The road to greater business transparency

We’ve just published a business case for greater transparency as well as documentation around ETI’s direction of travel on the issue. They mark the beginning of ETI’s work on transparency. In this blog, David Bezagu, our Senior Advisor, Accountability, explores some of the key topics addressed in these documents and ETI’s next steps.

You don’t have to do a lot of research to find recent examples of initiatives linked to the transparency issue:

• in September, an alliance of investors and various institutions announced the launch of the World Benchmarking Alliance, aiming to publicly rank companies against the Sustainable Development Goals,
• in October, Provenance, a consumer-facing app – which has been at the centre of attention within the tech and sustainability communities for three years – ran its #OpenOctober campaign; and,
• in November, the publication of the Paradise Papers, a fifth massive leak of data in three years spotlighted alleged suspect tax practices of various companies and individuals.

These all illustrate the irresistible momentum that lies behind the movement towards greater transparency.

Yet this movement, which can be a source of anxiety and negative coverage for businesses as in the case of the Paradise Papers, can also be a driver of positive change for those same businesses and workers in their supply chains.

Back in 2015, ETI recognised this and integrated transparency into our Perspective 2020 strategy. We are now pleased to have published our first formal documentation on transparency and are looking forward to the next steps.

Our first transparency documentation

Our Business Case Towards Greater Transparency and ETI Direction of Travel mark the beginning of our work on transparency. They have been created under the supervision of a tripartite advisory group (1) and aim to lay the foundations for more in-depth and concrete work to come.

From compliance with legislation to embedding better practices internally, our Business Case outlines the key benefits for companies in becoming more transparent.

Importantly – and this is something that is usually missing in papers covering transparency – each benefit has been evidenced as much as possible with references to case studies, market analysis and articles.

The Direction of Travel clarifies the direction ETI wants to take on transparency. It also outlines 10 principles that will guide our work and decisions on this topic.

These are principles such as demonstrating leadership, pursuing concrete outcomes, using a tripartite approach and aligning with other initiatives.

A transparency roadmap

Looking ahead, our next task will be to define concrete expectations for our members and ourselves with a transparency roadmap. This will make clear:

• what information should be disclosed in a context of ethical trade,
• why disclosing this information matters for companies – and for workers in their supply chain; and,
• how information should be disclosed.

There are many different factors to be considered as part of this complex piece of work.

These include how to address the legitimate concerns of our members? And whether transparency means different things to brands, retailers or suppliers? Or even for different industries?

We will therefore be consulting with all our members to make sure that we understand these different perspectives.

What’s clear is that ETI’s tripartite approach puts us in a unique position to address a sensitive topic which has so far been approached in a fragmented way, with many different agendas being promoted.

Such fragmentation has left businesses with no well-defined and concerted guidance, making it difficult for them to know what the right action plan should be.

This lack of clarity was one of the key concerns mentioned by company members at our latest company roundtable in November. We’re keen to ensure it’s addressed.

(1) Current members of the tripartite advisory group are H&M, John Lewis Partnership, Winfresh, ITUC, TUC, Oxfam and CAFOD.