TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-09-27 Page is: DBtxt003.php txt00017471
Thought Leadership Jeffrey Sachs Jeffrey Sachs, Angelo Riccaboni: Food for Sustainable Development
Burgess COMMENTARY Peter Burgess
Jeffrey Sachs, Angelo Riccaboni: Food for Sustainable Development Sonia Sachs ssachs@ei.columbia.edu via gmail.mcsv.net Food for Sustainable Development All companies in the food sector, both producers and distributors, should adopt clear guidelines, metrics, and reporting standards to align with the Sustainable Development Goals and the Paris Climate agreement. Specifically, each company must address four critical questions. NEW YORK – Feeding a planet of 7.7 billion people is no easy matter. Every person on the planet needs, expects, and has the right to a healthy diet. Every farmer needs, expects, and has the right to a decent livelihood. The roughly ten million other species on the planet need a habitat in which they can survive. And every business that produces, processes, and transports food needs and expects to earn a profit. It’s a tall order – and it’s not being fulfilled. Over 820 million people are chronically hungry. Another two billion or so suffer from micronutrient deficiencies, such as a lack of vitamins or proteins. Around 650 million adults are obese, an epidemic caused in part by ultra-processed foods that are stuffed with sugar, saturated fats, and other chemical additives. But the problems go far beyond hunger and diet. Today’s agro-industrial practices are the main cause of deforestation, freshwater depletion and pollution, soil erosion, and the collapse of biodiversity. To top it off, human-induced climate change, partly caused by the food sector, is wreaking havoc on crop production. With more warming and population growth ahead, the crisis will worsen unless decisive changes are made. The food industry is a powerhouse of the global economy and includes some of the best-known brand names, because we connect with them every day. Solving the many intersecting food crises will be impossible unless the food industry changes its ways. Fortunately, there is an important glimmer of hope. A growing number of food companies understand the challenge and want to forge a new direction that is consistent with human health and planetary survival. We have been asked by some of these industry leaders, convened by the Barilla Foundation, to help identify the steps needed to align the food sector with sustainable development. Our starting point is another source of hope. In 2015, all 193 members of the United Nations agreed unanimously to two vital agreements. The first, called Agenda 2030, adopts 17 Sustainable Development Goals (SDGs) as a roadmap to human wellbeing and planetary safety. The second, the Paris climate agreement, commits the world’s governments to taking decisive action to keep global warming to less than 1.5º Celsius. Both the SDGs and the Paris agreement require decisive changes in practices by the food industry. In our report, we call on all companies in the food sector, both producers and distributors, to adopt clear guidelines, metrics, and reporting standards to align with the global goals. Specifically, each company must address four critical questions. First, do the companies’ products and strategies contribute to healthy and sustainable diets? We know that the fast-food culture is literally killing us. The industry has to change, urgently, to promote healthy diets. Second, are the company’s production practices sustainable? Too many companies are engaged in chemical pollution, massive waste from packaging, deforestation, excessive and poorly targeted fertilizer use, and other environmental ills. Third, are the company’s upstream suppliers sustainable? No consumer food company should use products from farms that contribute to deforestation. The destruction of forests in the Amazon and Indonesia – literally a scorched-earth process – underscore the need to barcode all food products to ensure that they are sourced from sustainable farms. Lastly, is the company a good corporate citizen? For example, aggressive tax practices that seek to exploit legal loopholes or weak enforcement processes should be avoided, as they deprive governments of the revenues needed to promote public services and thereby achieve the SDGs. As part of our work, we examined the food industry’s current reporting practices. While many companies purport to pursue sustainable development, too few report on the healthfulness of their product lines or how their products contribute to healthy and sustainable dietary patterns. Too few recognize that they are part of the environmental crisis, either directly in their own production, or as buyers of products produced in environmental hotspots such as the Amazon or Indonesia. And companies don’t report in detail on their tax practices. In short, the food industry’s commitment to sustainability is still too often more high-minded sentiment than actual reporting and monitoring to ensure alignment with the SDGs and the Paris accord. But we are not pessimistic. Around the world, young people are demanding a sustainable and safe way of living and doing business. We believe that companies, too, will change. After all, companies need customers who are satisfied, workers who are motivated, and the respect of society as a tacit “license to do business.” Some of the cases we analyzed give us hope that change is possible. As our project continues in the coming year, with the aim of working with the industry to ensure that performance, reporting, and monitoring are aligned with sustainable development, we will keep the public informed of what we see and learn. The food sector is a key part of a larger picture. World leaders gathered at the UN this week to review progress – or lack thereof – on the SDGs and the Paris agreement. They must keep in mind one crucial fact: the world’s people are demanding change. We have the know-how and wealth to achieve a prosperous, inclusive, and sustainable world. The business sector must urgently recognize, acknowledge, and act upon its global responsibilities. https://www.project-syndicate.org/commentary/aligning-food-industry-with-sustainable-development-by-jeffrey-d-sachs-and-angelo-riccaboni-2019-09 ----------------------------------------------------------------------- Peter Burgess to Jeffrey, Lisa, Sonia from: Peter Burgess to: Sonia Sachs , Jeffrey Sachs , Lisa Sachs date: Oct 8, 2019, 12:17 PM subject: Re: Jeffrey Sachs, Angelo Riccaboni: Food for Sustainable Development Thank you ... I love this piece, and also the Columbia events of 10 days ago!. It is exactly what I am working to do with TrueValueMetrics.org (TVM). The idea that optimizing for profit in the corporate world is going to get good results for all the essential dimensions of a sustainable world makes no sense, even though it is what investors have been doing all of my adult life-time. It is 25 years since John Elkington first used the phrase Triple Bottom Line (TBL), but we still do not have an easy way of numbering the components (People Planet Profit). With TVM I want t go a step further and that is not only to number the components of the TBL but also to number the component capitals (Social Capital, Natural Capital and Economic Capital). I want to avoid conflating numbering (measuring) with monetization. Numbering should also be clear about the difference between cost, price and value. The market may give a good measure of price, that is the relationship between supply and demand, but rarely is this the same as value. Measurement needs numbers and these should be constants ... grams and meters do not change depending on market conditions ... social capital value, natural capital value and economic capital value likewise should not change though transaction prices can and will change. Many of the underlying ideas of TVM are pulled out of conventional financial accountancy ... especially ideas like the segmentation of accounts between the balance sheet accounts and the profit and loss account accounts, the idea of a reporting entity and the reporting boundary, the rules of consolidation and group accounts, etc. Central in TVM is the important idea that profit may be computed either by looking at the changes in the balance sheet or by aggregating all the debits and all the credits in the P&L account. Managing for SDG progress will be facilitated when key SDG metrics embrace the idea of change in capitals as the core measure of progress. If we look at the idea of 'American exceptionalism', it looks as if it really was largely the conversion of an amazing amount of natural capital (and to some extent social capital) into economic capital. Financing good important things might also be facilitated when there are more metrics that relate to the state of capitals and the change in capitals over time. Last but not least, metrics like TVM may be applied not only for the activities of a business organization but for every element in the socio-enviro-economic system, including for example the place, products, individuals, families, communities. The state (balance sheet) and flow (activity accounts) can be structured to show all the impact through the life cycle of a product, the history and future of a place, the lifetime of a person, etc. Better yet, a relatively small amount of data may be used to enable better decision and more effective accountability than we have at the moment. Information should not only flow from the implementing entity out (what happens now) to a situation where the world sees what the implementing entity is doing and reports on it from the outside! All the bits needed for this exist ... but not all in one place (as far as I know), and are not visible very much in the world's investment community. Thanks you again ... the possibilities are huge! Peter Burgess _____________________________ Peter Burgess ... Founder and CEO TrueValueMetrics ... Meaningful Metrics for a Smart Society True Value Impact Accounting ... Multi Dimension for ALL the Capitals http://www.truevaluemetrics.org LinkedIn: www.linkedin.com/in/peterburgess1/ Slideshare: http://www.slideshare.net/PeterBurgess2/ Twitter: @truevaluemetric @peterbnyc Telephone: 570 202 1739 Email: peterbnyc@gmail.com Skype: peterbinbushkill

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