Changing the Conversation: Addressing Tough Issues through Proactive Transparency
- Libby Annat, Ethical Trade and Sustainability Controller, Primark
- Soledad Mills, Vice President, Standards & Stakeholder Engagement, Equitable Origin
- Daniel T. Bross, Senior Director, Corporate Citizenship, Microsoft
- Dunstan Allison-Hope, Managing Director, Advisory Services, BSR (Moderator)
Not being transparent exposes companies to more negative press and criticism than transparency does.
Traditional thinking leads us to believe that business and government are closely aligned on most issues. However, in the case of transparency, business seems more closely aligned with NGOs, especially as companies increasingly find resistance when asking governments to allow them to be more transparent due to claims of national security concerns.
Legal departments are often seen as internal barriers to establishing greater transparency, but partnering with them is key to sharing the mutual benefits that arise from increased transparency.
“Simple, clear, and concise communications are fundamental to transparency, and for companies that want to get their message across.” —Daniel Bross, Microsoft
“Sharing the right information in the right way to the right audience is essential to effective transparency.” —Libby Annat, Primark
“Government has a role in regulation, but also a role to incentivize good practices, not just punishing the bad. [They] can do a lot to promote voluntary standards, to incorporate into public procurement efforts through licensing, to award companies.” —Soledad Mills, Equitable Origin
“Transparency is never going to be perfect—you start small, talk to others in the industry, and find out what they’re doing and why, and the impacts they see, and you start there. You just need to buckle up and get ready.” —Libby Annat, Primark
Dunstan Allison-Hope opened by stating that the session was not intended as a conversation about sustainability reporting or reporting standards, but rather as a discussion focused on how companies can use transparency as a means to improve dialogue on tough issues. Allison-Hope then introduced the speakers and asked them each to weigh in with initial thoughts on transparency.
First, Libby Annat shared a story from the Rana Plaza tragedy in Bangladesh. Primark had operations in the collapsed factory and felt responsible to issue a transparent response, but was challenged since its sustainability efforts were not traditionally intended to deal with such a situation. Through stakeholder outreach, the company learned that people were visiting the Primark website to find information about the aftermath, and as a result, the company began using the site to share updates. Primark’s culture of transparency dates back to 2008, when accusations by the BBC about child labor helped the company shape its understanding of how to share the right information with the right audiences.
Daniel Bross then explained that Microsoft’s transparency journey began more than 17 years ago, at a time when the company was not clearly telling its story. Today, Microsoft has established a commitment to human rights and to transparency, and Bross believes the company has radically embraced such transparency for two reasons. One is due to the industry in which Microsoft works—it would be inconsistent for a tech company not to be transparent when its business model is based on sharing and communicating information. The second relates to the company’s leadership—Microsoft would not be speaking out on human rights or transparency if it weren’t for executive leadership on the issue. He suggested to audience members that if they work in an organization with executive leadership, they should leverage it in smart ways, and if not, they need to start building a base of allies and internal supporters.
Coming from a different angle, Soledad Mills shared ideas on transparency in the fuel value chain. She sees a need for transparency from oil and gas companies who have a responsibility to mitigate their impacts on the natural environment and involve local communities in the decision-making process. Her organization drives transparency through a certification system—developed by stakeholders and independently validated by third parties—that rewards outstanding performance and enables oil and gas companies to communicate claims of positive impact through their value chains and engage with communities on the issue.
Playing devil’s advocate, Allison-Hope asked the panelists to address the issue of skeptics who say transparency doesn’t have an actual impact in addressing the issues. Annat decried this view, citing the International Labour Organization (ILO) as proof. In a recent assessment program, the ILO began publicly publishing information related to factory audit results, and once factories started looking at their peers’ performance, they were compelled to improve their issues proactively.
Allison-Hope asked Mills if driving transparency across the value chain meets resistance from those who simply do not want more transparency. Mills agreed that oil and gas companies are not typically perceived to be the most transparent, but since their customers are asking where their materials are coming from, she believes they will soon be asking about where their energy is coming from, and this pressure could change industry resistance.
Turning to the audience, Allison-Hope fielded a question on how to establish boundaries for transparency. Bross detailed Microsoft’s approach of creating a global human rights statement with underlying policies and practices, as well as a transparency report to explain the policies. When stakeholders make demands for more transparency, Microsoft demonstrates the boundaries set to establish these principles and global human rights statement, which helps to end the “never enough” loop.
A second audience question probed how to convince executives that greater transparency would be beneficial in a primarily business-to-business model. Mills responded that, even in the absence of consumer pressure, a smaller company may be selling to a larger company with reputational risk and a mechanism for due diligence, leading them to ask for more information from its suppliers in order to satisfy investors.
Allison-Hope closed the session by asking panelists what the conversation on transparency will look like 10 years from now. Mills predicted that we will be discussing how to use an abundance of corporate data, Bross posited that it will focus on the competitive advantage of transparency, and Annat suggested transparency will drive further connections among actors in the value chain.
November 5, 2014