Developing integrated accounting standards for the food and farming sector
Standard accounting and economic evaluation systems do not take full account of all four capitals − produced, natural, social and human − that are involved in the production, processing, marketing and consumption of food, and related services. This means that businesses and other actors are often not held liable for the negative externalities of their activities. Instead, the costs are often borne by society, and the environment. Examples include paying more for clean water due to the cost of removing pesticides from water sources, or higher prices for food due to reduced harvests from poorly managed soils.
Some costs, such as environmental degradation, extinct species, or climate change, are often deferred to future generations, or borne by local communities and regions far removed from the source of the problem. Unsustainable food systems can therefore be attributed, in large part, to the failure of current economic systems and accounting standards to redress such injustices by pursuing “the polluter pays” and other approaches to internalise these non-financial costs.
This body of work seeks to contribute to the emergence of integrated valuation frameworks at both the level of individual businesses, as well as the overarching public policies, regulatory frameworks, and monitoring and reporting systems, that govern the agri-food sector.