Seeing Is Believing: Building Customer Trust with Transparency

For nearly four years, Triarchy struggled to carve out a place for itself as a manufacturer of luxury designer jeans in a highly saturated marketplace. Adam Taubenfligel, who launched the California-based Triarchy in 2012 with his siblings Ania and Mark, describes an “uphill battle of just trying to get in front of people’s eyes.”

That changed, however, the day Taubenfligel discovered the water-guzzling wastefulness of making jeans while visiting a denim production factory in China. It can take approximately 2,900 gallons of water to make one pair of traditional cotton jeans from crop to final product. That’s equivalent to nearly 11,000 one-liter bottles of water.

Not content to be “just another irresponsibly consumptive denim brand,” Taubenfligel says he and his team completely overhauled the company into a luxury wholesaler committed to the highest standards of sustainability. This includes using eco-friendly materials like certified organic cotton, recycled cotton, hemp, and natural rubber, as well as adopting practices such as recycling any wastewater that is produced and limiting the use of chemicals in production.

But these days, it’s not enough to simply adopt eco-friendly practices, especially if a company wants to gain a competitive edge. A flood of misleading marketing campaigns, unsubstantiated claims, and other acts of greenwashing have eroded customer trust. As a result, many customers now want to be able to verify that companies are doing what they say they are doing.

To meet these demands, a growing number of companies are taking steps not only to adopt sustainable practices, but prove their veracity beyond a shadow of a doubt. If successful, the result is a trifecta of rewards: a cleaner planet, the public’s trust, and better business outcomes.

Indeed, Triarchy’s shift wasn’t just to an environmentally friendly manufacturing process – it was a repositioning of its brand to stand apart from rivals. “We made the switch because we were horrified with what we saw in denim production,” says Taubenfligel. “But at the end of the day, it’s the smartest business decision we ever made.”

Since then, Triarchy has increased revenue by 90% and its luxury denim products, ranging from lightweight button-down shirts to 70s-inspired wide leg jeans, can be purchased from some of today’s top retailers, including Shopbop, Revolve, and Nordstrom, as well as Triarchy’s Web site.

Companies are putting holistic steering at the forefront of their strategy

To substantiate its sustainability claims, Triarchy makes its eco-friendly practices completely transparent to customers through its marketing. But Triarchy doesn’t presume that customers will automatically trust its word. To cement the bond of trust, Triarchy also has its practices validated by third-party sources.

The term for this external stamp of approval is ecolabeling: the practice of using recognizable and reputable symbols to demonstrate that a company’s products and services are genuinely better for the environment than comparable products. To date, Triarchy’s ecolabels range in scope from PETA’s Approved Vegan to the Global Organic Textile Standard and Zero Discharge of Hazardous Chemicals.

Triarchy is not the only company to discover the competitive advantage of transparency in building customer trust. Today, some of the world’s biggest brands – from retail clothing chain H&M to coffee behemoth Starbucks – are embracing some of the highest sustainability standards. And they’re relying on a variety of approaches to back up their claims: from increasing visibility into supply chains, to receiving certification from well-known regulatory bodies, to savvy product design. These initiatives are providing companies with an opportunity to not only do good but also stand apart in crowded markets.

Woman in a store reading the label of a bottle

Transparency through labeling

Ecolabels date back as far as 1978, when the German government created the Blue Angel, a label awarded to companies whose products and services meet stringent environmental design standards. But what began as a stamp of approval has evolved into a strategy keenly adopted by businesses that want to both target much sought-after customers and establish a reputation as a responsible brand.

Today, ecolabels from the Fairtrade Foundation, the Global Organic Textile Standard, USDA Organic, LEED, OEKO-TEX, and many more are fighting for white space on the packages of millions of products and services around the world. And not just the ones you find in patchouli-scented natural food stores.

It’s easy to understand ecolabeling’s increasing popularity. According to an IBM Institute for Business Value survey conducted in association with the National Retail Foundation, 57% of consumers are willing to change their purchasing habits to help reduce negative environmental impact. And 71% of those who indicated that traceability is very important are willing to pay a premium for brands that provide it.

Young man working in a vegetable garden

Power to the young people

These figures are only likely to rise as younger generations gain more buying power. An SAP Insights research report identified 20% of respondents as the Passionates – a group whose strong feelings about important global issues such as sustainability directly influence their purchasing and employment decisions. For instance, the Passionates care 18% more about sustainable sourcing, and 33% more about climate change, than other respondents. Primarily comprised of younger Millennials and Gen-Zers, Passionates will grow to become more dominant over time, making them an increasingly influential market force to reckon with.

Together, these eco-conscious customer segments are giving brands good reason to clean up their acts. “In the last few years, customer demand for sustainable products has risen dramatically,” says Sandra Capponi, co-founder of Good On You, an Australian ethical ratings provider. “In fashion, the majority of people now say they are actively looking for sustainable brands, and they’re putting their money where their mouth is – spending more consciously than ever before.”

Case in point: in early 2020, retail giant Walmart ran a signage campaign in a select group of stores, advertising the company’s investment in sustainable seafood. The result: a 25% improvement in fresh seafood sales compared to the rest of Walmart’s U.S. stores.

Farmer spraying his crops using a drone

How transparency spurs innovation

Another business benefit of transparency is its power to spur innovation in sustainability techniques. Take Triarchy, for example. The company has eliminated using water to pre-wash jeans to give them a slightly bleached or lived-in look by instead taking air from the atmosphere and transforming it into ozone using specialized machinery. Particles of ozone then are released inside the washing machine, producing a vintage-style effect without the harmful use of chemicals such as bleach.

Other innovations employed by Triarchy include laser technologies that distress and add details to denim without any toxic sprays, and e-flow technology, which uses non-toxic enzymes on the skin of nano bubbles. When these nano bubbles come into contact with the jeans, they burst and create an abrasion similar to stone washing, using only minimal amounts of water and producing very little waste.

“The goal is to create a vintage-looking pair of jeans that appear as though they’ve been thrown into a vat of bleach but actually have been made using only a glass of water, instead of the hundreds of liters normally reserved for that process,” says Taubenfligel.

Why customers don’t trust brands’ sustainability claims

But for transparency to deliver a true competitive edge, companies must first gain buyers’ trust. That’s not always easy: only one out of five consumers say they would trust information given by a company itself regarding sustainability practices, according to an Ipsos Mori survey of 7,000 consumers for the Changing Markets Foundation. Unfortunately, this mistrust is well-founded. According to a review by the International Consumer Protection Enforcement Network, as many as 40% of the sustainability claims made online could be misleading.

Part of the problem is that third-party affirmations of sustainable practices come from a wide variety of sources, ranging from federal agencies to grassroots organizations. For example, there are ecolabels with the backing of governments, those that have been developed by companies, in collaborations with NGOs, by foundations, with various forms of non-profits, and those backed by private actors, says Graeme Auld, professor of comparative and global environmental politics and policy at Carleton University in Ottawa, Canada.

And then there’s the all-too-common occurrence of greenwashing. “Brands are providing some very vague claims but these backfire because, eventually, people don’t see the company as authentic,” says Magali Delmas, author of The Green Bundle: Pairing the Market with the Planet. “They go too far claiming an environmental benefit that’s not really clear or substantiated – and that’s really a problem.”

Dandelion in the wind

Strategies for sustainable trust

The good news is brands are finding new and innovative ways to signal to an increasingly educated customer that they are doing good for the planet, and that their sustainability claims can be believed. Third-party auditing and rating systems are a good way to do this; they fill a vacuum created by a lack of universal standards for sustainability across industries.

For instance, Triarchy relies on Green Story, a third-party platform, to conduct data-driven analyses of the company’s supply chain sustainability: information that is then published on Triarchy’s Web site using informative graphics. These metrics include how many kilometers of travel-related emissions the company has avoided, days of drinking water saved, hours of lightbulb energy conserved, and total square meters of pesticide-free farmland used to grow the cotton for Triarchy’s jeans.

Although clients pay Green Story to have their practices reviewed, Taubenfligel says Green Story “vets all the sustainability practices we follow and then publishes this information independently. We don’t have the ability to access or edit these findings to make us look better as a company.”

The challenges that remain

Yet there are still challenges companies must overcome if they wish to reap the business benefits of transparency. For starters, Delmas warns that the process of earning certification from well-respected agencies is often “a long one.” Even then, there’s no guarantee of winning over customers.

“One of the biggest challenges is customer confusion,” says Charles Corbett, professor of operations management and sustainability at the Anderson School of Management, UCLA. “There are many labels with partly overlapping objectives and widely varying degrees of verification and stringency. Customers cannot possibly keep up; even individuals who are experts in sustainability have a hard time deciding how to interpret the variety of labels they see in the stores.”

Luckily, organizations such as ISEAL Alliance are taking steps to create some order in the chaotic world of third-party verification, says Corbett. Comprised of more than 200 global organizations, the ISEAL Alliance has developed a set of principles for companies, governments, and NGOs to use as a framework for benchmarking sustainability efforts or internal audits.

Man entering office through glass door

Make trust all-encompassing

Done right, transparency is an important part of building trust with customers. But it’s important not to see it as a panacea. Brands can most effectively encourage sustainable purchases by “bundling” their sustainability transparency with five other key attributes: quality, status, health, money, and emotion, says Delmas. She offers the example of Tesla. The electric car manufacturer has built its success on performance, aesthetics, and acceleration, not just environmental impact.

“Brands have to think about the environment and develop products that have superior quality,” says Delmas. “That’s how you gain a competitive advantage.”

Clearly, however, transparency offers brands a big opportunity. Consumer demand for sustainability is high, and supply is low and often questionable. This means that companies that do it right will have a good chance of winning. The key is to tap into innovative technologies and business strategies that will not only sustain the planet – but also customers’ trust.