Shadow Carbon Price
Wesfarmers applies a shadow price on carbon to help ensure investment decisions reflect all costs, including environmental costs. Shadow carbon pricing is a method of investment analysis that adds a hypothetical surcharge to the price of projects that involve the creation of carbon emissions. This supports initiatives that are more emissions efficient, other things being equal.
Wesfarmers' shadow carbon price for capital expenditure decisions in Australia starts at $18/tonne CO2e in the short term and increases to $50/tonne CO2e in the longer term. When assessing investment decisions, carbon price sensitivity analysis is also conducted.
It is expected the shadow carbon price will be reviewed again following the Conference of the Parties (COP26) in Glasgow in the second half of calendar year 2021.
GRI 103-1, GRI 103-2, GRI 103-3, GRI 403-9, GRI 416-1