Will Radical Transparency Save the Earth?

There's a growing school of thought that unfettered information about the environmental impacts of our world will smoke out the bad guys and help the good guys win.

I wish it were that simple.

I've just finished reading Ecological Intelligence, the new book by Daniel Goleman, whose 1997 bestseller, Emotional Intelligence, helped broaden our thinking about what it means to be "smart." (It's not the IQ test, stupid.) Now, he's turned his sights on the environment — specifically, the quantity and quality of information available about the environmental impacts of the things we buy. His highly readable book describes how the lack of good information belies the hidden impacts of our purchases — the way they are sourced, manufactured, used, and disposed of when they are no longer of use.

Goleman calls for "radical transparency," a term I've been hearing increasingly lately, one of those coinages that sneaks up on you en route to becoming a full-fledged meme. Goleman didn't invent the term — it's been around for some time — but it is a central theme of his book: the virtuous circle that develops when companies, voluntarily or not, lift the veil of secrecy to reveal the ingredients and sources of their products, enabling consumers to make smarter choices, thereby moving markets toward less-harmful products. That cycle, argues Goleman, can occur only when we fully exploit the full arsenal of technologies and human networks:

Psychologists conventionally view intelligence as residing within an individual. But the ecological abilities we need in order to survive today must be a collective intelligence, one that we learn and master as a species, and that resides in a distributed fashion among far-flung networks of people. The challenges we face are too varied, too subtle, and too complicated to be understood and overcome by a single person: their recognition and solution require intense efforts by a vastly diverse range of experts, businesspeople, activists — by all of us.

I can't argue with the premise, but my 20 years of watching the green marketplace leaves me, well, unsold.

Like Goleman, I am a steadfast believer in the power of transparency: the more we know, the smarter decisions we can make. But I'm more skeptical than Goleman about how willing and able consumers are to actually harness such information to make changes in the way they shop and live. At least, not at the scale and speed needed to transform the marketplace toward one that embraces sustainability, in all its many forms.

Here's what I see as the central flaw in Goleman's case: While he is correct in stating that the complexity and sheer number of products and manufacturing processes requires the collective intelligence of the global village, actual shopping choices are still made at the individual level. And it's here that saving the Earth often takes a back seat to simply saving the day.

It's been almost exactly 20 years since the first-ever survey of Americans' attitudes toward making green purchases, by an outfit called the Michael Peters Group, told us that a whopping 89% of shoppers said that they were concerned about the environmental impact of the products they purchased. And nearly as many — 78% — said that they were willing to pay as much as 5% more for a product packaged with recyclable or biodegradable materials compared with its conventional counterpart.

Since that August 1989 survey, dozens of market researchers have unearthed similarly tantalizing findings describing consumers' interest in aligning their purchases with their environmental concerns. But behind those impressive numbers are some conditionals that aren't always picked up. They sound something like this: "Yes, I'd happily pick the greener product — IF it comes from a brand I know and trust, IF I can buy it where I currently shop, IF it is at least as good as the product I'm currently buying, IF it doesn't require me to change habits, IF it doesn't cost more, and" — this last one is significant — "IF it is somehow better — for example, that it lasts longer, performs more effectively, saves money, is healthier for my family, or will be perceived by others as cool."

That's a pretty high bar to clear. The result is that while the research data haven't changed much over the past 20 years — neither have most consumers' purchases.

Can radical transparency change this? Admittedly, things are different now. Companies are opening up — some voluntarily, others less so — disclosing more about their ingredients and supply chains than ever before. Technology is helping too: the myriad blogs, widgets, websites, and apps, and the networks they enable, are allowing more information to be shared faster and more effectively than ever before. An emerging era of Environmental Product Declarations is upon us, using an ISO-blessed standard for reporting life-cycle impacts. Everyone from Washington to Wal-Mart are demanding companies to provide more information about the environmental (and health) impacts of what they do, and much of the information that results is being made public.

Says Goleman: "These new approaches to managing information herald a coming flood of data about the heretofore unnoticed consequences of a host of common ingredients in everyday products. What had previously been successful brands may be in danger of becoming tainted in our minds."

But content is of little use without context. Goleman and I are both fans of a website called GoodGuide, in which a team of researchers and credentialed experts have pulled together millions of data points about thousands of products, on everything from toxic ingredients to the climate policies of its manufacturer. It makes comparing products easy, providing a high-level view for those who want to know simply "Is it good?" and a deeper dive for those wanting the gory details. GoodGuide's growth trajectory during its roughly 14 months of operation suggest that there's a hunger for this information, and that's encouraging.

Says Goleman:

Radical transparency promises to create a marketplace mechanism that takes the consequence of shoppers' choices to scale: each individual purchase, aggregated with all the others, becomes tantamount to votes on the nature of the goods they buy. As businesses respond by making more of the improvements that shoppers want, shoppers can feel empowered by seeing that their ethical choices matter.

In reality, this positive feedback loop hasn't worked very well. On the one hand, when it comes to green business practices, many companies are walking more than they're talking — that is, they're making more green improvements than they're taking credit for. One reason is that many of their green achievements are about "doing less bad" — using fewer toxic ingredients, creating less waste — which are tough stories to tell. Moreover, a lot of their most significant efforts don't end up directly in the products or packaging — they're embedded in their suppliers, perhaps far upstream — or aren't part of the value proposition for those products. (If I'm buying potato chips, should I care that the potato processors are recycling their rinse water, thus saving millions of gallons of water and hundreds of thousands of dollars a year? Or do I just want a salty, crunchy underpinning for my guacamole dip?)

Moreover, these things aren't being done so much for the planet as for profits; the fact that it has a positive environmental impact (or, at least, a less negative one) is a happy outcome. Does consumer power born of radical transparency play a role in spurring companies to make such changes? Likely not.

The same is true with one of the stories Goleman tells, about how Procter & Gamble did a life-cycle study of several of its products, measuring their impacts at seven stages, from materials selection through manufacturing, use, and disposal. When they plotted the various impacts on a 3-D bar chart, one of the bars loomed far longer than any other: the home-use stage of liquid laundry detergent — specifically, the energy used when people do their wash in hot water. The result, Tide Coldwater, has significant potential: if everyone in the U.S. used it, we'd reduce household energy use by about 3 percent.

Neither radical transparency nor consumer concerns about hot-water use had anything to do with this move. No one told them to do it. It was simply good business: a win-win-win for the company, their customers, and the environment.

That's where Goleman's thesis falls short, discounting that change happens fastest when there's something in it for everybody. Sure, increased information will get some consumers to change a little, prodding manufacturers and markets along the way, but unless companies make products perceived to be better, however that's defined or measured, and can make money doing it, we won't see wholesale change at the scale required. And all of the data in the world won't get mainstream consumers — the 80% or 90% who aren't true-blue green consumers — to become part of the solution.

Note: Daniel Goleman's response can be found here.

---

FOLLOW ME ON TWITTER

CLICK HERE TO RECEIVE AUTOMATIC E-MAIL UPDATES WHENEVER A NEW ARTICLE IS PUBLISHED TO 'TWO STEPS FORWARD'

---

Comments

[Daniel Goleman]

Joel, I can see how twenty years of watching the green marketplace would leave you a skeptic about the potential of radical transparency to move the green agenda in a substantial way. But I don’t believe the last twenty years offer apt data points for projecting the next 20. It’s the future I’m talking about, not the past.

The information systems that will bring about radical transparency for ecological impacts are disruptive innovations, advances that change the game in ways the market does not expect. Ecological Intelligence is a heads up about what’s coming, and how disruptive applications of information systems like GoodGuide can trigger an entirely novel green agenda with fresh rules, one where a product’s overall ecological impacts become intrinsic to the value proposition.

Can a mass of shoppers, each making individual decisions based on ecological transparency, bring us to a tipping point where true eco-impacts are routinely weighed into a product’s value? As you point out, the last 20 years suggest not. But remember, I’m not talking about today’s shoppers – I’m pointing to the tweet-and-text generation, particularly the 13 to 23 year olds who are growing up in constant digital touch with each other. For them individual action merges into the collective, especially with digital data.

But think of the tipping point from another angle: the moment that a shift in market share catches the eye of an alert brand manger, who extrapolates into the future and sees competitive advantage in upgrading that brand’s ecological impacts. Such metrics occur when a system like GoodGuide operates in a well-defined, trackable space – say, along with Yahoo product searches or a within the aisles of a national retailer – and market share shifts due to these ratings.

Here the tipping point can be in the low single digits. Take what happened at Maine’s Hannaford supermarkets, when the retailer posted nutritional ratings (done at Yale and Dartmouth) next to the price tag of the items on their shelves. Poorly rated brands dropped as much as 5 percent in sales, with the three-star brands up to 7 percent. Brand managers started contacting Hannaford to ask what they needed to do to get higher ratings.

The more mental and behavioral effort demanded to get info, the higher its cost. At Hannaford the effort cost dropped to zero – and four in ten shoppers used the ratings to guide their decisions. The forest of green labels for products have all suffered from high cognitive costs: shoppers cannot tell at a glance how a labeled item compares to others; they may not understand the meaning of the label; they may have to go online and seek it out; they might need to do some computation of their own to use it to compare products.

[Andrea Dean]

I must say that I can't wait to read the book, being a real fan of Emotional Intelligence and aspiring to some sort of green nirvana in my life and work. I enjoyed your analysis, Joel, and Daniel Goleman's response. Let's check back in in- shall we say 20 years?

[Philipp Mueller]

I just ordered the book, but from what I read it seems that the argument is that radical transparency allows consumers to drive change. I think radical transparency goes further than just the consumers. If we look at an old case like the EPA Toxic Release Inventory, we saw that it was more a "web" of actors that changed (e.g. the CEOs of the companies now having info they could not access before, competitors using the info, media, NGOs, etc.). Not one individual strand transforms core business strategy - it would break, but the web of different actors using the data for different purposes, will. http://www.philippmueller.de/?s=radical+transparency&x=0&y=0

[Catherine McKalip-Thompson]

I think Joel is right in that consumers overstate their preferences for 'buying green' but the example Goleman gives in response about the barriers breaking down through technology such as in the Hannaford store, are indeed disruptive. I think these changes will be most successful in the baby/child sectors - what instinct is stronger than "mama bear" wanting to avoid harmful or even potential harmful impacts to her children? Make it easy with impact information next to baby/child products in the stores, you'll see a big shift.

[John Garn]

As Joel points out, context is a critical element. It appears (having not read the book) that the primary context of this book is the market, and environmental intelligence is a subset. This is totally inverted. The environment is the primary context and everything else, market included, is a subset of that. Giving consumers more information about the environmental performance of products and services is a good thing and does increase transparency, but this is really more about being a missing prerequisite of a true "free market" system then about improving the dire environmental condition of the planet through smart consuming.

The digital touch generation is woefully out-of-touch with nature and probably the most eco-illiterate generation in history. Without any environmental awareness the increased flow of environmental information won't make much of a difference in what they purchase. As pointed out in this piece, there hasn't been much consumer change in the past 20-years.

Consumers may benefit from the "virtuous circle" of increased corporate innovation but without comprehensive systems thinking and a new found ability to connect all of the dots radical transparency will only reveal that we have consumed ourselves into a mess that has no way out.

[Richard MacLean]

Makower is a battle-scared veteran of the green marketing wars. Goleman is a psychologist and science journalist; great on theory, but what about the real eco world? Joel and I often do not see eye to eye when it comes to how companies operate in the real world. Some say I’m a battle-scared veteran of the green corporate wars: been there, done that from junior engineer to VP. A few claim that Joel is overly swayed by company spin masters and propaganda. It is the source of our past disagreements on reality vs. theory in the corporate world. It was really amusing to see Joel in action laying out reality like few others have the credentials to do to a guy that is clearly out of his league on Joel’s turf.

[Danna]

I hate to say this, but GoodGuides going to have to get better before it will have that great of an impact. After seeing Daniel Goleman on Bill Moyers a couple of weeks ago, I enthusiastically went to the web-site to only be dissapointed in the slow and cumbersome use as well as the many ratings that didn't seem fair to companies that work hard at environmental stewardship just because they have naturally occuring fat in their products. I had intended to post it on facebook and send out a mass e-mail with the link, but I changed my mind.

I believe that the idea he mentions of getting the info right at the decision point would have a great impact though.

[Ryan Milani]

I too can't wait to read the book.

Unfortunately, I missed Daniel Goleman when he spoke at Dominican University a while back, but you can catch the video here.

We've also built one of those transparency apps (OpenBrands.org) that speaks to what Goleman suggests by the tweet and text generation, but I also agree with Makower, there are a lot of variables. Price and convenience have and seemingly always will, dictate buying behavior. Information simply isn't enough, although it is still a large part of it.

Now, if price and convenience are affected by openness and transparency, then transparency can and will affect buying behavior. Even to the most average of Joe's.

Thanks for the great article!

[Jim Leemann]

Like many, Dr. Goleman is a master of capitalizing on current trends. I wouldn't expect any less from him. After co-authoring "Transparency-How Leaders Create a Culture of Candor" last year, he promotes "Radical Transparency" in his current manuscript. Nothing wrong with being a master at marketing, especially when your main line of work is psychology.

Viewing Goleman's interview with Bill Moyers promoting his book, it becomes quite apparent Goleman only presents information that supports his thesis. Unfortunately, much of what he had to say in this interview, which is available on his website, is full of enviro-mythology.

Although I do not agree very often with Joel's line of thinking in his columns, I must agree with Richard MacLean, Joel has nailed it in this column.

Goleman is apparently of the "Hope and Change" persuasion believing "future" generations will provoke a massive shift in buying habits through "Tweeting" and "You Tubing." If these so-called future generations don't have the jobs that produce the needed income to purchase the traditionally more expensive "green" products, the likelihood they will change their purchasing habits based on GreenGuide is slim to none. They will do as we all have done in the past when they make a purchasing decision, even though I want to buy green, I can't afford it, so I’ll purchase what I need not what I want.

Goleman stresses in his reply to Joel that he is speaking to "future" generations not those of the past. As George Santayana once said, "those who cannot learn from history are doomed to repeat it." Based on the knowledge any of these "future" consumers possess with respect to "History," any history, I believe Goleman is in store for a terrific disappointment.

Ecological Intelligence is full of wishful thinking, which will likely have little or no appreciable impact on the buying habits of any age group, much less as John Garn notes, the out-of-touch, Eco-illiterate, digital-touch generation.

PS: On a separate note, has anyone noticed the increased use in various postings here and elsewhere of the word "collective" and “collectivism” to describe how each of us will need to ban together to sing Kumbaya and stop the impending destruction of the Earth? Note Goleman's use of it, "individual action merges into the collective." “Collective” and “collectivism” are nothing more than euphemisms for socialism – an economic theory that has failed miserably every time it has been attempted resulting in significant environmental degradation.

[Tyler D]

I think Mr Makower's point here is quite simple: without intelligence, all the knowledge in the world is not going to help us to make a better decision.

We all likely know "ecology" as the primary field of knowledge about how organisms interact with their environment, and vice versa. The notion of "ecological intelligence," therefore, aptly refers to the capacity of an organism or group to synthesize and react to knowledge about that relationship as it impacts their goals.

In its ideal form, GoodGuide, like Consumer Reports, has the potential to increase "transparency" through the production of knowledge about a product or one or more parties in a transaction. However, the production of "intelligence" is a slower, more complex and fundamental process.

I challenge these authors to consider how much of their attention they *wish to* devote to the exchange of money for goods and services. Clearly, they both enjoy and spend a good deal of time with research and authorship. Upon reading articles like this, however, I think it would be difficult for the passive reader to return to their daily lives with an enhanced attention to their emotional connection with their children.

Another important concept, and strikingly absent from this article, is morality. Individuals express morality, as do affiliated groups of individuals. With transparency comes knowledge, with knowledge and attention comes intelligence, and with ecological intelligence comes an entire Ace Hardware store of tools we can use to interact with our society -- taking the debit card out to decide between Joy or Method brand dish soap is just one of many.

[Peter Totfalusi]

Daniel and Joel, thank you for the excellent debate.
As a small business owner of an Eco-store that carries a wide variety of healthy, organic, truly natural, Eco-friendly products in many categories (did I mention Fair Trade and locally sourced as much as possible) I have to agree with Joel.
We don't know what the future will hold, and predicting what the "tweet-generation" will be like is all just wishful thinking if you are an optimist or a disaster if you are a pessimist.
We can only be sure about the present and the past history of human behaviour.
The reality that I learned the hard way is that people DON'T BUY GREEN. People shop based on their needs, price, convenience, trends etc.
Most people are willing to be more conscious about their purchase as long as it meets some or most of the criterias as Joel mentioned "IF it comes from a brand I know and trust, IF I can buy it where I currently shop, IF it is at least as good as the product I'm currently buying, IF it doesn't require me to change habits, IF it doesn't cost more, and" — this last one is significant — "IF it is somehow better — for example, that it lasts longer, performs more effectively, saves money, is healthier for my family, or will be perceived by others as cool."
The key is that the "green" products must offer significant personal benefits to the consumer otherwise it becomes a niceity.
The only time people change their everyday habits very quickly when it pains them.
Think gas prices vs. hybrid vehicles.

Peter Totfalusi
Perfectlynaturalhome.com

[Dan Romescu]

@Joel I think you underestimate (hope not real ;-)) our social networks and communications development in the last years. I admit that for most of the people radical transparency will be to much, but the social hubs can change radical some minds in their networks. Second, reduce the complexity to an understandable simplicity with no lost on information quality will be the challenge.
@Daniel radical transparency change my life, I disseminate right now your "backstories"

[John Lively]

Joel,
Who puts guacamole on potato chips? Seriously.
;-)