Case Studies in Corporate Transparency 1

This post is the fifth in a series of eight that unpacks the increasing expectation of transparency in business: Why and how to develop authentic, accurate, and thorough communication and reporting on your business purpose, goals, and impact.

Advancements in transparency have unfolded rapidly across diverse industries such as energy, manufacturing, beauty, retail, materials, food, automotive, and agriculture.

Avery Dennison [AD], a global leader in materials science and manufacturing (which in 2019 set ambitious sustainability goals for 2025, including responsible sourcing and internal ethics, tied together through corporate transparency) is exemplar in the transparency arena.

Its goals are not only transformative for the company itself, but because it’s one of the largest packaging companies in the US, enormously impactful across multiple industries as well. As a company uniquely positioned to transform industries and communities, AD’s leading a movement of materials science innovation dubbed “Making a Material Difference.”

Now its latest commitment as laid out in its landmark report, “The New Transparency” — commissioned by AD in partnership with The Future Laboratory — furthers the boundaries of the transparency frontier in quest of boosting consumer confidence and trust, even as increased efficiency and more assured prosperity benefit the bottom line.

“Already accelerating before the global coronavirus pandemic hit,” says AD, “transparency has become an increasingly urgent issue thanks to Covid-19. As Tyler Chaffo, Manager of Global Sustainability, says: ‘The coronavirus pandemic has served to show that transparency is a social issue as well as an environmental one, and in fact the combination of those two has shown that they are greater than the parts.’”

Packaging, labeling, materiality- and waste-tracing: All this “New Transparency” offers consumers expanded visibility, safety, and education, while giving businesses unprecedented control over their supply chains and their environmental footprint, the report says.

Another company vowing more transparency and “walking the talk” is DIY-giant, The Home Depot. Committed to the longstanding three pillars of its purpose — operating sustainably, focusing on people, and strengthening communities — each year, it extensively and transparently reports on its progress — as well as its significant shortcomings (“But we can always do more”) in what’s historically been called its “Responsibility Report.”

Developed in deep collaboration with a broad spectrum of stakeholders — the company having deputized a Sustainability Council comprising representatives from the entire “Breadth of its With,” including associates, customers, communities, NGOs, suppliers, investors, and academia — The Home Depot’s annual reports answer two types of stakeholder concerns: action on key issues, and transparency regarding those actions.

The Home Depot aims to contribute substantially to bettering the world around ESG aspects such as Energy Reduction, Climate Change, Chemical Concerns, Human Welfare, Natural Resources, Responsible Sourcing, and Waste and Recycling — and commits to specific goals each year, then reports on them — whether achieved or not — the following year.

It’s identified ten of the UN’s 17 Sustainable Development Goals [SDGs] that align within The Home Depot’s compass of impact, and help it expand that scope.

For example, in terms of diversity, equity, and inclusion [DE&I] The Home Depot reports that it’s absolutely against discrimination in all forms, that it’s made strides in DI&E among its ethnically diverse 400,000+ employees, but has room for improvement — especially in its leadership.

Its model employee-volunteer program/foundation — Team Depot — contributes hundreds of thousands of hours and hundreds of millions of dollars to causes such as disaster relief and veterans’ needs.

Ninety-five percent of its 2,300 stores donated supplies and support to local communities during the first months of the 2020 pandemic, even as the company surpassed $1 billion in associate relief investment.

In 2020, Ron Jarvis, VP of merchandising and sustainability, told me that “In 1993, we were the first retailer to announce a check and balance system for environmental claims. If a manufacturer made an environmental benefit claim, they had to bring verification.” This set a standard for other Lead With We companies’ holding their supply chain partners accountable.

How much did all this Lead With We activity cost the company? In 2009, The Home Depot’s sales were $66 billion. In 2019, they topped $108 billion. During that same trajectory of tremendous growth, the company’s negative environmental impact declined considerably — at the same time it kept its position as the top US home improvement brand.

UK-based Marks & Spencer is a similar paragon of profitable transparency. Particularly impressive are the company’s environmental goals and impact. Notably, all its environmental benchmarking is science based, as is the case at The Home Depot.

Again, we don’t have to reinvent the wheel when we work as M&S did with benchmarking partners like the London Benchmarking Group protocols for community investment, the World Resources Institute Greenhouse Gas Reporting Protocols, and On-pack Recycling Label definitions of recyclability — it’s likely there are plenty of educational tools and resources out there to help us on our transparency journey.

And it is a journey. The Home Depot, for example, suffered in 2019 when its co-founder Bernie Marcus expressed support for Donald Trump’s reelection. Marcus had previously donated more than $7 million to Trump’s 2016 presidential run.

Critics launched a boycott, and the company was quick in its response — and reasonably transparent — distancing itself from the long-retired Marcus, and claiming neutrality in presidential politics.

Later, as Hallmark, American Express, AT&T, Blue Cross Blue Shield, and several dozen other businesses cut donations to GOP lawmakers who supported overturning the 2020 US presidential election, both The Home Depot (as with its rival Lowes) largely continued support for Trump — thus invalidating its neutrality claim. Trump, in turn, transparently lauded the companies.

Again, in 2021, The Home Depot came under fire for perceived lack of transparency. Georgia faith leaders representing more than a thousand state congregations forcefully called for another boycott to protest the company’s silence in the face of proposed restrictions on voting rights in the state. Other Georgia-based companies, such as Delta, Coca-Cola, Aflac, and UPS faced similar boycotts.

Even after the restrictive voting law passed in Georgia, The Home Depot did not immediately come out publicly against it, speaking only broadly about its support of democracy and voter access while touting multiple ways the company helps its 30,000 Georgia employees and others to vote.

Its continued reticence to condemn the law left a bad taste in many consumers’ mouths. But meantime, sales for fiscal 2021 were $151.2 billion, a drastic increase in revenue — and The Home Depot’s many efforts and innovations continued to move the world closer to the circular economy it’s been aiming for.

The lesson is you don’t have to get everything right to succeed. Just aim for maximum transparency.

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Simon Mainwaring

Simon Mainwaring

Founder/CEO brand consultancy, We First, bestselling author of We First and Lead With We, host of podcast, Lead With We.