According to the UK’s Sustainable Food Trust, we pay for food in many ways, not just at the checkout. The true cost varies according to how food is produced and how this impacts our health and the environment.
True Cost Accounting (TCA) in food and agriculture is about assessing the true costs and benefits of different food production systems. For example, many food production systems have damaging impacts on the environment, animal welfare and public health. These impacts are rarely accounted for and are not paid for by the producer or the customer.
A recent review of the TCA frameworks and guidelines, published by Springer Open Access, highlights issues of social equity in TCA.
TCA usually falls under Environmental, Social and Governance (ESG) or sustainability reporting.
However, the review, titled Social Equity in True Cost Accounting of Food, says that societal expectations on human rights and ethical conduct in food production and consumption remain only half met by companies’ ESG practices worldwide.
The review also found that organisations can struggle to apply the TCA frameworks and guidelines, especially when attempting to capture multiple, equity-related values.
About the review
The purpose of the review was to:
- examine how equity-related issues are addressed in the TCA frameworks and guidelines
- analyse the methods used to measure and value equity and inequity in the agrifood sector
- identify gaps and shortcomings
- offer preliminary suggestions to advance the consideration of equity in future applications of TCA.
Our Director, Carl Obst, was a co-author of the review. Carl says:
‘Making progress on sustainable development for all requires that we design and implement solutions that are both holistic and context specific. This means the solutions must recognise all aspects – environmental, economic and social – and accept the challenge that one size does not fit all. This review demonstrates that there are plenty of good ideas to allow designing solutions but implementation requires all of us to connect beyond our silos of expertise.’
As one part of building those connections, the authors of the review suggest that, in order to assess equity related outcomes, the various frameworks and guides need to present richer information in the form of:
- indicators
- situational analysis
- suitable statistics
- aggregate indices
Constructing this type of information can be well-supported through the use of true cost accounting and will, in turn, guide investment and policy development.
Central to adopting a holistic approach is the social capital pillar of true cost accounting as part of completing an integrated capitals approach. With this integration in mind, the review suggests that indicators and other information must be:
- customised to the needs of different social groups
- links to rights-based outcomes.
You can download the review here.
We are excited to let you know that this review has been provisionally selected for the Best Innovator Award under the Global Innovators Awards 2025. We’ll keep you posted on its progress through the selection process. Fingers crossed!