Role of transparency in a triple bottom line business model

Logo of Global Reporting Initiative

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What is the role of transparency in management of a triple bottom line (TBL) business model? The answer is not whether to be or not to be, but rather how much.

‘If I have done some good, do I tell all about it or tell a bit about it or simply stay quite and go about doing my business in the new good way?’

Firstly, the idea of transparency arises only when, the company is either thinking, or has decided or more idealistically, already taken steps in the Triple Bottom Line model of business. Transparency doesn’t even come close to those companies who haven’t even thought about incorporating the concept of triple bottom line into their final bottom line.

For this discussion, let’s consider the companies that are taking the right steps in that direction. As a first step, such companies are serious on bringing out Global Reporting Initiative (GRI) or their own form of Corporate Sustainability reports. Taking out these reports in no way ensures complete transparency. It merely reflects that the company has stepped in the right direction – nothing more.

Some of the big name corporations have remained quite for several years in spite of ‘doing good’ or rather ‘doing less bad’. This is just because they know since what they’re doing is not good enough to address the problems and therefore, would directly come in the line of fire of the activists and environmental groups or general public who otherwise would have absolutely no knowledge of it earlier. It is like exposing your problems and meeting with criticism, because attaining 100% perfection in this area is almost impossible as there will always be scope to be leaner and cleaner.

In the first thought there seems to be no question as to why companies shouldn’t be transparent about their good activities, especially on the environment front. But then there are pitfalls too of being transparent.

Joel Makower, in his book ‘Strategies for Green Economy’ cites an example of Levis Strauss that had made a move to sourcing 2% of it total required cotton to organic cotton. It was a great move done some few years ago, but they didn’t come out and loudly exclaim that. Why? Because they thought that this good leads to a question of – that means the other 98% of the cotton you are sourcing is bad for the people and the planet!

I think transparency and green-washing are two sides to the same coin. There are a lot of companies which have genuinely invested a lot of time, effort and money in the move to TBL business model and they don’t claim to be green. On the other hand, there are a huge number of companies that are in one word ‘green-washers’ claiming to have green products and processes in one way or the other.

For example, a company needs to give a clear information on how it wants to deal with sustainability. But first the company must identify the right stakeholders to whom it wants to share any or all specific information. Since any sensitive information may have a potential to backfire, timing to disclose the information must be chosen looking at the market, economic and in some cases political conditions.  And above all, a company must never mis-represent or mislead just for the sake of being transparent to be in the “good books” of some key stakeholders.

In listening to a talk by one of the founders of the firm, ‘TerraChoice’, which brought out the 7 sins of green-washing in 2007/2008 after scrutinizing about 4000 products in various countries, the report took transparency to another level – consumer facing, beyond the GRI compliant Sustainability Reports.

He, in effect said – If I buy that car that the company says will make me feel sexy, then after about 100 miles, I’ll realize that I am not any sexier than I originally was. But if a manufacturer says that this particular refrigerator will reduce emissions by 50% and will reduce my energy bill by 80%…I have no way in the world of knowing that. So companies in this green area, have to be really honest and transparent in what they claim.

Transparency is very important. But how much to be transparent and in which areas, is the right question.

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