True Cost Accounting

True Cost Accounting

True Cost Accounting (TCA) is an innovative method for calculating the impact that food and agricultural activities have on natural, human and social capital – so called business ”externalities”.

Usually these impacts – positive or negative – are not reflected in the prices payed for food and agricultural products. TCA expresses the impacts in monetary terms, making transparent the fact that unsustainable practices have very real costs for people and planet.

We use this form of impact analysis to drive transformation in food and agriculture. Our pioneering work is helping to drive change from the corporate boardroom, to policy-making, acountancy services and farms around the globe.

 

The Costs to Business

Degradation of natural, human and social capital is not only a risk to society, it is a risk to the future viability of food and agricultural businesses.

Financial institutions increasingly recognise that natural capital-related risk directly impacts the future-proofness of a business. Our  TCA methodology helps to quantify externalities and to evaluate future risks and opportunities associated with certain farming practices.

True Cost Accounting at Soil & More

Our TCA assesses externalities with a focus on impacts on natural capital. This includes indicators such as Greenhouse Gas emissions and sequestration, impact on water resources, soil health and biodiversity.

Our True Cost Assessments are based on the framework of the Natural Capital Coalition and on the monetization factors provided by the UN FAO respectively locally customized farm economics. We only use publicly available models and databases (e.g. Cool Farm Tool, CropWat, RUSLE) and provide full transparency about our metrics, assumptions and results.

Our customers use the results of the True Cost Assessment as internal management and forecasting tools, to better manage their risks and capitalize on their opportunities. Others use it for communication purposes, substantiating their claim on sustainability performance.

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