This morning Jeffrey Hollender, the Chairman of Seventh Generation, gave the keynote for our Green Enterprise 2010 Seminar.
One powerful concept he described was “full cost” sustainability accounting whereby companies are required to include their external environmental costs (ie. things like pollution or resource consumption) into their corporate earnings.
A quick test said that if coal power producers included the full costs for their CO2 emissions it would wipe out all their earnings instantaneously. More broadly, he cited California’s $300 million healthcare cost for non-insured Wal-Mart employees as an example of external costs not currently included in Wal-Mart’s corporate profit analysis.
While Jeffrey acknowledged the challenge with getting this accounting system implemented, his thesis remains that only full cost accounting will enable greener products to be priced at an advantage to less green products. And this pricing advantage would spur adoption and corporate response to design more of them.