carbon tax and cost increasers.
Since financial analysts and consultants can already estimate a company carbon footprint, discussions are underway to require that these estimates be included as a footnote in corporate financial statements. Based on other risks moving to more quantifiable states and then being required to be recorded on balance sheets, it is then logical to conclude that what is becoming a footnote estimate will then become a critical component in company balance sheets tomorrow.
About the Author Bottom line? What is the cost of what you do not know? Apply this information to improve profitability, reengineer business models, and strengthen or gain competitive advantage in the marketplace. Free Fiscal Test at http://www.fiscaldoctor.com/fiscaltest.html.
From Gary W Patterson Copyright 2009
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