True Price: Future-Proofing the Economy

True Price: Future-Proofing the Economy

Many organizations are finding ways to incorporate true cost accounting into their business models. Founded in 2011, the Netherlands-based non-profit, True Price, is a response to the need for true cost accounting in the market. True cost accounting is the practice of accounting for all external costs – including environmental, social, and economic – that result from the production of a commodity. 

Although several sustainable business models already existed prior to the True Price model, not one operates successfully at all levels. True Price hopes to enable all organizations – from governments to multinational corporations to fellow non-profits – to identify and evaluate products’ true environmental and social costs in order to minimize them. True Price “is a social enterprise that helps organizations measure, monetize, and improve their impact. The research that [they] offer resonate[s] with the movement towards a transparent, inclusive and future-proof economy.”

The True Price method begins with monetizing impacts at product-, company-, and investment-level, examining the social and ecological costs that society incurs during production and consumption, without making a payment. According to True Price, “the most important ecological costs are climate change due to emissions, biodiversity loss, land and water use, depletion of minerals and other materials, and pollution and waste. On the social side, we need to consider underpayment, indecent labor conditions, health risks on the job, insurance gaps, impact on local communities and health effects on consumers.” By putting a dollar amount on these costs, all parties – from consumers to companies – can evaluate potential cost savings and other opportunities to improve business sustainability.

True Price works with a wide range of organizations. Their current partners are AkzoNobel, CNV International, Deloitte, DSM, Ernst & Young, ICCO, IDH, FMO, NCDO, PricewaterhouseCoopers, Rabobank, ABN AMRO, Oxfam Novib Grow Campaign, the Natural Capital Coalition (formerly TEEB for Business coalition), Triodos Foundation, and Worldconnectors. As partners, organizations have access to exclusive events and networking opportunities, as well as a customized trajectory to devise a True Price project proposal. Partners are also invited to join the Partnership Council and advise the True Price Board.

According to the True Price website, the ultimate goal of the organization “is to know the True Price of each product and service, so that we can together bring them down [either] by preventing (e.g. protect a forest) or by restoring social and ecological costs (e.g. rebuild a forest).” In order for this to happen, the true environmental and social costs must be made visible.

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