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Methodologies for true cost accounting in the food sector

Abstract

The recent development of true cost accounting (TCA) methodologies by various organizations has helped increase transparency in the food sector, but has also made it difficult to compare the results obtained through different methodologies. Here we review major TCA methodologies across five functional units that their assessment framework(s) apply to—namely product, organization, system, geography and investment. Our results show that the bulk of existing frameworks apply to products and/or organizations. According to publicly available documents and case studies published by the framework proponents, we found measurements of externality/dependency, the inclusion of economic, environmental and social effects, as well as the use of comparable metrics to be areas of general consensus; suggested indicators, monetization and aggregation emerged as areas of general divergence. The differences between TCA methodologies identified in this study indicate that collaboration between frameworks is key to their harmonization, ultimately making results more comparable and facilitating engagement in TCA.

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Fig. 1: Dimensions of different capital frameworks.
Fig. 2: Scope relationship between different functional units.

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Acknowledgements

This research was made possible through the support of the True Cost Accounting Accelerator, a project of the Global Alliance for the Future of Food.

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Correspondence to Reinier de Adelhart Toorop.

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Competing interests

R.d.A.T., J.B. and A.d.G.R. are currently employed by the Impact Institute, which developed the IP&L methodology mentioned in this work. They are also involved in the development of the True Price methodology. Additionally, A.d.G.R. worked on case studies for TEEBAgriFood, also cited in this work. J.Y. and M.W. declare no competing interests.

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de Adelhart Toorop, R., Yates, J., Watkins, M. et al. Methodologies for true cost accounting in the food sector. Nat Food 2, 655–663 (2021). https://doi.org/10.1038/s43016-021-00364-z

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