Why transparency needs an intervention

Much has changed in the world of transparency since Interface published one of the first corporate sustainability reports in 1997. (We fondly recall the yellow banana paper cover.) Today, this kind of company-level reporting is so mainstream that most large companies produce CSR reports, with the option to have those reports audited by an accounting firm against a global standard, such as the Global Reporting Initiative.

With the recent movement towards transparent reporting of product-level impacts (as discussed in our last column), it would appear that we’ve collectively made great progress. But a skeptic might be inclined to ask, “So what?”

Put another way: We seem to be getting better at keeping score, but does anyone know what game we’re actually playing?

If you agree with us that the game we are playing is about shifting our businesses toward a sustainable path, then it might be time to revisit systems thinker Donella Meadows’ acclaimed essay, Leverage Points – Places to Intervene in a System (PDF), to assess whether what we are measuring in our reporting has any impact on this game.

Meadows is clear in her essay: She is not suggesting some formulaic, paint-by-numbers approach to change a system; rather, she invites us to think more broadly about the many ways there might be to force systems to change.

She defined “leverage points” as places within a complex system (a corporation, an economy, a living body, a city, an ecosystem) where a small shift in one thing can produce big changes in everything. She then proposed a list of 12 places to intervene in a system beginning with least effective (#12 – Constants, Parameters, Numbers) to the most effective (#1 – The power to transcend paradigms).

While any sustainability expert could pick apart the hundreds (thousands?) of CSR reports companies now publish every year, we prefer to pick on something closer to home: Interface’s substantial investment in generating an Environmental Product Declaration for every product we sell globally by the end of 2012. Will this substantial commitment to product transparency actually “move the needle” towards a sustainable future?

Can EPDs become a leverage point?

EPDs are standardized life-cycle data disclosure tools often likened to the ingredient lists and nutrition facts labels found on food items, except you get data on such things as greenhouse gas emissions and water usage instead of calories and saturated fat. Any product can have an EPD, just like any kind of food can have a nutrition label. The problem is, judging from our current health epidemic, just putting the information out there is insufficient to cause significant reductions in obesity, diabetes and heart disease.

This is why my first instinct was to say that an EPD as a data disclosure tool might fall into Meadows’ 12th category of parameters and numbers. She suggested that probably 99 percent of our attention goes to parameters (such as how much energy was used or how much pollution was emitted), but they only become powerful leverage points when they change dramatically. Parameters and numbers are the points of least leverage, and parameters and numbers represent the bulk of what is reported in a CSR report or an EPD.

So, if this is the case, have we just wasted a lot of money on a seemingly “low” leverage point, or can disclosure tools like EPDs become more effective places to intervene in the system?

Next page: It's not about the data, but how it is delivered