- Transparency – the new (and most important) business responsibility
Transparency – the new (and most important) business responsibility
Consumers worldwide are demanding transparency from the businesses they buy from. Environmental sustainability, ethical sourcing, humane work conditions – buyers want to ensure these three factors are being upheld. But how does this work from a business perspective? What can businesses do to tackle this responsibility head-on and ensure that it continues down their supply chain?
I recently came across an article from Progressive Grocer that announced the news that The Giant Company is linking up with a company called HowGood to support their supply chain transparency initiatives. HowGood is an environmental and social impact rating system that gives consumers total visibility into how and where products are made, if the goods were sustainably sourced, farming practices, treatments of animals, chemicals used, and even labor conditions.
This type of business transparency is incredible – and it takes guts to put yourself out there. They also aren’t the first company to venture into a partnership like this, following the likes of Walmart and Danone. The way things are looking, they won’t be the last.
Historically (and unfortunately) businesses haven’t always taken such a see-through approach to their practices. A “get it done, regardless of the cost” mentality was a common drive for organisations trying to meet production demands, create their goods as cheaply as possible, all the while turning a blind eye to the environmental distress they were causing and the wake of overworked employees they left in their tracks.
Transparency is the new customer loyalty
Times are changing and organisations are stepping up by reviewing CSR and corporate policies to take responsibility for their actions. They are making a promise to not only do no harm but also benefit the environment and workforce overall. Consumers are getting smarter, more enlightened, and more willing to change their consumption practices in order to do what’s sustainable and ethical. And the proof is in the research:
According to a 2019 study by Nielsen, 73% of global consumers say they would definitely or probably change their consumption habits to reduce their impact on the environment.
Statista Research Department shows 88% of shoppers in the United States will be prompted to boycott a brand for irresponsible business actions, and 87% of them will buy products with a social-environmental benefit.
Research from Mintel reveals that more than three in five consumers feel that ethical issues are becoming more important when making purchase decisions
Accenture Strategy’s recent global survey of 30,000 consumers in 35 countries found that 66% of respondents agree that transparency is one of the most attractive parts of a company while 62% said environmental sustainability and plastic reduction.
And though the whole world isn’t on board yet, it’s obvious that there’s a steady growth of these types of initiatives and concerns.
Transparency and the Visible Commerce initiative
In the Progressive Grocer article, Manuel Haro, VP of strategy and communication at the Giant Company, is quoted as saying, “Our new partnership with HowGood reinforces our commitment to healing the planet – whether it’s through greater product transparency or reducing waste. We continue to explore opportunities throughout the Giant Company’s entire operation to do what we can to further lessen our environmental footprint and empower sustainable choices in our customers’ shopping experience.”
Reducing waste, finding sustainable replacements, putting the planet first, and keeping work practices humane for both animals and humans alike should be key objectives of all organisations. And that’s why I’m so relieved and extremely proud that at Basware, we work to provide the same sort of visibility and transparency to all organisations worldwide that transact over our business network.
One way we do this is by helping businesses automate their finance and procurement processes, by helping companies achieve paperless operations, from e-invoicing, approval workflows, and supplier management – this same data helps companies become better corporate citisens. Are any of your suppliers on a global sanctions list for example? Have any ever been accused of fraud? All questions you can answer thanks to technology and data.
This allows your business to take responsibility for not only the quality of goods and services but also the manner in which they are produced and purchased. Visibility of financial and supplier data is about more than Procure-to-Pay (P2P) solutions, although we believe this technology is a key enabler. It requires a wider shift in management attitudes toward tracking and valuing an organisation’s reputation as a responsible operator. It is part of being able to show customers, partners, shareholders, and regulators that you are not just faster, cheaper, and more efficient, but that you uphold high ethical standards that benefit society.
What this provides them, in return, is a concept we have coined as “visible commerce”. Visible Commerce is the complete visibility across all flows of money, goods, and services around the world. It’s a state where transparency and data lead to more effective and ethical decision making leading to a better world economy for all. It’s very much what seems to be the driving force behind HowGood and their services they provide.
Cultivate a culture of transparency with Basware
Our study, commissioned through the Harvard Business Review Analytic Services (HBRAS), found that global executives believe a culture of transparency is overwhelmingly important as organisations move to demonstrate more ethical practices.
Not only is it deemed important, but the report also finds that the most successful firms are nearly twice as likely to be effective at evaluating suppliers. Visibility into the flow of money, goods, and services is a defining characteristic of successful businesses. This means businesses must take responsibility not only for the quality of goods and services but also for how they are produced.
Executives are keen to do more to ensure ethical best practices amongst suppliers. However, many organisations lack the ability to effectively monitor their business partners and a lack of visibility is a significant source of risk. Our study found that 65% of procurement officers have limited or no visibility beyond their immediate suppliers.
Through Basware Procure-to-Pay (P2P), buyers can integrate master data from complex, multi-ERP scenarios and create a singular supplier data management process – giving companies that all-important single view of direct and indirect spend.
Buyers can invite suppliers to join the Basware Network and using Basware Vendor Manager, buyers can move the supplier information management responsibility to suppliers. They can also use an external data service provider to confirm and enrich supplier master data and get the visibility they were missing out on. Powered with this information, your organisation enables an “always-on” risk management approach, automates risk management, and facilitates a systematic approach to supplier monitoring.
Additionally, our carbon footprint index, as part of the Analytics KPI overview dashboard, can be used to follow developments of businesses’ CO2 indexes over time, as well as see the average carbon footprint within the Basware Network and benchmark against that. The dashboard also estimates how many trees, or how much water, a company has saved or can save if they onboard more suppliers to e-invoicing. Companies can view improvement potential per month as well.
Through continued innovations like our Supplier Management and CO2 index, Basware is doing its best to ensure companies get the most visibility and transparency possible so that they, in turn, can share that with their consumers. With visibility into all their suppliers, a more thorough understanding of their emissions, and the good they’re doing by choosing electronic and digital methods over paper and manual, businesses are better equipped to honestly and proudly answer consumer inquiries and hold nothing back – just what buyers want.