What’s the true value of true cost accounting?


At Dumfries House, Scotland, in early May 2018, HRH The Prince of Wales and Sustainable Food Trust hosted a convening on the Future of Food and Farming, with the Global Alliance for the Future of Food as a collaborative partner. In connection to its ongoing work on the positive and negative externalities of the food system, the Global Alliance hosted a session on true cost accounting (TCA) with a stellar panel, including: Mark Gough, Natural Capital Coalition; Peter Bakker, World Business Council for Sustainable Development; Satya Tripathi, Sustainable India Finance Facility; Pavan Sukhdev, WWF Fund; Alexander Müller, TEEBAgriFood; and Sunny Verghese, OLAM.

It was a chance for the philanthropic community, as well as a number of other critical influencers in the food systems landscape from a variety of disciplines and institutional affiliations, to better understand the nuances of TCA and its applications to policy, practice, and research. What’s more, it served to identify some of the critical questions we need to be asking about true cost accounting, such as:

  • What is the true value of true cost accounting and how far can it take us? What else is needed?
  • Do we need to move beyond a strict “TCA frame” to a “values and impact frame”?
  • How do we deepen our knowledge and practice vis-à-vis identifying and measuring broader drivers of value creation – human, social, natural, and intangible capitals?
  • How is TCA best applied and used?
  • What’s the advantage of being ahead of the curve in adopting TCA and how do we provide guidance to CEOs, boards, and shareholders?
  • Can we develop and/or integrate tools so that we don’t overburden companies, farmers, and other end users?
  • How do we guide end users regarding what they do with the implications of the results?

“You … assembled an interesting group of players and illustrated well how much work we will need to all do to come up with an aligned set of solutions to fix the broken food system.” Peter Bakker, WBCSD

The gathering “illustrated well how much work we will need to all do to come up with an aligned set of solutions to fix the broken food system,” said one participant. Another noted that it was great to see the progress on true cost accounting as a major building block supporting transitions to sustainable agriculture. The cross-cutting nature of issues among many actors was also highlighted: “it’s suddenly about the planet, and suddenly about equity, and suddenly about health – these three have never aligned before.”

The Dumfries House convening opened the door to the need for a much larger, strategic discussion amongst the “key movers and shakers” of TCA, from the practitioners to the farmers to the policymakers. The Global Alliance is committed to playing a central role in that, with the questions above providing the basis for a GA-hosted strategic convening on TCA in Q1 of 2019, with the ground-breaking TEEBAgriFood Scientific and Economic Foundations Report and early results of the applications of the TEEBAgriFood evaluation framework in hand.

As the TEEBAgriFood Study Leads rightly argue, “Eco-agri-food systems today are being viewed and evaluated through a narrow, incomplete and distorting lens called ‘per-hectare-productivity.’” In fact, there is already more than enough food to feed the world. But “one-third of all food produced is thrown away, and one-third of all land and water in agriculture is used to produce waste.  The true costs of food systems need not exceed their true benefits: we need better information to make better choices.”

Stay tuned for more details about the Global Alliance’s strategic convening on TCA and please contact us if you are interesting in learning more.