Will Radical Transparency Save the Earth?

Joelmakower Joel Makower discusses the potential for companies' transparent accounting of the environmental impacts of a product in broadening the marketplace for green products.  He cites historical green consumer research that illustrates the standard that green products need to reach in order to replace traditional products and emphasizes the need for green products to not only be transparent, but to be better than traditional products.

Posted June 16, 2009
By Joel Makower, Two Steps Forward

There's a growing school of thought that unfettered information about
the environmental impacts of our world will smoke out the bad guys and
help the good guys win.

I wish it were that simple.

I've just finished reading Ecological Intelligence, the new book by Daniel Goleman, whose 1997 bestseller, Emotional Intelligence,
helped broaden our thinking about what it means to be "smart." (It's
not the IQ test, stupid.) Now, he's turned his sights on the
environment — specifically, the quantity and quality of information
available about the environmental impacts of the things we buy. His
highly readable book describes how the lack of good information belies
the hidden impacts of our purchases — the way they are sourced,
manufactured, used, and disposed of when they are no longer of use.

Goleman calls for "radical transparency," a term I've been hearing
increasingly lately, one of those coinages that sneaks up on you en
route to becoming a full-fledged meme. Goleman didn't invent the term —
it's been around for some time — but it is a central theme of his book:
the virtuous circle that develops when companies, voluntarily or not,
lift the veil of secrecy to reveal the ingredients and sources of their
products, enabling consumers to make smarter choices, thereby moving
markets toward less-harmful products. That cycle, argues Goleman, can
occur only when we fully exploit the full arsenal of technologies and
human networks:

Psychologists conventionally view intelligence as
residing within an individual. But the ecological abilities we need in
order to survive today must be a collective intelligence, one that we
learn and master as a species, and that resides in a distributed
fashion among far-flung networks of people. The challenges we face are
too varied, too subtle, and too complicated to be understood and
overcome by a single person: their recognition and solution require
intense efforts by a vastly diverse range of experts, businesspeople,
activists — by all of us.

I can't argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold.

Like Goleman, I am a steadfast believer in the power of
transparency: the more we know, the smarter decisions we can make. But
I'm more skeptical than Goleman about how willing and able consumers
are to actually harness such information to make changes in the way
they shop and live. At least, not at the scale and speed needed to
transform the marketplace toward one that embraces sustainability, in
all its many forms.

Here's what I see as the central flaw in Goleman's case: While he is
correct in stating that the complexity and sheer number of products and
manufacturing processes requires the collective intelligence of the
global village, actual shopping choices are still made at the
individual level. And it's here that saving the Earth often takes a
back seat to simply saving the day.

It's been almost exactly 20 years since the first-ever survey of
Americans' attitudes toward making green purchases, by an outfit called
the Michael Peters Group, told us that a whopping 89% of shoppers said
that they were concerned about the environmental impact of the products
they purchased. And nearly as many — 78% — said that they were willing
to pay as much as 5% more for a product packaged with recyclable or
biodegradable materials compared with its conventional counterpart.

Since that August 1989 survey, dozens of market researchers have
unearthed similarly tantalizing findings describing consumers' interest
in aligning their purchases with their environmental concerns. But
behind those impressive numbers are some conditionals that aren't
always picked up. They sound something like this: "Yes, I'd happily
pick the greener product — IF it comes from a brand I know and trust,
IF I can buy it where I currently shop, IF it is at least as good as
the product I'm currently buying, IF it doesn't require me to change
habits, IF it doesn't cost more, and" — this last one is significant —
"IF it is somehow better — for example, that it lasts longer, performs
more effectively, saves money, is healthier for my family, or will be
perceived by others as cool."

That's a pretty high bar to clear. The result is that while the
research data haven't changed much over the past 20 years — neither
have most consumers' purchases.

Can radical transparency change this? Admittedly, things are
different now. Companies are opening up — some voluntarily, others less
so — disclosing more about their ingredients and supply chains than
ever before. Technology is helping too: the myriad blogs, widgets,
websites, and apps, and the networks they enable, are allowing more
information to be shared faster and more effectively than ever before.
An emerging era of Environmental Product Declarations is upon us, using an ISO-blessed standard
for reporting life-cycle impacts. Everyone from Washington to Wal-Mart
are demanding companies to provide more information about the
environmental (and health) impacts of what they do, and much of the
information that results is being made public.

Says Goleman: "These new approaches to managing information herald a
coming flood of data about the heretofore unnoticed consequences of a
host of common ingredients in everyday products. What had previously
been successful brands may be in danger of becoming tainted in our
minds."

But content is of little use without context. Goleman and I are both fans of a website called GoodGuide,
in which a team of researchers and credentialed experts have pulled
together millions of data points about thousands of products, on
everything from toxic ingredients to the climate policies of its
manufacturer. It makes comparing products easy, providing a high-level
view for those who want to know simply "Is it good?" and a deeper dive
for those wanting the gory details. GoodGuide's growth trajectory
during its roughly 14 months of operation suggest that there's a hunger
for this information, and that's encouraging.

Says Goleman:

Radical transparency promises to create a
marketplace mechanism that takes the consequence of shoppers' choices
to scale: each individual purchase, aggregated with all the others,
becomes tantamount to votes on the nature of the goods they buy. As
businesses respond by making more of the improvements that shoppers
want, shoppers can feel empowered by seeing that their ethical choices
matter.

In reality, this positive feedback loop hasn't worked very well. On
the one hand, when it comes to green business practices, many companies
are walking more than they're talking — that is, they're making more
green improvements than they're taking credit for. One reason is that
many of their green achievements are about "doing less bad" — using
fewer toxic ingredients, creating less waste — which are tough stories
to tell. Moreover, a lot of their most significant efforts don't end up
directly in the products or packaging — they're embedded in their
suppliers, perhaps far upstream — or aren't part of the value
proposition for those products. (If I'm buying potato chips, should I
care that the potato processors are recycling their rinse water, thus
saving millions of gallons of water and hundreds of thousands of
dollars a year? Or do I just want a salty, crunchy underpinning for my
guacamole dip?)

Moreover, these things aren't being done so much for the planet as
for profits; the fact that it has a positive environmental impact (or,
at least, a less negative one) is a happy outcome. Does consumer power
born of radical transparency play a role in spurring companies to make
such changes? Likely not.

The same is true with one of the stories Goleman tells, about how
Procter & Gamble did a life-cycle study of several of its products,
measuring their impacts at seven stages, from materials selection
through manufacturing, use, and disposal. When they plotted the various
impacts on a 3-D bar chart, one of the bars loomed far longer than any
other: the home-use stage of liquid laundry detergent — specifically,
the energy used when people do their wash in hot water. The result,
Tide Coldwater, has significant potential: if everyone in the U.S. used
it, we'd reduce household energy use by about 3 percent.

Neither radical transparency nor consumer concerns about hot-water
use had anything to do with this move. No one told them to do it. It
was simply good business: a win-win-win for the company, their
customers, and the environment.

That's where Goleman's thesis falls short, discounting that change
happens fastest when there's something in it for everybody. Sure,
increased information will get some consumers to change a little,
prodding manufacturers and markets along the way, but unless companies
make products perceived to be better, however that's defined or
measured, and can make money doing it, we won't see wholesale change at
the scale required. And all of the data in the world won't get
mainstream consumers — the 80% or 90% who aren't true-blue green
consumers — to become part of the solution.

Joel is co-founder and executive editor of Greener World Media, Inc., which produces GreenBiz.com and its sister sites, ClimateBiz.com, GreenerBuildings.com, GreenerDesign.com, and GreenerComputing.com. Joel is also the principal author of the annual State of Green Business report and the Greener by Design conference, both produced by Greener World Media.

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