The Changing Meaning of Transparency

Topic:How the view on transparency in corporate reporting has shifted and defined the CSR movement – and why it matters to your organization.

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Transparency: A Definition

“Transparency is the opposite of secrecy. Secrecy means deliberately hiding your actions; transparency means deliberately revealing them…Transparency is a choice, encouraged by changing attitudes about what constitutes appropriate behavior.”1

1 "Rivet Software - XBRL Solutions." Rivet Software - XBRL Solutions. N.p., 2010. Web. 22 Aug. 2012. <http://www.rivetsoftware.com/premium/Rivet-Software-White-Paper-Talking-About-Transparency.pdf>.

Transparency Old View vs. New View

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• Twenty years ago, transparency in corporate reporting was viewed negatively and sustainable practices were not a business priority; most companies didn’t report on social and environmental practices

• Transparency was too risky because it exposed businesses to unwanted scrutiny from all stakeholders

• Organizations shied away from transparency for 2 reasons:1. Bad press could arise after disclosing the environmental or social impact of the business2. Revealing too much could make businesses vulnerable to competition

Old View

FactIn 1999, only ≈600 companies in the world submitted Corporate Responsibility (CR) Reports. 2

62 "CRRA CRReporting Awards '10." Corporate Register. Corporate Register, Apr. 2010. Web. 22 Aug. 2012. <http://www.corporateregister.com/pdf/CRRA10.pdf>.

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New View

• Over the last 10 years, businesses have realized that transparency is necessary to build trust with stakeholders

• Transparency is not equivalent to compromising intellectual property, but is being honest about what you do and how you do it – this forces companies to adopt better, more sustainable practices

• The key to transparency is voluntarily disclosing information. This is usually done through annual reports, conferences and/or online tools like websites and social media

FactIn 2009, ≈3,800 companies in the world submitted CR reports. This is a 533% increase from a decade earlier.2

2 "CRRA CRReporting Awards '10." Corporate Register. Corporate Register, Apr. 2010. Web. 22 Aug. 2012. <http://www.corporateregister.com/pdf/CRRA10.pdf>.

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What Changed?The people have spoken – and now organizations respond

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An Educated Public

• People have become more educated about the environmental and social impact corporations have around the world

• Millions of individuals are proactively reducing their carbon footprint and making contributions for social change

• They now hold corporations to the same standard, and are paying attention to ethics and supply chain sustainability

FactBetween 2005 and 2009, there was an 84% increase in companies producing CSR reports for the first-time.3

3 "CRRA CRReporting Awards '10." Corporate Register. Corporate Register, Apr. 2010. Web. 22 Aug. 2012. http://www.corporateregister.com/pdf/CRRA10.pdf>.

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The Result

• Smart companies are becoming more transparent and producing corporate social responsibility reports detailing their efforts toward becoming more sustainable

• Consumers are increasingly making purchase decisions based on this information

• People are plugged in all the time and want information on demand, so it’s essential that companies not only put a sustainable plan in place, but then make it easily accessible (and digestible!) for the public

FactIn PwC’s 2010 CSR Trends Report, 81% of all companies surveyed had CSR information on their websites.4

134 PwC, and Craib Design and Communications. CSR Trends 2010. Rep. PwC, 2011. Web. 23 Aug. 2012. <http://www.pwc.com/ca/en/sustainability/publications/csr-trends-2010-09.pdf>.

Why Transparency Matters to YOUR BusinessAnd what you can do about it

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A Necessary Good

• This new form of transparency has brought an opennesss among corporations that is subject to both criticism and praise

• With so many corporations being transparent in their CSR strategies, organizations are competing to be the most sustainable and produce the best reports. This is raising the bar for other companies practicing CSR

• The Global Reporting Initiative (GRI) Guidelines have helped standardize reporting so collaboration and global benchmarking are possible

FactIn PwC’s 2010 CSR Trends Report, 83% of those surveyed used the GRI Guidelines5

165 PwC, and Craib Design and Communications. CSR Trends 2010. Rep. PwC, 2011. Web. 23 Aug. 2012. <http://www.pwc.com/ca/en/sustainability/publications/csr-trends-2010-09.pdf>.

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Join the Conversation

• If your organization doesn’t already have a CSR program, it’s time to start developing one to stay competitive and make a positive impact

• The best place to start is to research competitor CSR reports to determine best practices

• Once your plan is in place, you can continue to analyze competitor reports to assist with benchmarking and to keep on top of industry trends

• Transparency in corporate responsibility will help you retain a competitive edge in the marketplace and will earn trust and good-will from consumers, eventually affecting your bottom line

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“Truth never damages a cause that is just.”

-Mahatma Ghandi