1. Internal carbon pricing adoption: An internal carbon price – as seen in S Group, UltraTech Cement and Petrobras – anticipates regulatory costs and creates incentives for low-carbon investment when set at a level sufficiently high to reflect likely BCA and carbon-pricing exposures, aligning corporate strategies with global carbon frameworks. Companies can consider embedding this price in major capital expenditures, long-term planning and risk management processes. In parallel, companies could conduct scenario mapping to assess how evolving BCA designs and related shifts in domestic carbon prices may alter cost structures, competitiveness and investment priorities over time, ensuring that internal pricing and strategic planning remain adaptive to a dynamic policy environment. 2. Engagement with suppliers: Companies can consider systematically measuring, monitoring and improving supplier emissions using robust digital MRV systems. Supplier audits, capacity- building initiatives and sustainable supply chain frameworks – as implemented by CATL and UltraTech Cement – enhance accountability, mitigate indirect BCA exposure and provide a competitive edge in carbon-regulated markets, even though BCAs typically do not cover Scope 3 emissions. 3. Investment in digital carbon accounting systems: Accurate and transparent emissions data can enable streamlined reporting, reduce compliance risks, inform operational decisions, facilitate supply chain collaboration and increase investor confidence. 4. Adopting low-carbon technology and process innovations: Companies can consider pursuing energy-efficiency measures, integrate renewable energy, adopt circular economy practices and, where needed, adopt hydrogen-based production or CCUS. Technology roadmaps and R&D collaborations – as demonstrated by S Group, CATL and Petrobras – support long-term carbon risk management and open new market opportunities. 5. Financial strategies underpinning decarbonization: Sustainability-linked bonds, green loans and bonds, decarbonization funds and scenario-based planning can mobilize resources for low-carbon investments. Combining financial instruments with operational optimization, diversified sourcing and product innovation enhances resilience against carbon costs. 6. Cross-sector and internal collaboration: Participation in industry coalitions, joint MRV initiatives and procurement networks helps companies address compliance challenges, harmonize standards and collectively reduce emissions. Equally important is internal cross- functional collaboration and knowledge-sharing within the organization, enabling companies to strategically navigate the BCA landscape while enhancing regulatory compliance and competitiveness. 7. Adoption of the PACE framework: Where appropriate, the PACE framework can guide decision-making, integrate carbon considerations into strategic planning and enhance alignment across operations, supply chains and stakeholder engagement. 8. Other procurement actions to navigate BCAs: Mapping suppliers of in-scope goods by origin, volume and embedded emissions; shifting towards lower-carbon suppliers or materials; forming cross-functional BCA teams supported by governance structures, external consultants or specialized software; and updating contracts to include emissions- reporting and BCA-compliance clauses. 9. Alignment with internationally harmonized carbon accounting standards: As they emerge, companies can align with these standards to secure access to affordable green finance, which could enable the leveraging of BCAs as opportunities rather than obstacles. Border carbon adjustments mark a new phase in global trade, one that will unfold at different speeds, with varying ambitions and divergent impacts. Many companies face real constraints, from cost pressures and policy uncertainty to uneven infrastructure and market readiness, making the path forward complex. Yet even within these limits, there is space to act: by identifying practical opportunities, collaborating across value chains and maintaining a long-term view, business leaders can increase their business competitiveness while helping to ensure that the transition supports both resilience and sustainable growth. Climate and Competitiveness: Border Carbon Adjustments in Action 35

Climate and Competitiveness Border Carbon Adjustments in Action 2025