Trust but verify: From transparency to competitive advantage

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Embracing sustainability

For some time, leading companies have embraced the goal of being good corporate citizens by respecting the environment through any number of measures, from conservation to waste management. Some have taken it to an even higher level by providing tangible benefits to the communities in which they reside, both domestically and globally.

However, unlike in the past when a high level of commitment to sustainable practices was a measure of a company’s progressive thinking, today, that commitment has become a business mandate. Whereas “highest quality, cheapest price” was a customer mantra for decades, entering adulthood is a whole generation of consumers and employees who reject that notion and who have replaced it with a new set of political and social norms resulting in priorities that reward businesses that display, communicate, and verify their commitment to the environment, the workplace, and the community.

Because information about environmental impact and a company’s green initiatives varies greatly in scope and quality, the right approach to achieving this objective is difficult to determine. Like financial results, environmental data often reside across business units and systems, but the processes and controls for managing it are far less comprehensive than those used for financial data.

As environmental performance becomes an increasingly important factor in consumer, investor, and employee engagement, stakeholders are demanding greater insight into it. And many companies are finding that the more they disclose, the more value they derive from doing so. Walmart, for example, is deeply committed to reducing greenhouse gas emissions throughout its supply chain and issues a Global Sustainability Report highlighting its progress.11

Providing value to the company and its stakeholders

The trust that results from increased transparency and assurance of credibility can stem potential damage to corporate reputation, drive growth in an uncertain economy, enhance decision-making capability through more reliable data, mitigate concerns regarding the privacy and security of business and customer information, and minimize supply-chain disruption.

Moreover, that trust adds value both to companies and their stakeholders. For investors and other stakeholders, disclosure and validation of business practices or information provides greater confidence and better investment opportunities. For companies, the value lies in operational improvements, enhanced credibility, innovation, greater efficiency, less risk, and, perhaps most important, competitive and strategic advantage.


11 This report and information on other sustainability initiatives at Walmart can be found at walmartstores.com/Sustainability/7951.aspx.


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