Council Post: Green Business Is Good Business: Why Transparency Is Key For Corporate Sustainability

Gary Steele is Group CEO of TES and a champion of a Sustainable Tomorrow.

Sustainability — in terms of green business practices and business continuity — has gone from being a component of the corporate mission to being a driving force in the overall business strategy for most organizations. Now more than ever, I believe transparency around sustainability efforts is a business-critical component to consider. Transparency breeds accountability, which is a big part of what drives change and improved results.

At my company, an IT life cycle services organization, accountability and transparency are core values. We release an annual sustainability report, which focuses on where our efforts and impacts on environmental, social and economic capital issues intersect. It’s how we keep score against the goals and objectives we set in that space. Doing that keeps it at the forefront for our team and reinforces it as a part of our mission in everything we do.

At the same time, we distance ourselves from viewing transparency as a corporate concept and see it for what it is — a real human quality. It’s been found that 94% of consumers are more likely to be loyal to a brand that’s completely transparent. Transparency also builds trust, trust that is foundational to your relationships with your employees and customers.

In a world where the UN’s Intergovernmental Panel on Climate Change (IPCC) report tells us we have to reduce our greenhouse gas emissions to combat rising temperatures we’re predicted to see over the course of the next several years. Business continuity is based upon friendly, open companies as well as initiatives that imbue sustainability and transparency within them are material success factors.

Larry Fink, CEO of BlackRock, in his annual letter to chief executives, stated that climate change has become a primary fixture in many company portfolios and “In the near future—and sooner than most anticipate—there will be a significant reallocation of capital.” BlackRock strongly reinforced this by pushing to double the number of sustainability-focused exchange-traded funds (part of its $7 trillion in assets managed).

Meryam Omi, Head of Sustainability and Responsible Investment Strategy at Legal & General Investment Management (LGIM), writes: “The world is truly in the midst of a climate emergency, which could have drastic consequences for markets, companies and, therefore, our clients’ assets.” 

In practice, corporate sustainability can take many forms. It could be implementing sustainable practices such as switching to renewable energy sources, implementing company training programs that focus on improving how individuals can impact carbon emissions, or even IT asset disposition and electronic waste recycling.

Any corporate sustainability policy or strategy must be built from the foundation of your company’s core competencies. What’s your primary service offering? How can you improve each part of that process in line with environmental and social protection?

According to findings from Neilsen, companies that are innately “greener” and less harmful in practices are popular. These companies are “benevolent and bankable.” These forward-thinking companies see there’s a direct link between consumer demand for change and corporate involvement.

A recent survey discovered that 81% of global respondents felt organizations should be working to improve the environment, a sentiment shared across generational lines. The trend has been called the pursuit of “emotional sustainability.” One that’s not just for the sake of advertising or greenwashing but that captures the head as well as the heart of consumers.

In an international study conducted by Unilever, they discovered that one-third of consumers are buying from brands that are seen as sustainable. Being transparent about the real impact of products or services helps to show potential customers you’re trustworthy and helps them to make more informed decisions. Unilever’s report went on to find there’s a 966-billion-euro market opportunity for sustainable brands — another reason green business is good business.

Transparency is key to capitalizing on a consumer market that’s more focused than ever on sustainability. Part of this is providing information and data on the impact caused by products, services and businesses. This data should cover a product’s entire life cycle, even before raw materials find their way to a manufacturer.

It is important to remember this isn’t about trying to prove you’re the most eco-friendly. It’s about being honest and open and providing customers with the ability to make their own decisions regarding the products and services they consider purchasing. Consider leveraging various tools to aid in the process. Life cycle assessment (LCA) and an environmental product declaration (EPD) can both help assess the impact of a product and then disclose that information to be transparent regarding its impact.

Research by Sprout Social found that 86% of Americans viewed transparency in business as “more important than ever before.” Similarly, 86% of respondents said, even after a bad experience, if a business has a good history of transparency, they would be more likely to give it a second chance. On top of that, 89% said they think a business would regain their trust if it’s been completely transparent about a mistake. 

This is why it is a business imperative. Transparency equals trust; trust is everything. There is a direct correlation between the level of trust between an organization and its customers to the health and success of that organization. Corporate sustainability isn’t about getting more plants in the office or making packaging recyclable. It’s about progressive and systemic change. 

At my company, we’ve learned that being transparent helps us to improve our relationships with our clients, improve the work of our staff and provide ourselves with better visibility with which to capture future improvements. We’ve seen how transparency is an aid to collaboration; if we’re open with what we’re doing, we’re more likely to have people engage in a meaningful way.

It all comes back to a very simple concept: Doing the right thing is the right thing for your business, your employees, your customers and the planet.

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