THE BLOG
10/31/2013 02:56 pm ET Updated Jan 23, 2014

The See-Through Company: 3 Reasons Why Businesses Would Opt for Transparency

Earlier this year, I wrote a blog on true prices -- those that take social and environmental impacts of products into account. And on how they can form the basis for a new market economy. The comments left behind by readers contained very insightful ideas. Quite a few readers were positive, but a few key challenges also came up. These can be summarized as "why would companies provide transparency?", "who defines what 'true' is?", "who will check the data?" and "how can transparency actually drive behavior?" I will discuss them all in due time, but right now I will focus on the first one: Why go for transparency?

It is a relevant question, as right now consumers are seeing little transparency from businesses. After PUMA's pioneering Environmental Profit & Loss account, no other company has gone down the path of providing insight into what the company would owe nature -- if the planet would have a bank account. So, is that the end of it?

No, because behind the scenes, companies are buzzing. Many are looking at the environmental costs of their activities and exploring what this means for them. This is exciting: It is new territory filled with both opportunity and risk. Few of them are ready to be transparent just yet. After all, what will your impact be, and how will your customers react?

Nonetheless, others are realizing fast that times are a-changing: We're living in an age where information travels fast and is becoming a public good. So why share?

1. "Sharing is caring." Ask any "screenager." Consumers seem to appreciate transparency even if results are not perfect, and understand the information signal of not being transparent.

2. An A+ for effort. Consumers understand that a company's environmental and social costs are not zero just yet. But if a company can show that it is moving in the right direction, with the intention of reaching that zero at a certain point in time, consumers can actually lend a helping hand by showing support.

3. The reward. Most importantly, companies that are already doing great things in sustainability currently don't manage to be rewarded by consumers for it. Yet an example like Puma shows that being open about external costs actually forms a USP.

All in all, companies can benefit from transparency if they communicate carefully and with the right context about the true prices of their products. Over to you -- do you agree?

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