
Charlie Johnson of CRA Sustainability
It is only in recent years that financial markets and society more generally fully understood the broader positive and negative externalities that businesses can create as a result of their activities. Before this, a lack of general awareness resulted in the absence of a pricing mechanism enabling the 'internalisation' of these externalities preventing their measure from being priced into market value.
Today, specific measures and mechanisms, like a carbon price, are being explored as ways to enable a more accurate and quantified picture of the societal costs of specific business activities. Greenhouse gases emissions are a particular focus. The market is already beginning to price this perspective into the market value of certain assets - in particular in sectors with an increasingly clear and visible narrative connected to the creation of 'externalities', such as oil and gas - long before the specific pricing or taxation mechanism are fully in place. Difficult decisions in a landscap...
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