Measuring the Sustainability Performance of Our Decisions

The Best Practice Price Sustainability Metrics

in The International Journal of Social Quality

Private and societal costs have their origin in the classic and neo-classic era. The market, based on private costs, ignores externalities, while actors fail to gain access to information on societal costs, causing a gap. The best practice price (BPP), a sustainability metric, can fill this information gap. Based on science and the weighted opinions of stakeholders, best practices for basic production factors such as land, labor, and natural resources are identified and their costs calculated. Producers can use these data to calculate the BPP of their products. Besides the market price (the price to be paid), the BPP is mentioned on the invoice and price tag as representing the costs of production according to the best practices. The ratio of market price (MP) to the BPP ‒ the BP ratio (BPR) – makes comparison of different products possible. Using the BPR, producers, public entities, and consumers can set goals for sustainable production or consumption.