– Food production results in hidden impacts for people and planet. Financial auditor EY and sustainability consultant Soil& More have now developed a method for small and medium-sized enterprises to calculate these hidden or ‘external’ costs. To illustrate the method, they calculated the impacts of organic distributor Eosta for nine types of produce and the company as a whole. For soil and health impact, large differences were found between organic and non-organic production. The report was presented at the EAT Food Forum in Stockholm, on 13 June 2017.
The ‘True Cost Accounting in Food, Farming, and Finance’ study calculated the cost of water pollution, pesticide exposure, greenhouse gas emissions, and soil erosion for several types of produce. A comparison was made between organic products and non-organic products. The report includes an Integrated Profit and Loss statement for Eosta, one of the first to be published for a SME company worldwide.
Volkert Engelsman, CEO of Eosta, presented the report to Peter Bakker, President of the World Business Council for Sustainable Development. Bakker commented: “True Cost Accounting changes the definition of profit and tackles perverse incentives. I predict that it will seriously affect the valuation of companies and their access to capital within a few years.”
Volkert Engelsman added: “We need TCA to empower consumers and stakeholders, including the finance sector, to act responsibly and make informed business decisions. It’s a game-changer.”
One of the findings is a difference between organic and non-organic products in health costs as a result of pesticide application. The study combined data from Danish scientist Peter Fantke, the European Food and Safety Authority, and the EcoInvent database to determine the effects of pesticide exposure. The WHO provided the metrics to monetize health impacts. The difference was biggest for apples from Argentina-with an advantage of the organic variety of €0.19 per kilo.
The soil erosion difference was significant as well; on average, organic produce had a positive impact in terms of cost while conventional production had a negative impact. At a consolidated Eosta level, the difference for erosion was €1.8 million.
Thepilot was supported by Triodos Bank and Hivos.Eosta is a leading distributor of organic fruit and vegetables, based in the Netherlands. Nature&More isits”trace & tell” transparency trademark. More information: http://www.natureandmore.comand http://www.eosta.com.
(Immediapress – Adnkronos
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