Skip to main content

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

Measures of equity for multi-capital accounting

Abstract

Inequity is one of the primary economic and societal risks posed by the global food system, yet measures of inequity are missing from prominent corporate tools that aim to account for the impact of the economic activities associated with food production, manufacturing and retail. Here we suggest new metrics to measure socio-economic, gender, racial, generational and risk divides between the bearers of natural, social and human capital costs and those of benefits.

This is a preview of subscription content

Access options

Rent or Buy article

Get time limited or full article access on ReadCube.

from$8.99

All prices are NET prices.

Fig. 1: A common approach to valuation of impacts.
Fig. 2: Disaggregated natural capital and social and human capital costs and benefits.
Fig. 3: Comparison of hypothetical cocoa product value chains A and B.

Data availability

The datasets generated during the current study are available in the Oxford Research Archive at https://ora.ox.ac.uk/objects/uuid:50c88e3a-071e-4835-a8af-9ceb945c496e. HDI and GII data are publicly available from the UNDP at http://hdr.undp.org/en/data.

Code availability

The code generated during the current study to implement optimal transport and calculate SES and SES-G statistics is available in the Oxford Research Archive at https://ora.ox.ac.uk/objects/uuid:50c88e3a-071e-4835-a8af-9ceb945c496e and can be used under the Creative Commons Attribution 2.0 (CC BY 2.0) license.

References

  1. 1.

    Rosenzweig, C. et al. Climate change responses benefit from a global food system approach. Nat. Food 1, 94–97 (2020).

    Article  Google Scholar 

  2. 2.

    Parris, K. Sustainable Management of Water Resources in Agriculture (OECD, 2010).

  3. 3.

    Kanter, D. R. & Brownlie, W. J. Joint nitrogen and phosphorus management for sustainable development and climate goals. Environ. Sci. Policy 92, 1–8 (2019).

    CAS  Article  Google Scholar 

  4. 4.

    Micha, R. et al. 2020 Global Nutrition Report: Action on Equity to End Malnutrition (Development Initiatives, 2020).

  5. 5.

    IPCC Special Report on Climate Change and Land (eds Shukla, P. R. et al.) (IPCC, 2019).

  6. 6.

    Castañeda, A. et al. Who Are the Poor in the Developing World? (World Bank, 2016).

  7. 7.

    Roe, D., Seddon, N. & Elliott, J. Biodiversity Loss is a Development Issue: A Rapid Review of Evidence (International Institute for Development, 2019).

  8. 8.

    Füssel, H.-M. How inequitable is the global distribution of responsibility, capability, and vulnerability to climate change: a comprehensive indicator-based assessment. Glob. Environ. Change 20, 597–611 (2010).

    Article  Google Scholar 

  9. 9.

    Perez-Escamilla, R. et al. Nutrition disparities and the global burden of malnutrition. Br. Med. J. 361, k2252 (2018).

    Article  Google Scholar 

  10. 10.

    Rosa, L. et al. Global agricultural economic water scarcity. Sci. Adv. 6, eaaz6031 (2020).

    ADS  Article  Google Scholar 

  11. 11.

    Dhingra, S. & Silvana, T. The Rise of Agribusiness and the Distributional Consequences of Policies on Intermediated Trade (Centre for Economic Policy Research, 2020).

  12. 12.

    Crivelli, E., de Mooij, R. A. & Keen, M. Base Erosion, Profit Shifting and Developing Countries Working Paper No. 15/118 (International Monetary Fund, 2015).

  13. 13.

    The State of Food and Agriculture 2013 (FAO, 2013).

  14. 14.

    The Business Case for Investment in Nutrition (Chatham House, 2020).

  15. 15.

    Ebi, K. L. & Hess, J. J. Health risks due to climate change: inequity in causes and consequences. Health Aff. 39, 2056–2062 (2020).

    Article  Google Scholar 

  16. 16.

    Islam, S. N. & Winkel, J. Climate Change and Social Inequality (UN, 2017).

  17. 17.

    Eccles, R. G., Krzus, M. P. & Ribot, S. Meaning and momentum in the integrated reporting movement. J. Appl. Corp. Finance 27, 8–17 (2015).

    Article  Google Scholar 

  18. 18.

    Unerman, J., Bebbington, J. & O’dwyer, B. Corporate reporting and accounting for externalities. Account. Bus. Res. 48, 497–522 (2018).

    Article  Google Scholar 

  19. 19.

    Willett, W. et al. Food in the Anthropocene: the EAT–Lancet commission on healthy diets from sustainable food systems. Lancet 393, 447–492 (2019).

    Article  Google Scholar 

  20. 20.

    Andersen, I. et al. Defining ‘science-based targets’. Natl Sci. Rev. https://doi.org/10.1093/nsr/nwaa186 (2020).

  21. 21.

    The KPMG Survey of Sustainability Reporting 2020: The Time has Come (KPMG, 2020).

  22. 22.

    PRI Why and How Investors Can Respond to Income Inequality (UNEP Finance Initiative, 2018).

  23. 23.

    Sachs, J. et al. Fixing the Business of Food. How to Align the Agrifood Sector with the SDGs (Barilla Foundation, UN Sustainable Development Solutions Network, Columbia Center on Sustainable Investment & Santa Chiara Lab University of Siena, 2020).

  24. 24.

    OECD Business and Finance Outlook 2020: Sustainable and Resilient Finance (OECD, 2020).

  25. 25.

    Negra, C. et al. Sustainable agri-food investments require multi-sector co-development of decision tools. Ecol. Indic. 110, 105851 (2020).

    Article  Google Scholar 

  26. 26.

    Fletcher, L. Food businesses bank on sustainability-linked loans. Financial Times (24 September 2020); https://www.ft.com/content/d0c721fc-2eae-4501-b95b-1660c81b05ed

  27. 27.

    2018 Global Sustainable Investment Review (Global Sustainable Investment Alliance, 2018); http://www.gsi-alliance.org/wp-content/uploads/2019/03/GSIR_Review2018.3.28.pdf

  28. 28.

    Annual Impact Investor Survey 2020 (Global Impact Investing Network, 2020).

  29. 29.

    Green Bonds Global State of the Market 2019 (Climate Bonds Initiative, 2020).

  30. 30.

    Poh, J. AB InBev signs record $10.1 billion ESG-linked facility. Bloomberg (18 February 2021); https://www.bloomberg.com/news/articles/2021-02-18/ab-inbev-signs-10-billion-loan-tied-to-sustainability-targets

  31. 31.

    Rising Trust in Sustainability Reporting Around the World (GlobeScan & GRI, 2020); https://globescan.com/rising-trust-sustainability-reporting/

  32. 32.

    Malik, S. Meet investors halfway with better ESG reporting. Forbes (3 April 2020); https://www.forbes.com/sites/forbestechcouncil/2020/04/03/meet-investors-halfway-with-better-esg-reporting/?sh=1bf697b1226b

  33. 33.

    Growing Better: Ten Critical Transitions to Transform Food and Land Use (Food and Land Use Coalition, 2019).

  34. 34.

    Better Finance, Better Food: Investing in the New Food and Land Use Economy (Blended Finance Taskforce, 2020).

  35. 35.

    Blisard, W. N. & Blaylock, J. R. Construction of true cost of food indexes from estimated Engel curves. Am. J. Agric. Econ. 73, 775–783 (1991).

    Article  Google Scholar 

  36. 36.

    Pretty, J. N. et al. Farm costs and food miles: an assessment of the full cost of the UK weekly food basket. Food Policy 30, 1–19 (2005).

    Article  Google Scholar 

  37. 37.

    The true cost of food. Nat. Food 1, 185 (2020).

    Article  Google Scholar 

  38. 38.

    Tol, R. S. J. The economic impacts of climate change. Rev. Environ. Econ. Policy 12, 4–25 (2018).

    Article  Google Scholar 

  39. 39.

    de Groot, R. et al. Global estimates of the value of ecosystems and their services in monetary units. Ecosyst. Serv. 1, 50–61 (2012).

    Article  Google Scholar 

  40. 40.

    Food Justice: The Report of the Food and Fairness Inquiry (Food Ethics Council, 2010).

  41. 41.

    TEEB for Agriculture & Food: Scientific and Economic Foundations (TEEB, 2018).

  42. 42.

    Westhoek, H. et al. Food Systems and Natural Resources (UNEP, 2016).

  43. 43.

    Kawachi, I., Subramanian, S. V. & Almeida-Filho, N. A glossary for health inequalities. J. Epidemiol. Commun. Health 56, 647–652 (2002).

    CAS  Article  Google Scholar 

  44. 44.

    Ortiz-Ospina, E. & Molteni, M. What Are PPP Adjustments and Why Do We Need Them? (Our World in Data, 2017); https://ourworldindata.org/what-are-ppps

  45. 45.

    Human Development Index (UNDP, 2020); http://hdr.undp.org/en/content/human-development-index-hdi

  46. 46.

    Gender Inequality Index (UNDP, 2020); http://hdr.undp.org/en/content/gender-inequality-index-gii

  47. 47.

    Galichon, A. Optimal Transport Methods in Economics (Princeton Univ. Press, 2016).

  48. 48.

    A New Vision of Value (KPMG International Cooperative, 2014).

  49. 49.

    Total Value: Impact Valuation to Support Decision-making (Ernst & Young, 2016).

  50. 50.

    Total Impact Measurement and Management (PWC, 2020); https://www.pwc.com/gx/en/services/sustainability/total-impact-measurement-management.html

  51. 51.

    Coulson, A. B. KPMG’s true value methodology: a critique of economic reasoning on the value companies create and reduce for society. Sustain. Account. Manage. Policy J. 7, 517–530 (2016).

    Google Scholar 

  52. 52.

    Lord, S. Valuing the Impact of Food: Towards Practical and Comparable Monetary Valuation of Food System Impacts (Food System Impact Valuation Initiative, 2020).

  53. 53.

    Cohen, F., Hepburn, C. J. & Teytelboym, A. Is natural capital really substitutable? Annu. Rev. Environ. Resour. 44, 425–448 (2019).

    Article  Google Scholar 

  54. 54.

    Voora, V., Bermudez, S. & Larrea, C. Global Market Report: Cocoa (International Institute for Sustainable Development, 2019).

  55. 55.

    Cargill building $100 million cocoa facility in Indonesia. Reuters (8 May 2012); https://www.reuters.com/article/cargill-cocoa-indonesia/cargill-building-100-million-cocoa-facility-in-indonesia-idUSL2N0DO2FJ20130507

  56. 56.

    Barry Callebaut Opens Brand New 100,000 Tonne Chocolate Factory in Mexico (Barry Callebaut, 2009); https://www.barry-callebaut.com/en/group/media/news-stories/barry-callebaut-opens-brand-new-100000-tonne-chocolate-factory-mexico

  57. 57.

    Markowitz, H. M. & Todd, G. P. Mean-Variance Analysis in Portfolio Choice and Capital Markets (Wiley, 2000).

  58. 58.

    Headey, D. & Shenggen, F. Reflections on the Global Food Crisis (International Food Policy Research Institute, 2010).

  59. 59.

    AlphaBeta Valuing the SDG Prize in Food and Agriculture: Unlocking Business Opportunities to Accelerate Sustainable and Inclusive Growth (Business and Sustainable Development Commission, 2016).

  60. 60.

    Bosc, P.-M. et al. Investing in Smallholder Agriculture for Food Security: A Report by the High Level Panel of Experts on Food Security and Nutrition (Committee on World Food Security, 2013).

  61. 61.

    Leveraging Small and Medium Enterprises to Improve Nutrition (FAO & GAIN, 2018).

  62. 62.

    Akkermans, D. H. Net profit flow per country from 1980 to 2009: the long-term effects of foreign direct investment. PLoS ONE 12, e0179244 (2017).

    Article  Google Scholar 

  63. 63.

    Ricke, K. et al. Country-level social cost of carbon. Nat. Clim. Change 8, 895–900 (2018).

    ADS  CAS  Article  Google Scholar 

  64. 64.

    The Changing Landscape of Agricultural Markets and Trade: Prospects for Future Reforms (OECD, 2019).

  65. 65.

    Growing support for valuing ecosystems will help conserve the planet. Nature 591, 178 (2021).

  66. 66.

    Akerloff, G. et al. Economists’ statement on carbon dividends. Wall Street Journal (16 January 2019).

Download references

Author information

Affiliations

Authors

Contributions

S.L. conceived the article, performed the research and wrote the article. J.S.I.I. contributed to content, research and writing of the article.

Corresponding author

Correspondence to Steven Lord.

Ethics declarations

Competing interests

S.L. receives funding from the Food System Impact Valuation Initiative. The Food System Impact Valuation Initiative is funded by the Global Alliance for the Future of Food, Compassion in World Farming UK, World Business Council on Sustainable Development, the Sir Peter Elworthy Grant Programme, Nestle UK & Ireland, Danone and Yara International. The funders had no role in the conceptualization, design, analysis, decision to publish, or preparation of the manuscript. J.S.I.I. declares no competing interests.

Additional information

Peer review information Nature Food thanks Paul Winters, Valeria Pineiro and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Supplementary Information

Supplementary Discussion

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Lord, S., Ingram, J.S.I. Measures of equity for multi-capital accounting. Nat Food 2, 646–654 (2021). https://doi.org/10.1038/s43016-021-00336-3

Download citation

Search

Quick links

Nature Briefing

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

Get the most important science stories of the day, free in your inbox. Sign up for Nature Briefing