Study: RWE’s Corporate Value at Risk from Carbon Price

December 26, 2006

Email this story Print this post Add your comments

German power producer RWE could lose up to 17 percent of its value if its business strategies fail to take into account climate change policies, environment group WWF and the independent SAM Group said today.

A new report Carbonizing Valuation by SAM Group and WWF shows why corporate value is at risk in a future with stricter laws restricting carbon emissions. The report assesses German utility RWE by modelling cash flows from a selection of RWE’s power plants.

According to the report, if RWE treats carbon emissions as business-as-usual, it could lose up to 17 percent of its net-equity value. “In a world where carbon emissions will become expensive, utilities need to keep an eye on the long-term value of their company,” says BjA?A??A?AA¸rn Tore Urdal of SAM Group. “Just a few days ago the European Commission rejected nine out of ten National Allocation Plans (NAP) for the next phase of the EU Emission Trading System; this illustrates that in the long term the carbon price is going to climb high and those companies and investors need to take note.”

Climate Change presents a unique challenge for businesses: it is the greatest and widest-ranging market failure ever seen, according to the Stern Review on the economics of climate change, published in October 2006 by the UK government.

Email this story Print this post Add your comments

Advertisers

Make sustainability part of your strategy.

Get equipped at the SAP Sustainability Resource Center. >>

Unclear about the EPA's new GHG Rule?

Learn how it could affect your business. >>

EPA mandatory emissions reporting starts Jan 1st

CSA Standards can help your organization get ready for compliance. Find out how. >>

Survey Results: Product Environmental Compliance Best Practices

How to achieve compliance at a significantly lower cost. Download the full report. >>

Join the Discussion

Recent Daily News [ see all ]

11/20/2009
11/19/2009
11/18/2009

Charts [ see all ]

European Paper Industry Cuts CO2 Emissions by 42% since 1990

S. America Takes Most Urgent View of Copenhagen Talks

Nike Tops Annual Climate Action Scores

Oceans May Trap more Carbon than Forests

Jobs

View All Jobs >> Post a Job >>

Comments and Discussions

Trade Association on Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
"Seriously… that..."

Gary Markowitz on Supermarkets Tackle Emissions Reductions, Fuel Efficiency
"Supermarkets waste over 10 percent of their energy through improper..."

peter in ireland on Ontario May Follow California’s Lead on TV Energy Efficiency
"Governor Schwarzenegger is shooting himself in the foot! 1...."

Environmental Leader on S. America Takes Most Urgent View of Copenhagen Talks
"The survey respondents (the PDF report mentions 4,000 respondents in 38..."

Jake on UPS Trying New Hydraulic Hybrid Trucks
"A point of clarification: the Reuters press release referenced herein reports that 20 UPS will purchase..."

Custom Organic Shirts on S. America Takes Most Urgent View of Copenhagen Talks
"90% of North Americans believe it is urgent to get a global climate..."

peter dublin on California City’s Green Building Ordinance Applies to Commercial Buildings
"Why energy efficiebnt regulation on buildings –..."

Environmental Leader