Simulate how carbon damages would impact firms' financial statements
Emissions Scope
Summary Statistic
Average
Median
How to Use This Tool
This simulation allows exploring how the EBIT margin in an industry would change if it were adjusted by deducting monetized carbon costs (CO2-Adjusted EBIT). Carbon costs can be calibrated depending on the emission scope (i.e., whether to include Scope-1 or total emissions) and the price per ton of CO2-emission (i.e., whether to use the current price in the EU ETS or an estimate of the social cost of carbon from the German environmental agency). This tool allows choosing the emission scope and provides either average or median CO2-adjusted EBIT margins for three different prices per ton of CO2-emission.
| Industry | EBIT-Margin | CO2-Adjusted EBIT Based on CO2-Price of | ||
| DE ETS (45€) |
EU ETS (66€) |
UBA SCC (254€) | ||
| Academic & Educational Services | 19% | 19% | 19% | 18% |
| Applied Resources | 12% | 10% | 10% | 6% |
| Automobiles & Auto Parts | 7% | 7% | 7% | 6% |
| Banking & Investment Services | 27% | 27% | 27% | 26% |
| Chemicals | 12% | 11% | 10% | 5% |
| Consumer Goods Conglomerates | 13% | 12% | 11% | 8% |
| Cyclical Consumer Products | 11% | 10% | 10% | 9% |
| Cyclical Consumer Services | 11% | 10% | 10% | 7% |
| Energy - Fossil Fuels | 17% | 15% | 14% | 7% |
| Financial Technology (Fintech) & Infrastructure | 18% | 18% | 18% | 18% |
| Food & Beverages | 12% | 11% | 11% | 9% |
| Food & Drug Retailing | 4% | 3% | 3% | 3% |
| Healthcare Services & Equipment | 15% | 15% | 15% | 15% |
| Industrial & Commercial Services | 9% | 9% | 8% | 7% |
| Industrial Goods | 10% | 10% | 10% | 9% |
| Insurance | 12% | 12% | 12% | 11% |
| Investment Holding Companies | 28% | 27% | 22% | 11% |
| Mineral Resources | 18% | 13% | 12% | 4% |
| Personal & Household Products & Services | 13% | 13% | 13% | 13% |
| Pharmaceuticals & Medical Research | 21% | 21% | 21% | 20% |
| Real Estate | 26% | 25% | 25% | 23% |
| Renewable Energy | 8% | 7% | 6% | 3% |
| Retailers | 7% | 7% | 7% | 6% |
| Software & IT Services | 14% | 14% | 14% | 12% |
| Technology Equipment | 13% | 13% | 13% | 12% |
| Telecommunications Services | 17% | 17% | 17% | 16% |
| Transportation | 12% | 10% | 9% | 3% |
| Uranium | 1% | 0% | -2% | -7% |
| Utilities | 18% | 11% | 9% | 0% |
Method
In this table, we combine financial data from LSEG and emission data from CDP to simulate the effect of three different carbon prices on earnings before interest and taxes (EBIT). There might be differences in the EBIT figure across GHG scopes because the samples might differ due to emission data availability The carbon prices are based on the price of the German Fuel Emissions Trading Act in 2024 ("DE ETS"), the EU Emissions Trading System (using the average price from 1 Jan 2024 to 30 Jul 2024), and the 2023 estimate of the social cost of carbon provided by the German Environmental Protection Agency ("UBA SCC"). We have not adjusted for any potential double counting of previously paid carbon emission charges (e.g., emissions already covered by an ETS). As a result, the CO2-Adjusted EBIT margins in our simulation could be understated/the effect of a possible adjustment could be overstated.
