Companies work hard to price their goods and services. But how much does the environment pay?
Now the International Organization for Standardization, Chalmers University of Technology in Sweden and others have developed a new system to quantify the monetary impacts of pesticides, air travel, factory smokestacks and other manmade impacts on the environment.
“One reason why sustainable development does not move fast enough is that it is not linked to the economy,” said Chalmers Professor Emeritus Bengt Steen in a press release. “Experts speak one language, and business leaders another. The negative environmental effects often remain just figures on paper. But by translating environmental issues into a monetary value, it becomes much easier to present the whole picture to an organization and influence their strategic decisions.”
The idea isn’t new. But Steen and his colleagues pushed in 2015 to develop a more comprehensive set of standards measure the impacts of products on the environment, cross referencing emissions, for example, with worker productivity and the cost of materials. The standards include price tags for goods on climate change, biodiversity, public health and other factors.
Multinational chemical company Nouryon – formerly Akzo Nobel Specialty Chemicals – is already using the system.
“We have made monetary valuation of a number of our value chains and included the results of this in our annual report,” said Nouryon Sustainability Manager Emma Ringström. “The tool has also used to see which activities in the value chain have a large total environmental damage cost compared to profit, and therefore need to be prioritized to become more sustainable.”