Wake up daily to our latest coverage of business done better, directly in your inbox.


Get your weekly dose of analysis on rising corporate activism.


The best of solutions journalism in the sustainability space, published monthly.

Select Newsletter

By signing up you agree to our privacy policy. You can opt out anytime.

Jan Lee headshot

Transparency and the Key to Consumer Trust

By Jan Lee
transparency and consumer trust

Editor's note: To kick off our upcoming series on transparency in the apparel industry, we wanted to show how traceability and transparency have influenced industries and government practices for the last 400+ years.

No issue better highlights the importance of business transparency than the recent battles about the use of genetically modified organisms (GMOs) in food. The agreement by the world’s largest cereal, soup and candy makers to label products earlier this year may have sprung from Vermont’s new GMO labeling law, but it underscored consumers’ demand that they have a right to know what they are buying – right down to the molecule.

So did a 2015 survey by the Center for Food Integrity (CFI), which said that consumers hold manufacturers primarily responsible for that communication. The stores that sell the products, the restaurants that serve them and, in some cases, even the farmers or ranchers who grow or raise the food hold less responsibility for keeping consumers in the know than the guys that source, make and package the food.

Transparency: An age-old demand

But the consumer demand for transparency is anything but a new trend. People have used the collective voice to influence market quality and vendor decisions for hundreds if not thousands of years. In the 18th century, French peasants rioted to draw attention to the lack of quality bread and corrupt business practices in the grain industry. The riots became one of the fertile seeds for the French Revolution. In the 19th century, the growing automation of the textile industry in Britain was viewed with suspicion by Luddite artisans. Although the textile workers didn't succeed in curbing the use of mechanized looms, their distrust toward what they viewed as a subversion of their industry helped to mark this important change in the garment industry.

Consumer conscience has also played heavily into issues of transparency. The 18th- and 19th-century child labor laws that emerged in England and the United States were the first guidelines to regulate how people were treated in the labor force. They highlighted abusive labor conditions and helped send a message to mill owners and other employers that the public was watching and expected better business practices. It also sent the message that there were consequences for irresponsible labor practices.

Across the board: It's the vital link to success

Today, most companies know that business transparency is vital to creating a reliable consumer base. Buyers want good products, but they aren’t necessarily willing to take the manufacturer’s word for it. They want “openness, ongoing communication and public accountability,” says Peter Levesque, president of the Ottawa-based Institute for Knowledge Mobilization (IKM). And these expectations are increasingly driving the way companies work.

Buyers want the ability to influence the way that the appliances they use in the kitchen are made. They want ongoing communication about the funding that builds sports complexes, the information that schools collect about their students and how they use it, and the human costs of the wars our governments undertake. And buyers want accountability by companies and nonprofits for how they spend the money they earn from consumers.

Buyers also want to know that corporate supply chains and business affiliations share the values the company or organization presents to the public. They want to know that the cereal they eat is sourced with good ingredients and made with the ethical choices they expect of the company. And they want to know that the organization's values are reflected in the decisions it makes and stands by -- including its political decisions.

Certainly one of the most interesting examples of this triad of expectations is the ongoing pressure Google received for its decision to live-stream the Republican convention, which will host Donald Trump. Many would say it is Google’s decision to make. Others argue that when it comes to consumers’ views of current affairs, the company’s business decisions are reflective of its accountability to those who use, pay for and support its growth.

In comparison, ice cream manufacturer Ben & Jerry's continues to get high praise from consumers not just because it says it sources ethically, but because it also aligns its political decisions with those it feels best reflect its consumer base -- and it does so publicly.

Not just about food and products, either

But the demand for transparency isn't always related to what we buy. Religious organizations that appear not to live up to the ethics and morals of their times have been subject to harsh rebuke. The scandal concerning the Catholic Church in the U.S. and Canada and the alleged cover-up of child abuse has not only shaped public opinion, but also the actions and expectations of the church itself.

And yet, religious organizations have often played remarkable roles in shaping and encouraging transparency in business sectors. The Sisters of St. Francis of Philadelphia Congregation has helped to shape and strengthen transparency in the environmental sector through shareholder advocacy for years. Similarly, the Jewish rabbinical organization, Coalition on the Environment and Jewish Life (COEJL), uses its strength to highlight environmental issues and press for increased dialogue and government and business accountability.

Meanwhile, sporting organizations have found that pleasing fans isn't always just about giving a good, rousing game. Loyal patrons want to know equal treatment,  sound governance and a respect for human rights are part of the organization's mission statement. Labor scandals in Qatar and charges of corruption in the governance of the Fédération Internationale de Football Association (FIFA) catalyzed a more earnest effort to show transparency in the sports industry. In both cases, organizations had to acknowledge that increased accountability and communication are driving forces to their success.

Historians suggest that true change in the public's ability to influence business practices really owes its start to the Industrial Revolution and the mechanized boost it gave to the textile industry during the 19th century. If so, it did more than revise business ethics. It transformed the way we look at the consumer and the small, still voice that continues to drive progress to this day.

Image credit: Unsplash

Jan Lee headshot

Jan Lee is a former news editor and award-winning editorial writer whose non-fiction and fiction have been published in the U.S., Canada, Mexico, the U.K. and Australia. Her articles and posts can be found on TriplePundit, JustMeans, and her blog, The Multicultural Jew, as well as other publications. She currently splits her residence between the city of Vancouver, British Columbia and the rural farmlands of Idaho.

Read more stories by Jan Lee