Barings sets internal carbon fees on business travel

By Ross Kerber

(Reuters) - Asset manager Barings will announce steps on Wednesday to cut carbon emissions, including a new accounting treatment for air travel, executives said, among other efforts to change employee behavior as workers return to their offices this fall.

Barings Chief Executive Mike Freno said a goal of the program is to give employees and managers data to decide what business trips are worth the cost of the greenhouse gasses they generate.

"We're starting to provide a level of transparency to teammates to see what the impacts are," Freno said.

While the charges are only internal, U.S. policymakers have many ideas for putting real prices on carbon.

The plans by the mid-sized asset manager, a unit of Massachusetts Mutual Life Insurance Co, show the spread of internal carbon pricing into the finance industry.

Similar fees have been used elsewhere, including at Microsoft Corp, and give companies a way to track emissions-generating activities, said Ateli Iyalla, managing director for CDP, a nonprofit that researches the issue.

For white-collar companies, most emissions stem from everyday employee activities. Barings said business travel accounted for half of the 21,688 tons of carbon it generated in 2019 and worker commutes another 29%, dwarfing the 2% tied to heating costs.

To reach net zero greenhouse gas emissions by 2030, Freno and other Barings executives said they would use more renewable energy and work-from-home arrangements.

Barings employees booking air travel will see an extra charge matched to the market price of the carbon emitted for their flights, currently around $20 per ton in North America.

A round trip business-class flight to Barings' London offices from its headquarters in Charlotte, N.C., could add $120 to the internal cost of the trip, said Sarah Munday, Barings sustainability director.

Barings could spend the extra money on things like emissions offsets. The company spent more than $20 million on travel in 2019 and could cut that figure by 25% next year, Freno estimated.

(Reporting by Ross Kerber in Boston; Editing by Dan Grebler)