Internal shadow carbon price
Wesfarmers applies an internal 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 cost 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' internal shadow carbon price for capital expenditure decisions in Australia starts at $22/tonne CO2e in the short term and increases to $98/tonne CO2e in the longer term. When assessing investment decisions, carbon price sensitivity analysis is also conducted.