Radical transparency has been as the antidote to greenwashing. It requires companies to be accountable and responsible for the impact of their products, services and operations and to make full and frank disclosure about how the issues are being addressed.
Radical transparency provides all stakeholders with greater information, enabling collaboration and empowering action on systemic issues that could not be tackled by any one player in isolation.
Brands can build trust in their operations, enhance their reputation and potentially gain competitive advantage by being totally — and often brutally — honest about their sustainability efforts. That means not just going public on how a company has improved its products and operations, but also being open about what they are yet to do, what they got wrong and what they have learnt along the way. It shines a light on the actions that are working — and the ones that are less effective — enabling businesses to focus their sustainability efforts in the areas that count.
While businesses should be encouraged to progressively shift towards radical transparency, it is not without its risks and timing is everything. It can open the business up for increased scrutiny — including in areas not covered by mandatory reporting requirements. Some stakeholders may misinterpret a company’s admission of shortcomings, especially in the absence of any comparisons — if competitors aren’t equally honest, any challenge the business encounters may appear to be a company-specific issue, rather than a systemic risk affecting the whole industry. It is also essential to back up statements with data demonstrating clear progress, not just awareness of the issues.
Growing reporting requirements, including the EU Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), mean that companies will have to report on their activities in ever greater detail. How does a business determine if it is ready to go beyond the statutory minimum and embrace radical transparency?
Sarah Walkley, Senior Sustainability Writer at Context Group explores the key questions that you should ask yourself before your company takes the plunge.
- Are you doing it on your own terms?
First, it’s crucial to be clear about why you are considering boosting transparency. Is it because other companies, particularly your competitors, have gone down that road? Are their actions forcing your hand, or raising customer expectations for you to be ever more explicit about your activities?
Companies such as Ace & Tate and Noah, that are highly transparent about their activities, have done their preparation and evolved their approach over time. They have been collecting data on all aspects of their business, developed and tested the messaging and ensured they can tell a coherent story.
They have embraced a more transparent approach on their own terms — not been cajoled into it by those around them.
- Are you prepared for employees to ask anything?
Does your company provide every opportunity for employees to ask questions about corporate and sustainability strategy as part of regular townhalls and updates? And are they provided with full and frank answers?
The most transparent companies have ‘Ask me anything’ sessions in place. They provided a testbed for what companies are ready to talk about publicly. If a company is not yet ready to put its cards on the table and talk about its sustainability progress internally — both the positives and the negatives — then it is not ready to share that information externally.
- How do you think other stakeholders will react?
If your company is already fully open about its activities internally, the next step is to think about how other stakeholders would react to you telling all — and potentially doing so in a way that may be quite different from how you communicate now.
Ace & Tate made no secret of the fact it had made some bad decisions on its journey to becoming a B Corp and had ‘f*cked up’ at times. It made a break from the typically staid tones of corporate communications to indicate that it was not just saying something different — it was also doing things differently, for example reversing a decision to use polyurethane in its glasses cases, which helped to reduce emissions but increased water consumption.
For other organisations, including Noah, Ganni and Patagonia, it starts by acknowledging that they are not sustainable companies. Their focus is on being the most responsible businesses they can be.
If suggestions that your company follows a similar approach are greeted with consternation and worry about what shareholders, suppliers or customers would say, then maybe now is not the time for radical transparency. However, just having the conversation should help to flush out the biggest areas of concern which need to be addressed to unlock a willingness to be more open.
- Could you go above and beyond?
The European Sustainability Reporting Standards (ESRS) list the data points that companies subject to CSRD will have to report on. There are over 1,000 data points in total — most companies will be required to publish data on a few hundred points covering the material sustainability matters that are most relevant to their business.
Companies can choose to be even more transparent and report against additional data points.
But the mandatory reporting requirements under ESRS and CSRD are already a big ask, especially for many private companies that fall within the scope of mandatory reporting for the first time.
Does your company have capacity to go above and beyond the base requirements at this stage?
- Are you prepared to reveal the full picture?
Are you ready to share the truth, the whole truth and nothing but the truth?
Specificity is the key to avoiding greenwashing. The Directive on Empowering Consumers for the Green Transition (also known as ‘the Greenwashing Directive’) has made that abundantly clear in restricting the use of generic terms such as ‘green’ and ‘eco friendly’ and regulating the format of acceptable claims, e.g. ‘this bottle is made of 30% recycled plastic’.
But focusing so specifically on one aspect of a product raises questions about other, less favourable attributes, or even other products. Why is the product not made entirely of recycled plastic or even a different material, for example? Or why are other products still sold in non-recyclable sachets rather than recycled and recyclable bottles?
It is as important to reveal what you are not doing and why as it is to communicate where you are making progress. Like Noah, Ganni and Patagonia, that may mean setting the record straight that there is no such thing as a truly sustainable company — only ones that are trying to make a difference where they can and minimise any inevitable impact.
- Are you willing to share what went wrong?
No initiative ever goes entirely to plan. Things take longer than you think. Projects cost more. And unexpected challenges always emerge along the way. But these setbacks all bring valuable learning, enhancing future initiatives. They enable companies to identify where greater collaboration would help to tackle systemic issues.
Radical transparency requires humility and openness about what went wrong, what you have learnt from the experience and how that is shaping future activities. Bragging only about what went right will sound hollow.
- Are your stakeholders already using AI to judge your efforts?
Are your stakeholders using artificial intelligence to assess your actions? Tools such as ChatIPCC, ClarityAI, GreenwatchAI and ClimateBert enable users to compile information from a disparate range of sources and draw their own conclusions about whether your organisation is living up to its sustainability ambitions.
The most robust response is to be more open about your approach and consistent in the way that you talk about activities. The technology can flush out a poorly considered press release issued in a minor market or an unguarded comment uttered in an interview, making it easier than ever before for stakeholders to question your strategy. Consistent messaging is essential to prevent this and is the foundation to radical transparency.
Context supports companies to hit the right tone with their sustainability strategy, reporting and communications — encouraging transparency and building credibility and enabling delivery of impact-led sustainability strategies. If you would like to talk about your organisation’s needs, please get in touch via www.contextsustainability.com or helen.fisher@contexteurope.com.
