Adrian de Groot Ruiz, co-founder and executive director of True Price, likes to ask ‘If our planet and society had a bank account, what would they charge us for its services?’ De Groot Ruiz and True Price are an important force in the growing field of ‘true cost accounting,’ a new concept which seeks to put a value on the environmental and social costs of business.

True Price is a non-profit organisation that works with business to identify and put a ‘true price’ on their products. They have developed a method, which in the long-term will be open-source, to assess these environmental and social costs, drawing on existing research and working with a range of collaborators in business, the public sector, academia and civil society.

Developing robust figures in the assessment of a ‘true price’ is incredibly important in the mapping of these costs and in convincing business of the necessity of true cost accounting and why it can help them run their business better. It helps both consumers and companies to see and understand the value of sustainability, and for business this can help to ‘future fit’ it by revealing potential cost savings and making visible risks associated with resource dependencies and regulations.

De Groot Ruiz also wants to encourage businesses to build sustainability into their products – he comments that ‘…solutions exist to produce and consume goods sustainably, but we cannot see them as we do not have the information. We compare it to a light switch. If you´re trapped in a large building, chances are you will not find an exit if there is no light at all. If all of the sudden, the lights are turned on, it´s easy.’

Keen on transparency in business, De Groot Ruiz feels that openness and honesty have a growing currency among consumers. He argues that the fear with transparency is that the warts and all approach of it will backfire and harm a company’s brand, but he points out that consumers are both more understanding and forgiving of a company if they are honest about their practices and striving to do better.

There is a growing roster of companies, as well, that are building the transparency of true cost accounting into their USP. De Groot Ruiz often cites the impact of Puma’s pioneering Environmental Profit & Loss Account as evidence of how transparency can become a company value that consumers appreciate. He envisages a day when the true price of products is clearly visible to consumers allowing them to understand what they are paying for. This would also allow fair and sustainable practices to have a competitive value in the marketplace, arguing that ‘Progressive brands could set themselves apart positively by sporting products with low true prices, and no brand would like to have a reputation of high true prices.’

For De Groot Ruiz, true price and true cost accounting will ‘[pave] the way for a new capitalism,’ one which keeps ‘environmental and social costs at bay, [conserving] the planet for ourselves and our children.’ This is the cornerstone of an equitable sustainable future.

Sign up to our Newsletter

Stay up to date with the latest SFT views and news