Shadow Carbon Price
Sims applies a shadow price on carbon to help ensure investment decisions reflect all costs, including environmental costs. A shadow carbon price is an internal decision-making aid that applies a theoretical surcharge per ton of carbon emissions (CO2e). The shadow carbon price is used to better understand the potential impact of external carbon pricing on Sims’ capital expenditure, investment, and strategy decisions.
In the procurement of goods and services, the overarching consideration is ensuring best value for money for Sims. Value for money is not necessarily the lowest price, nor the highest quality good or service. Value for money is derived from a fair and balanced assessment of a range of financial and non-financial factors, including quality, cost, fitness for purpose, capability, risk, total cost of ownership, and social and sustainability criteria, including environmental costs. By including a shadow carbon price in our decision-making criteria, this supports investment in lower-emissions options, other things being equal.
Sims’ conducts carbon sensitivity analysis for decision making with pricing modelled at AU$100/t CO2e by 2030. The carbon price outlook is subject to review over time.