What is the difference between True Price (organisation) and a ‘true price’?
True Price is the name of our organisation. We are a social enterprise based in Amsterdam (a Dutch private limited liability company). We were founded in 2012. You can read more about our history on the ‘about page’.
We see True Price as the movement of consumers, businesses and institutions that take action in incorporating environmental and social costs in prices. We envision a world where all products are sold for a true price to enable a sustainable global economy.
What is a true price?
A ‘true price’ is the sum of the market price plus all social and environmental hidden costs (also known by economists as negative externalities) throughout the whole value chain of a product. The difference between the market price and the true price is called the true price gap, or also referred to as the true external cost of a product. All external costs are expressed in the same (monetary) unit. In that way, they can be compared to each other, as well as to conventional prices.
The bar of pure chocolate that can be bought in the True Price Store has a market price of $3.12. The true price gap is $0.99. This includes environmental costs like carbon emissions, deforestation, and pollution, as well as social costs like underpayment of farmers, child labor, and forced labor. The true price is thus $4.11.
What is true pricing?
True pricing refers to the process of incorporating hidden costs into transaction prices. When we refer to true pricing, we extend beyond simply calculating, presenting or paying true prices. True pricing serves as both a management and communication tool and aims to create a community of stakeholders committed to more transparent and sustainable food value chains and food systems. The goal of true pricing is to reduce or fully eliminate hidden costs.
What work does True Price do?
Since 2012 we have conducted many different projects across research, data and technology. Our main work has focused on developing the methods and approaches to calculate a true price. With our collaboration in the Public Private Partnership True and Fair Price for Sustainable Products (PPS Echte en Eerlijke Prijs voor Duurzame Producten), all our open source methods are available via the True Price Foundation website.
Our key activities include: calculating true prices, developing and maintaining the true price database and engaging with consumers, researchers, educators and policymakers to expand the true price movement. You can check out the true prices of certain products here.
How are true prices calculated?
True prices are calculated according to the True Price Standard, which is the overall name of our methodology and implementation guidelines documents. Methodology refers to calculating the true prices while implementation guideline are about paying them . The calculation method is regularly updated based on the most recent scientific insights. True Price Foundation makes the method available to professionals who want to adhere to the method and apply true pricing in practice. You can read more about this here.
Want to get started with a true price calculation and don’t know how? Reach out to us.