True Cost Accounting (TCA) is an accounting approach that measures and values the hidden impacts of economic activities on the environment, society and health. TCA is also referred to as “full cost accounting” (FCA) or “multiple capital accounting (MCA)”.[1] The approach moves beyond purely economic thinking with the aim of improving decision-making in commercial organizations and in public policy. It includes accounting for natural capital, human capital, social capital and produced capital.
The True Cost Accounting approach can be applied to every sector of the economy. It aims to reveal the impacts of economic activities on society as a whole, in addition to the private costs directly incurred by producers and consumers. These can be environmental, health or social impacts that are not reflected in the market prices of products and services, i.e. not included in the operational profit and loss accounts, and so are regarded as hidden.[2][3] True Cost Accounting is of particular relevance for agrifood systems (food and non-food agricultural products), where hidden costs can be substantial. Indeed, much of the development of TCA has historically been in the context of food.[4][5][6][7]
- ^ "The Evaluation Framework". The Economics of Ecosystems and Biodiversity. Retrieved 2024-01-07.
- ^ "In Brief to The State of Food and Agriculture 2023: Revealing the true cost of food to transform agrifood systems". FAODocuments. doi:10.4060/cc7937en. Retrieved 2024-01-07.
- ^ "Scientific and Economic Foundations Report". The Economics of Ecosystems and Biodiversity. Retrieved 2024-01-07.
- ^ "The State of Food and Agriculture 2023: Revealing the true cost of food to transform agrifood systems". FAODocuments. doi:10.4060/cc7724en. Retrieved 2024-01-07.
- ^ "True cost accounting applications for agrifood systems policymakers: Background paper for The State of Food and Agriculture 2023". FAODocuments. doi:10.4060/cc8341en. Retrieved 2024-01-07.
- ^ Hendriks, Sheryl; de Groot Ruiz, Adrian; Acosta, Mario Herrero; Baumers, Hans; Galgani, Pietro; Mason-D’Croz, Daniel; Godde, Cecile; Waha, Katharina; Kanidou, Dimitra (2023), von Braun, Joachim; Afsana, Kaosar; Fresco, Louise O.; Hassan, Mohamed Hag Ali (eds.), "The True Cost of Food: A Preliminary Assessment", Science and Innovations for Food Systems Transformation, Cham: Springer International Publishing, pp. 581–601, doi:10.1007/978-3-031-15703-5_32, ISBN 978-3-031-15703-5, retrieved 2024-01-07
- ^ Barbara Gemmill-Herren; Lauren E. Baker; Paula A. Daniels, eds. (2021-06-23). True Cost Accounting for Food: Balancing the Scale. London: Routledge. doi:10.4324/9781003050803. ISBN 978-1-003-05080-3.