Is full transparency in retail possible?

McKinsey & Company has highlighted the urgent awakening needed for the retail industry, with consumers globally putting pressure on companies to highlight the depth of their claims around transparency and sustainability. But there are businesses out there who are showcasing to consumers that they are taking ESG seriously. For example, Reformation, Veja and Everlane have positioned themselves as leaders in the sustainability wave and have embed slogans such as ‘radical transparency’ into their business model. However, radical transparency isn’t simple.

While the pressure is mounting on retail companies to give customers more information to back up their ESG claims embedding transparency into a business presents key challenges:

• Clarity is a moving target — A decade ago, just speaking about where products were made was recognised as a new boundary when it came to transparency, now this is just the norm. But implementing more reliable and more granular knowledge it generates new difficulties. For example, highlighting the demand for transparency on a products’ climate impact requires brands to not only know their supply chains inside out but also understand environmental accounting.
• Scaling transparency is complex — Operating transparently means corporations have to have exceptional in-depth knowledge of their internal procedures, and that gets more complex as businesses scale-up, as larger operations involve more complexity.
• Getting transparent communications right is troublesome — From a sales and marketing viewpoint, how brands talk about transparency matters almost as much as actually doing the right thing. With call-out culture rising, it’s a fine balance: offer too much and endanger a reaction that undercuts any genuine work that might be underway. Saying that, if retailers disappoint when it comes to educating consumers, competitors doing less may profit from a halo of greenwashing from which it is challenging to stand out.
• Transparency isn’t sufficient — Most consumers still worry more about cost, quality and style in comparison to anything else when it comes to their purchasing decision. This means that many of those within the industry are opting to not implement the additional responsibilities that come with more increased transparency.

Despite full transparency being complex and maybe not yet fully viable, businesses can still implement strong ESG practises and move towards a more sustainable future. We are Rubik Communications support companies in enhancing their environmental, social and ethical impact through our ESG consultancy services.