"The Counterattack of the Carbon Invoice"... Samjong KPMG: "Risks Must Be Turned into Opportunities"

Carbon Costs: From Potential Risk to Realized Liability
Proactive Preparation Can Turn Challenges into Opportunities

As social costs associated with carbon emissions are now becoming actual financial burdens for companies, there is an increasing need for proactive carbon asset management systems, according to recent analysis.

On May 21, Samjong KPMG released a report titled "The Counterattack of the Carbon Invoice: Solutions for Turning Four Major Risks into Opportunities through Carbon Asset Management."

The report emphasized that carbon costs are no longer a "potential risk" but have become a "realized liability" that impacts every facet of corporate management. The introduction of the European Union's Carbon Border Adjustment Mechanism (CBAM), discussions around the U.S. Clean Competition Act (CCA), and the launch of Phase 4 of Korea's Emissions Trading Scheme (K-ETS) are all expanding global carbon regulations, further increasing the burden on companies.

Samjong KPMG suggested the following response strategies for Korean companies: adopting an emissions rights upstream strategy and an internal carbon pricing system; building an ERP-linked digital MRV (Measurement, Reporting, and Verification) infrastructure; establishing strategies for direct renewable energy power purchase agreements (PPA) and a carbon-free energy (CFE) mix; and supporting partners in measuring their carbon footprint and jointly responding to low-carbon certification requirements.

The report also introduced cases where leading global companies have turned carbon risks into opportunities. Tesla and Occidental have generated new sources of revenue by capitalizing on emissions rights as assets, while Microsoft has built an artificial intelligence (AI)-based digital MRV infrastructure. Google is strengthening energy sovereignty through its 24/7 CFE strategy.

From a financial perspective, the report identified the emissions rights upstream strategy and the introduction of an internal carbon pricing system as core tasks. It stressed the need to secure high-quality emissions rights and carbon credits, and to establish an investment decision-making framework centered on low-carbon assets by utilizing an internal carbon pricing system.

On the operational side, the necessity of building an ERP-linked digital MRV infrastructure was highlighted. The report explained that companies should go beyond merely recording emissions and instead develop a system that links ERP and carbon accounting engines in real time, enabling immediate conversion and management of production and energy usage data into carbon emissions. In particular, with global disclosure standards set to become mandatory in 2027, ensuring data reliability and verifiability was identified as a key challenge.

For energy procurement, the report recommended establishing direct renewable energy power purchase agreement (PPA) and CFE mix strategies. "The core of achieving carbon neutrality lies in reducing indirect emissions (Scope 2) from electricity use," the report noted, adding that companies need to pursue an "energy sovereignty" strategy by directly owning and controlling energy sources. Building a portfolio that combines renewable energy sources such as solar and wind power with carbon-free sources like nuclear and hydrogen fuel cells will allow companies to manage both electricity price volatility and carbon risk simultaneously.

Additionally, from a supply chain perspective, the report advised that companies should build a cooperative ecosystem to support partners in measuring product carbon footprint (PCF) and responding to low-carbon certification in preparation for mandatory Scope 3 disclosures. Establishing a dedicated carbon management platform for partners and launching joint reduction projects will enhance carbon transparency across the supply chain and strengthen capabilities to respond to global market demands.

Lee Dongseok, Deputy CEO and Head of the ESG Business Group at Samjong KPMG, stated, "With global disclosure requirements expanding rapidly, this year will be a 'golden time' for companies to fully prepare their carbon response systems," adding, "Companies must now regard carbon as a strategic asset and transform themselves into proactive 'carbon asset managers.'"

This content was produced with the assistance of AI translation services.