8-8. The Impact of Carbon Pricing on EHS Strategy

Carbon pricing is a mechanism that assigns a price to greenhouse gas emissions, with carbon taxes and Emissions Trading Systems (ETS) being typical examples. As measures to combat climate change intensify, many countries and regions are adopting these systems, which directly impact a company's EHS (Environment, Health, and Safety) strategy.

First, is the change in cost structures. Because a cost is imposed based on carbon emissions, it can become a significant financial burden for energy-intensive industries like manufacturing and logistics. To address this, companies must accelerate investments in energy efficiency and the adoption of renewable energy, thereby integrating "low-carbon management" into their EHS strategy.

Second, is the importance of risk management. Carbon pricing systems have different rules in different regions, and companies with international operations must comply with multiple regulations. The EHS department must understand each country's carbon pricing policies and strengthen risk management systems to prevent compliance violations and unexpected cost increases.

Third, is information disclosure to stakeholders. Investors and customers are highly interested in a company's response to climate change and are demanding the disclosure of strategies and numerical targets that consider the impact of carbon pricing. The EHS department plays a role in increasing transparency by communicating information through sustainability reports and in line with the TCFD (Task Force on Climate-related Financial Disclosures) framework.

Furthermore, it serves as an opportunity to promote innovation. By not viewing carbon pricing as merely a cost burden but as a way to drive the development of low-carbon products and reduce emissions across the entire supply chain, companies can build a new competitive advantage.

In this way, carbon pricing significantly influences a company's EHS strategy from the perspectives of "cost management," "risk response," "information disclosure," and "innovation." Moving forward, it is essential for the EHS department to work in unison with business strategy to chart a course toward carbon neutrality, with an eye on the global expansion of these systems.