Evidence-based methodologies for environmental externalities accounting and value chain sustainability
FAO’s work on environmental externalities accounting and value chain sustainability aims to develop innovative tools and methodologies that support evidence-based, multi-criteria decision-making in agrifood systems. It promotes the integration of environmental externalities and socioeconomic dimensions into investments, policies and projects across agrifood systems value chains.
This work is led by the Environmental eXternalities ACcounting Tool (EX-ACT) team within FAO’s Agrifood Economics and Policy Division, which supports FAO Member Countries and external stakeholders by developing and applying several key instruments, including EX-ACT, the value chain sustainability tool and methodologies related to food loss and waste, as well as the bioeconomy.
The Environmental eXternalities ACcounting Tool (EX-ACT)
The Environmental eXternalities ACcounting Tool (EX-ACT) makes evaluation of environmental externalities digital and more accessible. It allows users to work online, manage data efficiently, and collaborate across teams and institutions, simplified and flexible reporting and monitoring.
The FAO Environmental eXternalities ACcounting Tool (EX-ACT) team is responsible for the development and deployment of methodologies targeting the economic and non-economic quantification of value chain sustainability and environmental externalities. In particular:
- Evidence-based methodology development: Evidence-based tools and methodologies are designed to meet stakeholder needs and to embed sustainability considerations into conventional decision-making frameworks, promoting a more holistic and integrated approach to agrifood system planning and evaluation.
- Capacity building: Tailored training sessions and workshops are provided for partners, decision-makers and technical experts. These activities include hands-on exercises, field visits and real case studies that build practical skills in scenario analysis, data management and sustainability reporting. Participants are equipped to independently apply EX-ACT tools in investment planning, policy design and project monitoring.
- Project analysis: The EX-ACT assesses the impact of agrifood systems interventions on environmental externalities and value chain sustainability. Analyses may cover individual projects, national programmes, policies or investment portfolios. Appraisals can be conducted ex ante (design), during implementation (monitoring), or ex post (evaluation).
- Quality control: Technical support and quality control are provided to ensure the correct and consistent application of EX-ACT tools, including methodology review, validation of results and harmonization across different contexts.
The EX-ACT team contributes to FAO’s decision-making processes in collaboration with other divisions, including the Land and Water Division (NSL), the Animal production and Health Division (NSA), the Office of Climate and Biodiversity (OCB) and the Forestry Division (NFO). Through these partnerships, the development and application of EX-ACT tools and methodologies are strengthened across FAO and among external stakeholders.
This work directly contributes to the implementation of FAO’s Strategic Framework, particularly on the Programme Priority Areas (PPAs): BE1 – Climate change mitigating and adapted agrifood systems; BE3 – Biodiversity and ecosystem services for food and agriculture; BP1 – Innovation for sustainable agriculture production; and BL6 – Scaling up Investment.
The EX-ACT team also collaborates with major international financial institutions (IFIs) and development partners, such as the World Bank, the International Fund for Agricultural Development (IFAD), the Global Environment Facility (GEF) and the Green Climate Fund (GCF). The EX-ACT methodology is furthermore endorsed or recommended in several key guidance documents, including:
- WBG Scorecard FY24-FY30 : Methodology Note - WBG Client Context and Vision Indicators (World Bank, 2025)
- Common Principles for Climate Mitigation Finance Tracking (World Bank, 2023)
- Annexes to Implementing the Green Economy (European Bank for Reconstruction and Development, 2024)
- EIB Project Carbon Footprint Methodologies (European Investment Bank, 2023)
- Materials on Development Finance GHG Accounting Methodology (KfW Development Bank, 2022)
- Guidelines on core indicators and sub-indicators (Global Environmental Facility, 2019)
RELEVANT PUBLICATIONS
NEWS
EX-ACT year in review: Over 4 000 global users in 2025
30/01/2026
Since its launch in October 2024, the Environmental eXternalities ACcounting Tool (EX-ACT) web application has seen a remarkable spike in uptake. Designed to&nbs...
FAO delivers training to strengthen climate monitoring in Africa as part of forest restoration and ecosystems project
16/12/2024
FAO’s Agrifood Economics and Policy team has just returned from Cameroon, where it delivered capacity-building training on climate action and greenhouse gas (GHG) accounting using the Environmental eXternalities ACcounting Tool (EX-ACT) for the
FAO unveils the new-look EX-ACT, as the climate-change mitigation tool goes digital
18/10/2024
Area of work
Investments for sustainable markets, agribusiness and rural transformation
Connecting farmers, markets, consumers and investors with sustainable value chains
