When Transparency Becomes Counterproductive
Attending a customer’s sustainability stakeholder meeting; considering stakeholder input for BT’s sustainability report for next year; looking at reports from analysts, at rankings and at indices….I sense an overemphasis on data points in the name of transparency.
Many indices and rankings compete on who has the most data points. Do you have a climate change policy? yes=1, no=0. What if I have a policy but my policy is that climate change is not man-made, how are you going to score that?
Lets add an additional data point to make our study more comprehensive. Do you have a policy on whaling? yes=1, no=0. Tempting for the company to develop a policy so they can say yes and get another point in the index. But my company is in the ICT sector. Policy on whaling is an important issue for the world but it is not material to my sector, so my position has no value anyway. And spending time on a non material policy diverts resources from something important.
Of course these examples are exaggerated, but I think they illustrate a real issue companies are facing.
Transparency is an important component of corporate responsibility, but so are materiality and sustainability and ethics. Where the urge to meet a numerical target for transparency supersedes materiality I think we have greenwash, or whitewash. Provide enough data and you can hide the real issues in a sheen of apparent goodness.
A good corporate responsibility report should always start with a discussion of materiality. Dilemmas should be openly articulated. And only then, when priorities and objectives have been established should data be addressed for material issues. A good corporate responsibility report should be judged first and foremost by its attention to materiality, not by the extent of its data.
Furthermore, the general public, in my view, is not that interested in data. Experts of course want and need data, but the general public wants narrative and passion, anecdotes and values.
I think that the corporate responsibility world would be best served by putting all the data on-line so the right people can explore the pieces that interest them. In parallel we should produce attractive, accessible booklets that illustrate the real dilemmas our businesses face and articulate how we go about resolving them.