Data strategy for True Cost Accounting

The overarching vision for True Cost Accounting (TCA) is to serve as a catalyst for transitioning to a sustainable economic foundation. In the agri-food system space, TCA is implemented at different levels – including national, community, business and household levels – each with distinct implications for data collection and governance. As TCA evolves, its success will depend on our ability to create a data strategy that is transparent and secure and also encourages collective efforts in obtaining and sharing high-quality data, allowing for the broad utilization of data for public good while safeguarding the interests and rights of all stakeholders.

While the analytical framework of TCA, the TEEBAgriFood Evaluation Framework (TEEB 2018)*, is a public good, it remains to be seen to what extent TCA will be embraced by local, national and transnational decision-makers as part of a mandatory accounting practice and what that entails in terms of TCA’s implementation methodology. In particular, data sharing, confidentiality, and proprietary are among the obstacles to making TCA implementation methodology a public good entirely. For example, farmers may be concerned about disadvantageous positions in price negotiations with business-to-business (B2B) customers if their production costs information (necessary for calculating true costs) are shared publicly. However, the degree to which TCA data, both primary and secondary, are made openly accessible (with personally identifiable information removed) is a crucial enabling condition for TCA to be considered and implemented widely. This is particularly true for advocacy and accountability, such as holding corporations and policy makers responsible for their sustainability claims and lack of actions. For example, civil society organizations need access to reliable data to verify whether companies are following through on their climate commitments or complying with sustainability standards. Without transparent and accessible data, it becomes challenging to assess the legitimacy of corporate claims or detect greenwashing practices. In this context, making TCA data more accessible can strengthen public oversight and foster a culture of accountability that is essential for advancing sustainable development.

The step-by-step guide for implementing the TEEBAgriFood Evaluation Framework recommends that assessments (e.g. case studies) be made available via the TCA Inventory** and contribute to a collective resource that over time strengthens and mainstreams the application of the Framework. To realize this vision, we propose two immediate actions needed to bring cohesion across collective efforts related to TCA data: (i) establishing a data collection guide, and (ii) developing a data governance strategy.

The data collection guide will firstly need to define a standardised TCA methodology tailored to specific purposes and sectors, e.g., defining key externalities to be considered and corresponding indicators for impact measurement and true cost modeling. Secondly it will need to provide authoritative guidance on the protocol for data collection, documentation (e.g., meta-data template), and quality control, complying with institutional review board (IRB) requirements. It should be initiated by international bodies and prepared by subject experts, building on already existing guidelines and initiatives (e.g., EU’s Product Environmental Footprint and the Organisation Environmental Footprint), and should be peer reviewed. A standardised TCA methodology (e.g., variables and indicators) and data collection methods (e.g., sampling methods, sample sizes, inclusion and exclusion criteria, format of qualitative and quantitative data, etc.) would strengthen stakeholder’s trust into the results by preventing organizations from arbitrarily selecting what to measure and how. Consistent data collection methods and standardization of data formats would help enable the utilization of data by users and might promote the uptake of TCA, e.g., due to reduced time for data harmonization. 

A data governance strategy for TCA, with input from knowledge management professionals, should establish protocols to ensure a consistent approach to the creation, use, citation/acknowledgement, evaluation, and control of data. It will outline terms and mechanisms that govern data management, sharing, accreditation, and related procedural/administrative issues, including the mandate of an institutional host of the database, its linkage to the TCA Community of Practice, and the funding modality. Its role in protecting sensitive information is crucial for building and maintaining trust among data providers and users. Attention should be given to innovative digital solutions to streamline data entry and management processes, avoiding the need to enter the same data for multiple audits/reports, and making the curation and use of available data more efficient.

Mainstreaming TCA helps create an enabling environment for sustainable food system transformation. As the approach continues to gain traction, we expect to see more refined methodologies and more case studies (and associated datasets). The momentum is building for TCA to be adopted more widely and sorting out ways to better coordinate data collection efforts and ensure effective governance of data collection, management, and sharing is a critical next step.

Acknowledgement:

The author would like to thank Kristin Davis (IFPRI) and Olivia Riemer (TMG Research) for helpful comments.

* The Economics of Ecosystems and Biodiversity (TEEB) (2018). TEEB for Agriculture & Food: Scientific and Economic Foundations. Geneva: UN Environment.

** The True Cost Accounting (TCA) Inventory from 2020 was a collection of evaluation frameworks, resources, databases, case studies, approaches, and additional information useful for researchers, civil society organizations, policy makers, farmers, and the private sector when conducting a TCA or TEEBAgriFood assessment.