Radical Transparency (Continued)


Some weeks ago, I wrote a post critical of or maybe just skeptical of the claims of radical transparency made by Dan Goleman in his book, Ecological Intelligence. This followed a post about the consumer information website, GoodGuide. Goleman sees this new way of shaping consumer choice as a prime example of radical transparency, defined as providing enough information to a buyer so as to shift choice towards the best performing products according to a complex sustainability scoring system.

I saw the complexity to be the antithesis of transparency. Today I read an article on Greener Design that makes the same argument. It's always nice to have company, especially when taking a critical or oppositional point of view. The argument was embedded in a piece about the difference between the way information is used in business-to-business (B2B) transactions and business-to-consumer (B2C) relationships.

Jason Pearson, CEO of the research and design institute GreenBlue starts with this summary.

In the context of the recent GreenBiz debate about radical transparency, I believe the following three points are critical:

  1. Business-to-business (B2B) transparency is a powerful engine for sustainability.
  2. Real-life examples of B2B transparency as an engine for sustainability already exist.
  3. Contrary to comments on GreenBiz that the consumer website GoodGuide is a model of transparency, by our standard GoodGuide is a well-intentioned but not transparent endeavor, and it is counterproductive to hold it up as such a model.

The difference Pearson notes is primarily due to the complexity inherent in any sustainability scoring system that attempts to aggregate many factors into a single index. Pearson believes that businesses are used to and can cope successfully with this complexity. Consumers look for just the opposite, simplicity, and are confounded and put off by the complexity. Pearson writes:

GoodGuide clearly recognizes that consumers expect simplicity in making decisions. But to achieve this simplicity, the website sacrifices transparency and pretends to a level of precision it does not achieve.

Transparency would be full disclosure of the algorithms used to compute the numbers. Transparency would be full disclosure of the underlying data. Transparency would be full disclosure of the level of uncertainty embedded in these calculations.

Even after noting the self-interest of GreenBlue (they have their own set of sustainability criteria and focus strongly on B2B), Pearson raises important questions about GoodGuide and the effectiveness of complex sustainability indices in general. All this does not mean that these system are not useful, only that radical transparency is too strong a descriptor. This kind of labeling is my major concern. It promises more than it is able to deliver.

I have similar concerns about the potential utility of the recently announced Wal-Mart sustainability index. It may help Wal-Mart's suppliers to work their way toward best practices, but it is unlikely to guide customers to the "right" sustainability products, even if such products do really exist. And that is a question to examine another day.