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Writer's pictureFabien Cros
Jul 23 min read

True Pricing Unveiled: How to Transform Markets and Enhance Sustainability


In this episode, Fabien Cros explores the radical concept of True Pricing with Michel Scholte, co-founder of the Impact Institute. Michel enlightens us on how businesses can adopt True Pricing to incorporate the real social and environmental costs into their products and services, revolutionizing both sustainability and consumer behavior. Through compelling narratives, including a transformative journey of a chocolate company that led to dramatic market success and societal benefits, Michel illustrates the profound impact of True Pricing. This episode unveils the pivotal "epiphany moment" that many businesses experience when they realize that ethical pricing not only aids sustainability but also enhances their market presence and consumer trust. Tune in to learn how implementing True Pricing could be the key to a sustainable business model that also drives economic success.


Check out True Price: https://trueprice.org/


Time stamps:

00:00 - Introduction to the Episode. Introduction to the "Pricing for the Planet" podcast, where the host welcomes Michel to discuss the concept of true pricing and its impact on sustainability. 00:29 - Key Message from Michel. Michel emphasizes the essential idea: "There is no sustainable economy without true prices," explaining the necessity of including social and environmental costs in market prices to foster a sustainable economy.

01:06 - Michel's Personal Journey. Michel recounts his early experiences with poverty and his realization of the broader economic forces at play, which shaped his career focus on sustainable economic practices.

02:27 - Global Trade and Economic Disparities. Insight into how global trade systems and tariff structures contribute to economic disparities, and Michel's personal observations from his time in Ghana.

03:40 - Shift in Academic Focus. Michel discusses his shift from business to sociology to understand and challenge the fundamental assumptions about market pricing and economic structures.

05:03 - Founding of the True Price Institute. Michel introduces the True Price Institute, explaining its mission to develop methodologies for calculating the true cost of products, emphasizing transparency and accountability in pricing.

06:30 - Methodology for Calculating True Prices. Detailed explanation of the three-step methodology used by the True Price Institute to assess and value the social and environmental impacts of products.

08:32 - Evolution of Normative Frameworks. Discussion on the historical context of normative frameworks, including the human rights agenda's influence on environmental and sustainability policies.

09:54 - Integration of True Pricing in Market Systems. Argument for the adoption of true pricing in market systems to ensure global sustainability and the protection of human rights.

11:00 - Challenges in Implementing True Pricing. Michel shares challenges and resistance encountered while promoting true pricing, including skepticism from major accounting firms and misconceptions about its economic implications.

14:52 - Michel presents to Tony Chocolonely CEO and COO. Despite initial nervousness, Michel presents concerns to Tony Chocolonely's leadership about their sustainability efforts. They respond by allocating 1.5 million euros to improve cocoa procurement.

16:27 - Introduction of true pricing concept. Michel discusses the concept of true pricing and its implementation, including examples like Tony Chocolonely, supermarket trials, and consumer responses.

17:46 - Impact of true pricing on sales. Michel shares examples where true pricing didn't lead to a drop in sales but actually increased them, showcasing consumer acceptance and market experiments.

19:12 - True pricing experiment at Albert Heijn. A trial where consumers had to choose between paying a true price or not, resulting in a 20% conversion initially, indicating consumer willingness to support sustainable pricing models.

21:16 - Norm sensitivity and true pricing. Michel discusses how making true pricing the default can significantly increase consumer adoption, highlighting behavioral economics and consumer preferences.

22:35 - Starting with true pricing. Michel gives advice on how producers and entrepreneurs can begin implementing true pricing, emphasizing steps like value chain mapping and collaboration with suppliers.


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