Does a sustainable product cost more?

In the last few months people have been asking me that. People who interview or talk to me about sustainability want to know if sustainable developments cost more than traditional ones.

Actually the answer is not simple, it has to be explained.  And why is that? It is simply because the calculation must take into consideration aspects beyond the manufacturing costs.

It is obvious that because they contain more items, sustainable products tend to cost more than traditional ones, however; if we analyze the entire process including the post-use costs, the result is reversed and becomes favorable to sustainable products.

In order to transform a traditional product into a sustainable one we first have to address the business aspects; what is the potential impact to the environment and what possible change can be made to adapt the product to the concept of sustainability.  The greater the number of variables in this equation, the greater the product’s possibility for adaptation.

In order to understand the advantages of a sustainable product and analyze its cost / benefit ratio one must have a broader view of the subject and also consider the two other aspects of sustainability, which go beyond economy: the social and environmental aspects.

Most of the time, business analyses only consider economical and financial aspects.  The goal is a maximum increase of profits, everything that is considered ancillary must be eliminated.

Sustainability is a recent concern that hasn’t been fully understood by the consumer; therefore, he is not willing to pay more for it.  And that is the problem: if there is no demand, there is no economy of scale, and without high volumes the production costs are higher and the price of the final product goes up.

When you factor in a crisis situation such as the one we have today, people will cut back on everything possible in order to save the business.  A consultant once told me that in times of plenty one discusses strategy, in a crisis, cost management.  Therefore, it is very probable that sustainability items would also be cut.

Which would not be wrong from a financial point of view, but completely wrong from the point of view of preserving the environment and our future.  Focusing on the current moment it look like a viable solution; however, on the mid to long term it is collective suicide.

How can we change that? Making people aware of two truths: the first is that sustainability is indeed essential, necessary and very valuable; the second is that it helps make a business viable.

The concept of value is relative.  There can only be value if there is a perception of some important need at a given time and situation.  For example, a glass of water in the desert has a much higher value than the same glass of water in an office.

In the case of sustainability, its value will be perceived in its absence, when there is a lack or a reduction in our quality of life and in the perspective quality of life of future generations.  Therefore, the value of sustainability will be more recognized in the next few years as people become aware of its importance.

Businesses without sustainability will not last because people’s lives will be severely damaged.   On the other hand, because it is aligned with people’s future and the general well-being, the profit of a sustainable business will be lasting and of interest to all involved.

We can have a better understanding of the importance of sustainability in business by breaking down a few paradigms.  First, we need to consider it as an investment rather than a cost.  Second, we should expect a long-term rather than short-term return.   And lastly, we should consider image improvement as part of the profit, recognizing sustainability for its role as a business catalyst.

For all of these changes to take place it will be necessary that we rethink our understanding of how we have lived in our society to this day, and how people, companies and governments interact.

The truths of yesteryears are not valid for the world that is being created.  This new world will only survive if we make it sustainable.  Therefore the cost of sustainability will not be measured by dollar signs but rather by our willingness to build a worthy future and a much better world.