Lily Cole: “We need to know the real price of the things we buy”
The price tag doesn’t give the whole picture. How do we know the true cost – including to the environment and society – of the things we buy?
What we get to see when we make purchases is a figure on a price tag, not the wider, total costs that a product might have in terms of pollution or exploitation – to name just two of many potential factors.
There are now growing calls – from consumers, activists, investors and others – for greater transparency around the true costs entailed in making and distributing the things we buy.
One high-profile voice in this groundswell is Lily Cole, the supermodel perhaps best known for her cover shots on Vogue magazine, her cruelty-free makeup range and the tough line she’s taken on diamonds and furs.
While famous as a supermodel, Lily Cole’s also an actress and a mother. And, as of last year, she’s a published author – with her book Who cares wins: reasons for optimism in our changing world earning a place in the Financial Times’s 10 top ESG reads published in January 2021.
One major thread in Lily Cole’s book is around consumers’ understanding of “price”.
When she talks about “true cost”, she’s asking for a radical rethink that goes far beyond the price tag.
Read on: Five sustainable investing myths
“We live in a false economy,” she writes. “The real financial costs of products and services – including the economic costs of environmental degradation – are not currently being accounted for in the price of the things we buy, but rather deferred to the future.”
She points out that where production of goods involves pollution, for example, when the cost of that pollution will eventually be paid by some parts of society and at some point in time.
If harmful outcomes like pollution or labour exploitation were factored into the prices we paid now, she says, consumers might be able to make a fairer comparison between goods based on their sustainability.
“By not asking companies to pay for their pollution at source, we distort the present valuation of our choices,” she explains. “This is largely why more ‘ethical’ and environmentally-friendly alternatives, such as organically farmed food or clothes made to last a lifetime, often appear more expensive than polluting alternatives.
She says this creates the incorrect impression that environmental consciousness “can easily seem like an expensive lifestyle choice: the domain of those who can afford to care”.
Practical advice for consumers wanting to pay the “right” price
Lily Cole’s book (and her blogs and podcasts, including recently with the BBC, see below) go on to offer practical tips on how to shop more sustainably – without necessarily spending more cash.
“There are other more fundamental (and ultimately cheaper) remedies: we can focus on buying less, but better,” she advises. “Shifting our mindset away from disposability: buying one expensive coat that lasts ten years, rather than ten cheap coats; learning to sharpen our knives rather than buying new ones; repairing what we already have; learning DIY.”
The role of money in driving change
Investors also want the bigger picture when it comes to true costs. Shareholders want to know, for example, that the profits or returns they are benefiting from today are not being generated by unsustainable practices which defer a cost – in terms of environmental harm, for example – further down the line.
This is why investment firms are developing new tools which can give a sophisticated picture of the total performance of a holding, not just a snapshot of its stated profits today.
Sometimes known as “impact-adjusted profits”, this is a way of measuring profitability that factors in the harm a business does to its stakeholders, as well as the positive benefits it might have (for example in providing healthcare or improved living standards to employees).
Find out more: What sustainability means to us at Schroders
But the process of making these measurements is tricky, as Lily Cole acknowledges in her book.
“Unless you live in an entirely self-sufficient way,” she writes, “everything we touch, eat and use is connected to a complex web of trade relationships that we are responsible for being part of.
“When we make a purchase, we are explicitly supporting that way of doing business: by giving a company our money, we are funding them to keep going. Of course, the power of money lies not just in how you spend it; but also, in how you earn it, save it and invest it.
Looking to make a lasting impact on society and the environment with your investments? Find out how.
■More from Lily Cole on consumerism and reforming the ways we shop, spend and save:
You can buy Lily’s book Who cares wins out in paperback from April 2021 on Amazon or from your local bookstore. Her podcast series of the same name is available on Spotify and other platforms. She’s also featured in the BBC climate change podcast What planet are we on?, which you can find on BBC Sounds.
View the original article on MoneyLens. MoneyLens is a website aimed at helping millennials manage their money.
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