Burberry rolls out internal carbon price and delays climate goals

Fashion brand says it “will also explore establishing a future internal carbon fee”

Burberry is rolling out an internal carbon price, and has pushed its climate targets back by a decade. 

The luxury fashion brand said it was “exploring tools to [decarbonise] in the most cost-effective manner” in its new climate transition plan, published last week. 

“An internal carbon price may enable us to further incorporate greenhouse gas (GHG) emissions into financial decision-making processes while generating internal financing for GHG reduction efforts across our operations and supply chain,” it explained. 

As a result, Burberry said it planned to implement a shadow internal carbon price from the 2026/27 financial year. 

The initial focus will be on the company’s business travel. 

“Business functions will be allocated a carbon budget for the year, with internal reporting provided to functional leads detailing the impact of their function’s business travel on their carbon budget and the associated cost of carbon,” the firm said.

“We will also explore establishing a future internal carbon fee, whereby if an allocated carbon budget is exceeded then the internal carbon fee is applied.”

Burberry already uses carbon prices as part of risk modelling. 

Its most recent climate scenario analysis concluded that the average carbon price would hit $246 per tonne within the next five years if the world was to reach net zero by 2050. 

The carbon price would be much lower – $63 per tonne – if the current Nationally Determined Contributions were achieved, but not net zero. 

It would be just $6 under the current policy scenario, according to the assessment.    

The transition plan, designed in accordance with guidance from the UK Transition Plan Taskforce, revealed that Burberry has also pushed back the deadline for meeting its climate and environmental targets. 

“We have refined our climate, deforestation, packaging and traceability targets to reflect our learnings and progress since we established our Burberry Beyond sustainability strategy in FY 2022/23,” the firm explained. 

“Based on these insights, we have extended our overall net zero target year from FY 2039/40 to FY 2049/50 and segregated our Scope 3 targets between FLAG and non-FLAG emissions.” 

Burberry will provide updates on progress against the transition plan as part of its annual reporting, starting in 2027.