Can We Afford Sustainable Business?
Taking a creative approach to pricing can benefit society, the environment — and your company.
“How are we going to pay for this?”
In that question lies the conundrum faced by the growing ranks of corporate leaders who recognize that business must, at the very least, stop contributing to the most urgent problems facing humanity and ought to, at best, help solve them. In mission statements and strategic plans, many companies are making commitments to improving sustainability and reducing inequity — but when it comes to meeting those goals, they are tripped up by the financial implications.
Overlooked in the debate, however, is the price mechanism. We contend that it’s possible to find creative solutions that rally all market actors around responsible behaviors that mitigate the negative externalities of commerce before businesses tally them up and price them in. In one sense, we argue that organizations act more as caretakers of markets than as simple producers, using the incentives and information embedded in the price mechanism to allocate the responsibility for broader and fairer access, for conscientious and effective consumption, and for handling waste more efficiently.