filter by tag: transparency

Transparency is a critical issue for corporate leaders, one that separates the compliers from the leaders in corporate responsibility reporting. It is a difficult aspect to measure, but Corporate Knights has tried to do just that with a new and improved release of its annual study, The Global 100 Most Sustainable Corporations in the World.

The Corporate Knights added a unique measure this year, called a Transparency Indicator. The number quantifies how easy it was to find information for the 10 other Key Performance Indicators (KPIs), therefore indicating the level of disclosure companies are practicing. As Corporate Knights' editor-in-chief Toby Heaps notes, "You need to have transparency if you want people to take you seriously. Then you can get beyond platitudes and discuss issues that people really care about."

But Corporate Knights is not the first to incorporate transparency. In 2009, CRO based its analysis of the 100 Best Corporate Citizens on data that was publicly disclosed, but Corporate Knights took it to the next level by creating a transparency metric that factored into the overall scoring.

What effect does transparency have on the final rankings? At #1, GE had a 73 percent transparency rank and at #2, PG&E had a 25 percent transparency rank. It's difficult to say without further analysis, but could decreasing the transparency gap have helped PG&E rise to the top? Fortunately, Corporate Knights walked its own talk by publishing complete data tables on its Web site for you to review.

Even cold water can’t douse the fire that reusable water bottle company SIGG found itself under this week. The company was berated in the news for deceptive claims after its CEO acknowledged that the liners of bottles produced before August 2008 contain traces of BPA, a substance that has raised significant health concerns in recent years. Elaine Shannon, editor-in-chief of the Environmental Working Group, notes SIGG’s current crisis is less about the actual presence of BPA and more about how the company chose to address the issue. Although company officials knew of the traces of BPA since June 2006, they did not address it publicly until last month.

The lack of transparency set off a torrent of angry blog posts, tweets and online articles by consumers who felt betrayed. The company has already begun to fight the damaging criticism through letters from the CEO and by establishing a program where consumers can opt to exchange their old bottle for a new one. However, the long-term damage to the brand and business will probably be deep.

Today’s 24/7 new media environment is forcing companies into greater transparency about their products, services and business practices, but just as some dig in their heels, there are also those companies who are going quite willingly. In the cleaning products and alcohol industries, not without their share of judgment for the social and environmental impacts of their products, two companies are raising the bar.

SC Johnson – Early in 2009, the company began voluntarily disclosing product ingredients via a Web site, toll-free hotline and on product labels. It will continue to add products over the next three years, aiming to have all ingredients for air care and home cleaning products available to the public by January 2012.

Brown-Forman – The spirits maker recently launched a Web site dedicated to addressing leading alcohol-related social issues, such as youth and alcohol and marketing and access. The site will serve as a forum for the company to share its own positions on the issues and also invites dialogue by allowing visitors to submit comments. Although it remains to be seen how it will use this public feedback, the company is nonetheless demonstrating its willingness to proactively acknowledge difficult issues and work toward collective solutions. According to Jim Bareuther, executive vice president of global business development, “It is an opportunity for us – and for all interested parties – to contribute to the ongoing dialogue and discussion about the role of alcohol in society and how to curtail abuse and promote responsible consumption.”

Those companies who take an active stance in providing concerned stakeholders with complete and accurate information and an opportunity to voice their positions will reap reputational benefits over the long-term, as well as the opportunity to continually innovate and improve their products, services and communications.

The need for transparency is not limited to the area of corporate responsibility and reputation. In its September 2009 brief, Trendwatching.com discusses “Transparency Triumph” as an important consumer trend, shaping both the marketplace and society.

Products on shelves today have more eco-label flair than a casual-dining restaurant’s employee of the month. This week alone, announcements for a Good Company Seal and a new “Clean Water Wash” label for Gap Inc. jeans were announced, adding to the explosion of new certifications. As organizations create countless standards using different measures and methodologies, how can consumers know which products are “best” or which companies are truly “good?” And with so many certification options, how do companies themselves know which to pursue?

For companies or products that focus on environmental responsibility and value the credibility certifications can provide, any new standard or label is something they will examine. But which are the best? Which are most relevant to your consumer? And how many is too many? At some point, your target customers become overwhelmed and unaffected, so it is important to qualify all the options before jumping in. It won’t make sense to chase after every “latest and greatest” environmental label or certification, as most require a rigorous verification process that companies must commit to, which can mean a large investment of time and money.

When deciding which certification to pursue for your organization or product, do your research. Consider the criteria Consumer Reports uses to evaluate eco-labels which include:

• Meaningful and verifiable: Check for an independent 3rd party inspection organization.
  
• Consistent and clear: Standards should be written in a way that can be verified in a consistent manner so that the label is consistent in meaning among different products.
  
• Transparent: The organization behind an eco-label should make information about organizational structure, funding, board of directors, and certification standards available to the public.

Don’t treat your eco-labels as flair on your sash. Think strategically to determine which label is the best fit for your organization.

The media was abuzz with industry-changing news from retail giant Walmart this week. The company has begun the tricky process of establishing a worldwide “sustainable product index” for its suppliers, with the goal of eventually displaying this on all products it carries. The concept is not new – other companies such as Timberland and Nike have already created their own product evaluation systems – but the goal is to develop the first comprehensive source of data for evaluating sustainability across all products. In the final phase of the process, the company intends to equip consumers with a simple rating system that will disclose product sustainability, allowing consumers to make more informed purchase decisions. As Walmart CEO Mike Duke stated, the company wants to “create a new retail standard for the 21st century.”

Although the consumer-facing label will take a few years to develop, the company will begin the process by first surveying its more than 100,000 suppliers on current practices using a 15 question survey focused on energy and climate, material efficiency, natural resources and people and community. Walmart chief merchandising officer John Fleming explained, “The questions aren’t complicated but we’ve never before systematically asked for this kind of information. The survey is a key first step toward establishing real transparency in our supply chain.” Following this, Walmart will collaborate with several universities, governments, suppliers and other retailers to develop a global sustainability index.

Suppliers whose products are currently on Walmart shelves will no doubt be scrambling to shine light on their sustainability initiatives. This will be an exciting opportunity for those companies already working to reduce their impacts to display their environmental stewardship. Those not already operating with the environment and society in mind, and/or those not measuring such data, will have a lot of work to do in the coming months. And yet, the generality of Walmart’s questionnaire, which doesn’t delve into product-specific or even industry-specific nuances, just skims the sustainability surface. It leaves lots of room for interpretation, and it is not clear how – or if – Walmart will verify the data.

That said, Walmart’s vision is a worthy one and establishing a shared baseline for the industry is a monumental step indeed. The retailing giant, already credited with helping set the standard for items like concentrated laundry detergent, likely has the wherewithal to bring something this complex to life. If the rest of the retail industry joins this effort, it could be gamechanging.

We’ve discussed powerful cause videos in the past, but Dawn’s latest cause commercial is once again tugging at our heart strings. The spot, which shows how Dawn dishwashing liquid can be used to safely wash animals affected by oil spills, coincides with its latest cause promotion. For every bottle of specially marked Dawn purchased and activated online, the company will donate $1 to organizations like The Marine Mammal Center and The International Bird Rescue Research Center.

Dawn nailed many best practices for cause videos with this commercial – it’s the right mix of emotional, uplifting and transparent.  Visit Dawn’s wildlife site for more information about this program.

It’s troubling, as Dress for Success founder Nancy Lublin argues in her recent Fast Company editorial, that intentionally or not, some companies are learning to cause market without the cause.  Lublin cites Macy’s “Shop for a Cause” last fall, which promoted its cause-related shopping day through full-page newspaper ads saying simply, “in support of nonprofit groups.” In reality, Macy’s raised more than $9 million dollars through the promotion which benefited several important charitable organizations (listed on its Web site), but consumers reading the ads wouldn’t know that. The nationwide event benefited local organizations, so logistically, communicating these details may have been complicated. Yet that doesn’t preclude Macy’s from providing its nonprofit beneficiaries with the recognition they deserve. In the end, the organizations benefited from the funding, but they did not have access to the immense awareness and brand building power that a well-marketed cause partnership should provide.

Clearly, insufficient details can quickly undermine the credibility of even well-conceived cause programs and may eventually threaten consumer support. For example, a majority of consumers (91%) want to hear about corporate efforts in supporting causes, but far fewer (58%) believe companies are providing sufficient details about their cause marketing efforts. Mitigate this communication disconnect by providing the detail and transparency consumers and other stakeholders need to believe in your campaign. In many states, legal regulations dictate what must be disclosed, but in general, sufficient details should include the nonprofit partner(s), the amount of the donation, the donation cap and/or the portion of each sale which will go toward the cause, and the length of the promotion.