Transparent Business Operations: Converging Business Risks and Reputation Management
In the realm of Environmental, Social, and Governance (ESG) investment, a growing trend is taking centre stage: business transparency. With consumers increasingly demanding trust and openness, particularly in relation to ethical practices, transparency is becoming a critical differentiator and integral to brand equity.
According to recent statistics, 87% of consumers are willing to pay more for brands they trust by 2025, indicating that trust has become a crucial factor in consumer decision-making [1]. In the context of ESG investment, transparency is essential for companies to attract capital and maintain reputation. ESG-focused investors require clear, consistent disclosure on environmental and social impacts, including how companies manage human rights risks like modern slavery [5].
The issue of modern slavery in supply chains is also being addressed through transparency. Companies are under growing pressure to rigorously monitor and publicly report on labor practices across their entire supply network. This trend aligns with wider regulatory and consumer expectations for supply chain visibility, aimed at detecting and preventing abuses [3]. Legislation such as new pay transparency laws in Minnesota and New Jersey in 2025 reflects a broader push for openness about labor conditions, indirectly supporting anti-slavery efforts [3].
The future implications of this trend are significant. Brands failing to improve transparency risk losing trust and competitive edge, as consumers favour companies demonstrating ongoing honesty and ethical consistency [1]. ESG investing will increasingly hinge on verifiable transparency, requiring companies to enhance data quality and reporting to meet investor demand [2][5]. Legal frameworks are likely to expand, demanding greater supply chain accountability to eradicate modern slavery and improve labor rights, forcing companies to integrate transparency into their operational and compliance strategies [3][5].
Technology, including AI and data analytics, will also play a growing role in enhancing transparency by enabling better tracking, reporting, and verification of ESG and ethical performance across complex supply chains [4][5].
In a collaborative video series, Ashley Morgan and Dipika Keen delve deeper into the ramifications of business transparency and future developments. The series features discussions on modern slavery risks in supply chains and ways to address them, as well as insights from experts like Carrie Brassley from Unseen UK, a charity that helps businesses identify modern slavery risks in their supply chains [3].
The video series is available on the business transparency Insights page. If you're an investor interested in understanding the impact of business transparency on the businesses you're involved in, this series is a must-watch. The second video in the series features Helen Parsonage discussing business transparency from the investors' perspective, while the third video features Carrie Brassley from Unseen UK [2].
In conclusion, business transparency is transitioning from a peripheral benefit to a central strategic imperative, particularly in ESG investment and combating modern slavery. Companies embracing this trend can achieve stronger trust, risk management, and market positioning [1][3][5].
- As ESG investing continues to grow, it's essential for companies to focus on policy-and-legislation surrounding transparency, as clear, consistent disclosure on environmental and social impact, including human rights risks, is crucial for attracting capital and maintaining a positive reputation.
- The growing trend of business transparency in the context of ESG investment and combating modern slavery has significant implications for the future, as legal frameworks are likely to expand, demand greater supply chain accountability, and force companies to integrate transparency into their operational and compliance strategies.
