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True Cost of Accounting in Finance, Food and Farming

October 03, 2016 |





Multiple crises – from the now chronic economic crisis, through the alarming increase of nutrition- related diseases and antibiotic resistance, to climate change challenging farming’ viability in several areas – call for a radical change in measuring, and consequently, taking informed decisions on full costs and benefits. ‘Profit’ needs to be re-defined in order to overcome perverse incentives in the investment-, food- and farming sector. Sustainable development depends on our ability to correctly account for economic, environmental and social costs, risks and dependencies, and integrate them into a single decision-making tool.

Several initiatives have emerged in the last few years, with a view to support this emerging need, including: the Natural Capital Protocol (NCP), Social Capital Protocol (SCP) and The Environmental and Economics of Biodiversity for Food and Agriculture (TEEB AgFood), as well as several overviews and guidance documents of the World Business Consortium for Sustainable Development (WBCSD). While these initiatives offer harmonized frameworks for businesses, the choice of metrics is left open to users. In paryicular, Small and Medium Enterprises (SMEs) need guidance on Key Performance Indicators to use for assessing and monetizing societal impact of their operations.

Download the position paper here.

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