{"id":663810,"date":"2025-04-15T00:00:00","date_gmt":"2025-04-15T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/whats-true-cost-accounting-and-how-is-sekem-becoming-one-of-its-early-adopters-in-egypt\/"},"modified":"2025-04-15T00:00:00","modified_gmt":"2025-04-15T00:00:00","slug":"whats-true-cost-accounting-and-how-is-sekem-becoming-one-of-its-early-adopters-in-egypt","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/whats-true-cost-accounting-and-how-is-sekem-becoming-one-of-its-early-adopters-in-egypt\/","title":{"rendered":"What\u2019s true cost accounting, and how is SEKEM becoming one of its early adopters in Egypt?"},"content":{"rendered":"

E<\/strong>gyptian a<\/strong>gribusiness <\/strong>SEKEM is placing a bold wager on the idea that <\/strong>sustainable <\/strong>agriculture is not just good ethics \u2014 it\u2019s good economics.<\/strong> The company has emerged as one of Egypt\u2019s prominent advocates for true cost accounting (TCA), a framework that captures the full environmental, health, and social costs embedded in agricultural production and translates them into monetary terms. The goal, says SEKEM\u2019s CEO Helmy Abouleish in comments to EnterpriseAM, is simple \u2014 reprice food in a way that reflects its real cost to society, not just what consumers pay at the till.<\/p>\n

In a wide-ranging conversation with EnterpriseAM, Abouleish outlined SEKEM\u2019S<\/strong> approach to embedding TCA into its entire value chain<\/strong>, its impact on long-term decision-making, and why he believes Egypt could become a leader in the regional transition to sustainable agriculture.<\/p>\n

SOUND SMART- <\/strong>True cost accounting is a systems-based methodology grounded in frameworks developed by institutions like the UN Food and Agriculture Organization<\/a>. It quantifies externalities that markets typically ignore, including soil degradation, CO2 emissions, and long-term health costs, as well as positive social outcomes like rural livelihoods and employment quality.<\/p>\n

THE BUSINESS CASE FOR TCA ADOPTION-<\/p>\n

SEKEM\u2019s decision to adopt TCA was driven by its ability to reveal what Abouleish <\/strong>describes as a \u201cproactive and potentially more cost-effective\u201d path to agriculture.<\/strong> \u201cThrough the true cost accounting methodology, we discovered that organic and biodynamic products are actually cheaper when we factor in the hidden and externalized costs,\u201d he tells us. \u201cThese costs include impacts on health, society, and the environment, such as water usage and CO2 emissions. If these costs are properly accounted for, organic products become the more economical choice.\u201d The aim, he says, is \u201cto enhance decision-making processes for policymakers, businesses, farmers, investors, and consumers alike.\u201d<\/p>\n

Why it matters: <\/strong>Abouleish emphasizes that TCA doesn\u2019t directly improve environmental outcomes, but it helps measure them. The real benefits lie in organic and biodynamic farming, which reduce environmental harm, lower emissions, and conserve water. These methods also carry health advantages by limiting exposure to pesticide residues and contribute to rural development by creating better-paying jobs.<\/p>\n

PUTTING THE MODEL TO WORK-<\/p>\n

SEKEM adopts true cost accounting throughout its product portfolio<\/strong> \u2014 ranging from food and textiles to healthcare and spices. The group sees strong market potential in four key categories:<\/p>\n