Reading 4: The True Cost Behind “Cheap” Products

 1. Think about a product you purchased this week. What social or environmental costs might be externalized in its production? Who likely bears those costs — geographically and across generations?

I recently purchases a Big Mac meal from McDonalds on my way to school as it was convenient and affordable. This reading made it quite clear that although it was affordable there is much higher "true" cost that I did not pay.

In the case of the Big Mac meal, externalized costs can be seen from sourcing ingredients to putting the burger together. Greenhouse emissions from the cattle farms and water pollution from industrial farming are two main costs that can be identified. Apart from the environmental impacts, there are some social costs as well. For example, many workers are overworked and underpaid in the fast-food industry to keep prices low and margins high. According to the reading, these costs don't just disappear, instead they are shifted onto society, ecosystems, and future generations.

Although I purchased this meal in Winnipeg, the above mentioned impacts can be felt in other regions such as Alberta and Saskatchewan where McDonald's sources most of its beef from in Canada. Future generations will have to face the impacts of these large scale cattle farms on the local ecosystems. This highlights how a simple, everyday purchase is connected to a broader global system.

2. Should businesses be legally required to internalize environmental and social costs, or should this remain a matter of consumer choice and market pressure? What would be the implications of each approach?

I firmly believe that it should be a legal requirement to internalize environmental and social costs. This reading highlights that by externalizing these costs, companies gain an unfair advantage as they can lower their prices.

Legal requirements would even the playing field for all businesses. Businesses would be held accountable for their true impact on society and the environment. 

However, these regulations would result in businesses having higher costs of operation which would passed  on to the consumer in the form of higher prices. Relying only on consumer choice is not plausible either as most people don't have enough information or the financial flexibility to make ethical decisions. I think a balanced approach where regulations are combined with market pressure would be most effective.

3. Ray Anderson described his realization as a moral awakening. Do you think large-scale corporate transformation requires this kind of personal ideological shift at the leadership level? Why or why not?

In short, yes. To transform a business in its entirety a personal ideological shift must happen at the leadership level. The case of Ray Anderson highlights how his moral awakening led him to transform his company's entire business model.

Unless this kind of change happens at a leadership level, sustainability efforts may not be implemented across the board and probably will only remain superficially. If the employees see a genuine effort from leadership to be more sustainable they are more likely to follow suit and make the necessary changes.

As a business, other factors could also influence change such as new regulations and consumer pressure. However, I still believe that a ideological shift at the leadership level is critical to sustaining this transformation.

4. Interface demonstrates that sustainability can align with profitability. Do you think this alignment is always possible, or are there industries where true sustainability would fundamentally challenge the core business model?

In short. no. Although Interface demonstrates that sustainability can align with profitability, this will not always be possible. The example provided illustrates how redesigning operations can reduce waste, improve efficiency, and create long term value which may increase profitability. Certain industries such as fossil fuels and fast fashion are built on high levels of consumerism and resource extraction. These industries by design are not sustainable but are extremely profitable. However, due the nature of these industries sustainability will require a major change to its core business model which would reduce profitability. While alignment is still possible in these industries it may require them to rethink their traditional approaches to growth and profit.

5. How might policy shift if green chemistry principles were embedded into product design from the outset?

Green chemistry is a preventive measure as opposed to reactive one. Based on that, embedding green chemistry principles into product design would would shift policy from reactive to preventive. According to the reading, green chemistry focuses on designing safer products and processes from the beginning rather than trying to manage the pollution afterwards. Companies that adopt green chemistry would not need to spend large sums of money on clean up efforts. 

A shift like this would require increased investments in green technology and strict design standard which are both beneficial to the company and society.

6. If you were leading a company that relies on chemical inputs, what barriers might prevent you from fully adopting green chemistry principles?

There could be several barriers that may prevent a company from adopting green chemistry principles. The biggest barrier in my opinion would be the financial cost of doing so. Redesigning products and processes and acquiring the necessary technology would require a significant upfront cost.

Green chemistry is also a somewhat modern approach thus may create some technical challenges. For example, safer alternatives may not be readily available to meet the performance requirements of the business. In addition, the argument from profitability over sustainability could be another barrier especially at the leadership level.

However, I feel that with strong leadership and long-term planning these barriers could be overcome.

7. Should green building standards be voluntary market-based certifications, or should governments mandate higher performance standards for all new construction? What are the trade-offs of each approach?

I believe that a combination of voluntary and mandatory approaches would be the best in this situation. Voluntary certifications would allow a company to improve its competitiveness by differentiating itself from others. However, if it remains solely voluntary it may not lead to widespread industry adoption. Mandatory regulations, on the other hand, would have much larger impact as companies have to ensure that these buildings meet a minimum sustainable standard.

The trade-off in this situation is that mandatory standards would increase operations costs and cut into profitability while reducing flexibility where as voluntary systems may not be adopted widely enough to address sustainability issues. A combination approach would be the most effective.

8. If you were a corporate leader choosing between LEED, WELL, or Living Building Challenge certification, what would drive your decision?

The decision would be based on a combination of factors such as organizational goals, performance, and long-term value.

LEED has strong recognition and focuses on environmental performance, while WELL focuses on health and well-being. The Living Building Challenge is the most demanding out of the 3 but has the highest sustainability standards.

I would likely combine LEED and WELL as it provide environmental benefits as well as improved employee well-being which supports long-term success.