Climate change is regarded by many as the biggest problem facing the global community. It is also regarded by many as the one of the best business opportunities – in a classic SWAT sense. It’s an issue that is unlikely to be resolved any time soon due to the fact that climate change isn’t the problem. It’s actually the symptom. The problem is excessive consumption, something we won’t ever hear from governments, companies or anyone other than the extreme left and conservation groups.
Here’s the thing: Everything we do (consume) happens to emit greenhouse gases. Driving, eating, buying, mining and building all consume energy and resources being manufactured, packed, delivered and used. Governments and corporations are unlikely to encourage reduced consumption because, apparently, ‘physical’ growth is good.
Some would argue that permanent growth in consumption is an inescapable consequence of the debt-based nature of all modern currencies. When almost no one questions this, let alone understands it, reforming a consumption-focused economy could take decades, or perhaps be impossible. There’s time for a lot of pollution in those intervening decades, and anything we do in the meantime to consume in a less polluting way (in our lives and through our entire business value-chain) has to be welcome.
Carbon off-setting is just too simple, and only provides a band aid solution to the current economic system’s ecological problems. A more positive 2.0 business approach is to consider the three price tags that every business has. We’ve been trained to focus on the first price tag: the price on the shelf or car window. Occasionally we consider the second, and the third price tag has been largely ignored in the post war industrial era.
First price tag: The cost of purchasing the good or service, usually represented in a dollar amount.
Second price tag: Cost to use, maintain and hold the product or service. The dollars you need to spend on it to get the value in use.
Third price tag: The cost for the wider environment and ecology, social implications and personal cost.
The three costs of anything never did live on separate islands. Just like any complex economic, social or biological system, they all interact. We we’re just fortunate to have had such an abundance of resources on earth that we could get away with it. Unfortunately, for the last 30 years most companies, brands and governments have pretended that this isn’t so.
There are myriad ways we can leverage the three price tags. The first is to admit, then leverage the inter-connectedness.
Toyota has done an amazing job on this with the Prius Hybrid car. The first price tag is a premium ($40k-$50k), but it more than pays off on the second (1,000km per tank of petrol) and the third price tag (90 percent less emissions). Both of which beat every other car on the market. No surprises that Toyota hasn’t had to do any ‘real’ (expensive) advertising in Australia. For many years the Toyota Prius couldn’t keep up with demand in an industry which is constantly announcing plant closures, mass redundancies and financial disasters. Interestingly, it’s the third price tag that makes the emotional connection with consumers.
Ok, we don’t have to go out and save the world to leverage the three-price-tag insight. It’s a reality in all product and consumer segments. Businesses that build a strategy considering all three prices can really have an advantage – a path to market. It’s only a matter of time before the three price tags become enforced by governments. We’ve seen it in housing efficiency, white goods, alcohol and even water.
Which industries are currently ignoring price tag two and three? Maybe you can be first to market with this insight and give them a marketing lesson.
Considering all the price tags doesn’t mean we have to live in a cave and eat nuts. Smart businesses will find a way for us to maintain lifestyle while eliminating eco footprints, not simply offsetting them. In fact, it’s smart businesses that will transform our way of living – not government regulation. Businesses that manage to do this will be rewarded with a mass of positive, free publicity and greater brand traction.
It’s no different with early stage business development or being green. If you’ve got an issue, make sure you focus on the problem, not the symptom, or you’re unlikely to solve it.
Steve Sammartino is a surfer & greenie at heart and also the founder of Rentoid – a peer-to-peer renting portal, which has all price tags covered!
