What is that?

True Cost Accounting (TCA), sometimes also called Full Cost Accounting, is a system of cost accounting in which the true costs of a product or service are fully measured. The social and ecological costs are included as external costs in the product price.

Sounds complicated? What is it good for?

Let’s start from the beginning: Both conventional and organic farming have an impact on:

1. 1. The natural environment: Through irrigation, fertilization, soil cultivation, use of pesticides, deforestation and much more.
   2. The people: Through the use of substances that have an impact on health and through the prevailing working conditions.

These impacts cause costs, but these are not reflected in the price of the product. This means that nobody is paying for the polluted environment or the social damage - neither the companies that cause them nor you as a consumer in the supermarket.

An example

Let's assume that one liter of olive oil would pollute 100 liters of water. How much are these polluted 100 liters of water worth? True Cost Accounting tries to find out exactly this and then includes these costs in the product price. This could mean that a liter of olive oil might become more expensive.

The questions from TEIKEI

TEIKEI asked itself the following questions:

1. 1. How much environmental and social cost do we cause?
   2. How much more would our olive oil have to cost?
   3. How can we give something back to nature?

For this purpose, extensive data was collected directly from the farmer and values were determined in the areas of soil erosion, water pollution, water consumption, substance use, transport and emissions. With the help of true cost accounting, these costs were then given a monetary value.

The results

It turns out that TEIKEI Olive not only has very little negative environmental impact through its regenerative agriculture management method, but actually gives something back to nature. This happens in particular by building up soil through permanent planting, natural fertilization and minimal tillage. While olive groves in Greece are generally very susceptible to erosion, the exact opposite happens with TEIKEI farmers! In fact, we even bind more CO₂ than we emit.

Costs and benefits

Like all foodstuffs, TEIKEI Olive's olive oil causes costs for nature. However, these costs are not only paid for, but are even compensated with a calculated value of almost 13 cents per liter more than would be necessary. Regenerative agriculture works!

Room for further research

The topic of true cost accounting is new and highly complex. We have managed to get a rough estimate of the impact of our actions. However, this is not enough for us and we want to know much more about our interaction with nature in order to continuously improve. We will keep at it!

The entire master thesis by Selina Wolf, who interviewed us on this topic, can be found at this link.