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At my organization, GreenBlue, we are interested in a different question: Can business-to-business transparency influence companies' behavior?
GreenBlue is a strong advocate for business-to-business information transparency as a framework for sustainability, and I hope that our perspective can be a valuable contribution to this conversation. For those who do not know our work, we seek to provide business decision-makers with science-based guidance for understanding the environmental impacts of their actions. We have demonstrated that this is possible, and we have also demonstrated that business decision-makers (perhaps unlike the average consumer) are able and willing to assimilate complex information to inform important (and far-reaching) decisions.
In the context of the recent GreenBiz debate about radical transparency, I believe the following three points are critical:
1. Business-to-business (B2B) transparency is a powerful engine for sustainability.
2. Real-life examples of B2B transparency as an engine for sustainability already exist.
3. Contrary to comments on GreenBiz that the consumer website GoodGuide is a model of transparency, by our standard GoodGuide is a well-intentioned but not transparent endeavor, and it is counterproductive to hold it up as such a model.
B2B Transparency as an Engine for Sustainability
The types of decisions available to consumers are fundamentally different than the types of decisions available to producers, meaning that the challenges and opportunities in achieving radical transparency are different. We have focused on B2B transparency because we believe it represents a more significant opportunity to drive positive change for two reasons.
First, the bar is lower: Consumers demand simplicity in decision-making, while businesses expect complexity. Companies are already engaging in thorough decision-making processes as they select suppliers, source materials and invest in new markets, and, unlike the average consumer, they have the obligation and motivation to spend significant time researching these decisions. While it is easy for a consumer to give up trying to decipher the data about the toxicological risks of a single bottle of sunscreen, a company will not survive for long if it does not invest in thorough decision-making for a multimillion dollar product line.
Second, the potential benefit is much greater at the B2B level. Single consumer purchasing decisions have the ability to gradually change the marketplace over time. When a decision is made in the production phase, however, it will likely result in the industrial reproduction of thousands or even millions of units. So a single decision has a huge multiplier downstream, in terms of volume of product and scale of potential systemic impact.
As a result, we believe greater sustainability benefits are possible from transparency efforts that result in increased information sharing along business supply chains, especially efforts that utilize government or NGOs to independently audit information. Improved B2B information sharing will result in more transparency overall, including for consumers, but the demand for information will happen in a more detailed and rigorous manner.
A vast amount of useful environmental data already exists, but it is currently hidden from public view, concealed behind walls of confidentiality as proprietary business information. The companies controlling this data have legitimate concerns that its publication could compromise their business interests. As a result, much data collected by the private sector is not widely available to support and inform intelligent decision-making.
Many public and private sector organizations have discovered, however, that companies are actually willing to share this information in a controlled B2B context. At GreenBlue, we have been demonstrating that it is possible to design systems for data sharing that will "democratize" data without compromising business interests, and we believe that the democratization of data will promote an accelerated marketplace of innovation.
Successful Examples of B2B Transparency Already Exist
While there have been mixed results in B2C transparency efforts, B2B transparency is already happening in many innovative and successful platforms.
In some cases, these examples are driven by a single company, with Walmart as perhaps the best-known example. The company's sustainability initiative has required that all Walmart suppliers report detailed environmental information about their products and sourcing in a range of categories. For example, in 2006, Walmart launched the Chemical Assessment Review Program (CARP), which requires all suppliers of chemical, pesticide or aerosol products to submit full information about the chemistry of their products for assessment against Walmart's environmental and human health requirements.
In other cases, B2B transparency is driven by well-designed, multi-stakeholder certification programs.
For instance, in the forestry products sector, the Forest Stewardship Council and other forestry certification programs have successfully insisted on "chain of custody" tracking of fiber from forest to mill to product, and this B2B information sharing provides a platform for progress toward truly renewable management of our forest resources for future generations.
In consumer products, Green Seal, EcoLogo and other certification programs have created transparent frameworks for information sharing to allow assessment of products against clearly defined criteria, thereby also providing a mechanism for "simplified' communication to consumers.
Learning from each other
I agree that better change will occur through business to business transparency, for your exact reason of complexity. These are complex issues and when we distill them down to a ranking system, we are moving away from the complexity of the problem.
A great example of B2B transparency can be taken from the social responsibility work that has been done in business. Transparency can exist both within the supply chain and with other brands; because these are the players that is facing the same issues. In order for change to occur there needs to be an understanding of what the issue is, is there a ready solution, and if not how long and what is needed to come up with that solution. This is how change is happening. Many businesses are facing these issues for the first time and don't know how to fix them. So when you have the ability to ask questions without getting attacked for having an issue, then solutions start to happen. And a lot quicker than oppertating in a silo.
If we are going to save our planet and ourselves, we have to move away from a competitive advantage only outlook and start asking for help.
Then we start moving to industry standards and more harmonization in requests for suppliers.
Thanks for the article, it sparked some interesting thoughts.
Agree, but it's not cheap
B2B communication will change practices. Companies learn from each other and adopt better practices and set new expectations for what is acceptable. Sustainability is increasing, albeit in jerky steps.
Because businesses know context, they are more capable of understanding more complex info. But not everyone does. A purchasing agent is not necessarily that far removed from a consumer. He relies on someone else to have set the specs. But at least he has some expertise in house to draw on, maybe, depending on the size of the company. Sustainability/green is still a lot of mumbo jumbo to SMEs.
Furthermore, data collection and transfer is not free. Go see Mike Brown's comments to Joel's transparency article on June 17. When every B asks for a slightly different set of metrics and uses slightly different terminology from one another B, things get quite wearying. And costly.
We are long way still from having a common set of metrics and data transfer systems in B2B communications across the broad spectrum of industrial, commercial and consumer manufacturing sectors. Dialog is happening and standards are beginning to percolate. It'll happen, but it'll take time. Maybe Walmart or the "Sustainability Consortium" will get there, but I"m not going to hold my breath. It'll be years yet.
Georjean Adams, EHS Strategies, Inc.