Feature

Going green: how adland is risking new business to back the planet

The advertising sector is turning its attention to environmentally sustainable practice – but that means navigating challenging conversations with industry partners, a potential loss of work and growing scrutiny from consumers and activists.

Climate change: ad agencies have hurdles to overcome in their pursuit of sustainability [Getty Images]
Climate change: ad agencies have hurdles to overcome in their pursuit of sustainability [Getty Images]

“Our house – the planet – is literally burning and we need to put it out,” Adam&Eve/ DDB’s chief production officer, Anthony Falco, says.

The advertising sector is attempting to come to the rescue. In November last year the Advertising Association launched its Ad Net Zero initiative, pushing environmental sustainability to the top of the agenda. More than 80 brands, agencies, media owners, tech platforms and trade bodies have signed up, with the aim of achieving net zero carbon emissions by 2030.

Cutting back on the use of plastic and energy in the office, reducing business travel, changing the location of and the way ads are shot, and offsetting emissions – for example by funding tree-planting – are among the tactics being used to reach the goal.

Yet despite these efforts, the sector faces major stumbling blocks in pursuit of “green” credentials. Agencies have faced public criticism from lobbying groups, which are calling for them to boycott fossil fuel companies. Brands are having their ads pulled by the regulator for overstating their sustainability efforts (“greenwashing”). In addition, not all agencies can adapt at the same speed, meaning some risk being left behind.

It is also becoming clear that there could be an immediate business impact for companies that are slow to change. A survey of agencies conducted by Campaign reveals 23% are turning down work with industry partners if their sustainability credentials are not up to the mark. A further 60% plan to do so in future.

And it works both ways. Brands say agencies’ sustainability plans will determine whether or not they win pitches.

“I think increasingly what you’ll see is that [it] will be a differentiator for which agencies get business or don’t get business,” NatWest Group chief marketing officer Margaret Jobling says, adding that the bank, which is an Ad Net Zero supporter, is currently auditing its ad agencies and suppliers.

Elsewhere, EON’s head of brand and marketing, Scott Somerville, says that the company, which is another Ad Net Zero signatory and, since 2019, has been supplying only renewable energy to customers, has a “good” relationship with its agency Engine on sustainability matters. However, he adds: “I absolutely wouldn’t hesitate [to turn down agencies] in the future.”

Efforts ramp up

Pressure is building on several fronts. At the UN’s latest annual Conference of the Parties (COP26), which takes place next week in Glasgow, global leaders will discuss how to reach the goal of net zero carbon emissions by 2050.

Meanwhile the UK government has launched a consultation on mandatory climate-related financial disclosures.

The consultation, which closed in May and is awaiting government response, says: “These proposals build on the expectation set out in the government’s 2019 Green Finance Strategy, that all listed companies and large asset owners should disclose in line with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations by 2022.”

It would mean large companies such as Unilever and BP would be required to report on the metrics and targets they use to measure their effect on the climate, as well as their governance approach to, management of and impact on their business strategy from climate-related risks.

Many major brands have already been doing a huge amount of work to tackle their carbon footprint, due to their higher output, according to Iris global chief strategy officer Ben Essen, but now adland must lead the effort.

He says: “We have been behind as an industry, because there’s been that sense that sustainability is a bit more of an operational thing, that it’s more about supply chains than comms.

“The time has only come now where we can actually lead but we are only just beginning to realise there is an opportunity to lead as an industry.”

Campaign’s survey of 31 ad agencies, which between them employ about 18,500 staff, shows almost four in five have set themselves a goal of reaching net zero carbon emissions by 2030 and, of those, 87% say it is “highly likely” or “likely” they will achieve it

All agencies said they were reducing plastic use, while 90% said they were cutting energy consumption in the office. About a third said they were sending fewer people to shoots and carrying out more of them in the UK, while a handful (five) said they were reducing the number of shoots for a campaign.

When it comes to business travel – the biggest source of carbon output for agencies, estimated at 58% of overall emissions by the Advertising Association – four in five said they were cutting trips abroad and three in five were reducing UK travel.

‘The industry needs to take everyone with them’

Practical challenges have slowed agency progress so far. Until the recent launch of the Advertising Association-backed carbon calculator by AdGreen, there was no cross-sector agreement on how to measure emissions created by ad campaigns.

Use of the calculator does involve agencies having to ask advertisers to pay a recommended 0.25% of a campaign’s production cost, up to a maximum of £2,500, to fund it. But Katie Keith, global head of content at Havas and global head of procuction at Havas London, says “in the grand scheme of things [it is not] a large amount of money”.

In recent years, several accreditation schemes, including B-Corp, the ISO standards and Science Based Target initiative, have sprung up. The lack of a standard scheme is unhelpful, according to Jobling, a recent chair of one of Ad Net Zero’s working groups.

It is “untenable” for larger, global agencies to be working with “52 versions” of a scheme, if industry partners are using different options. “You want one standard – and the industry isn’t run as one global industry, so there are a lot of challenges with the big guys,” she says.

For its part, the Advertising Association says it is “providing guidance for Ad Net Zero supporters on the different sustainability accreditation schemes as they each have a value”. It aims to launch a certificate next year, which “will set the industry standard for best practice in sustainable advertising operations”.

Among smaller agencies, the potential problem is being unable to keep up with the evolving standards. “The industry needs to take everyone with them – they can’t just raise the ceiling and then the floor drops out the bottom, because we need those agencies,” Jobling says.

Influencing change – or losing work

Brands and agencies need help from each other with their sustainability efforts. But while 65% of agencies in Campaign’s survey said brands wanted to see environmentally friendly practices in place, only 10% said clients “always” asked for this information, with 37% saying they got the request “fairly regularly”.

Agencies say they are prepared to turn down work with brands and other industry partners if they aren’t committed to making changes; 83% will not pursue a contract in this instance.

Iris uses a three-stage “traffic light” grading system on a case-by-case basis to assess whether it should work with clients, a process that factors in how far the agency believes it can influence the brand’s sustainability.

The agency says it prefers this approach to an outright boycott of working with certain sectors. “We had a big debate around do you just boycott whole industries, and then we realised if you were going to do that, you’d basically boycott all of them,” Essen says.

In some countries, new laws prohibit fossil fuel energy ads: France is to ban them altogether and, in the Netherlands, Amsterdam does not allow them on its subway system.

More widely, lobbying groups such as Fossil Free Media have been calling for ad agencies to stop working with non-sustainable energy companies. Through its campaigning initiative “Clean Creatives”, the group has called out more than 90 agencies, including those within holding companies WPP, Omnicom, Dentsu, Interpublic, Havas and Publicis, for working with fossil fuel clients.

Iris is among those agencies on the list, having worked with Shell about five years ago. It doesn’t produce Shell's ads any more, but does provide consultancy services, and the agency still has other high-carbon clients, according to Essen.

“We believe you can be close to the problem, as long as you’re solving the problem,” he says.

Handling conversations in which the agency will “raise difficult questions” is a delicate matter, though, he adds.

“We had a pitch for an airline client and we had a big debate. We said we were going to go for it, but we’re going to start the RFI by calling out the elephant in the room and saying ‘it’s high carbon flying around the world’.”

At Dentsu International, which Clean Creatives marks out for its agencies' work with Ampol and Chevron, the holding company says it is important to be “working with clients to help pivot their business models” and ensuring consumers make more sustainable choices in the products and services they buy and use.

In a recent interview with Campaign, chief sustainability officer Anna Lungley said: “We have to address our role in driving consumption and help accelerate the shift to more sustainable behaviours. We've not taken full responsibility for the end-to-end impact of the campaigns that we deliver and the influence they have on society. And we need to start considering that possible planning process.”

The holding company says advertising "can play a central role in helping businesses to transform in response to the climate emergency and accelerating the societal shift towards sustainable behaviours", adding that Dentsu has committed to additional net zero targets on top of existing 2030 goals.

Omnicom-owned Adam & Eve/DBB also appers on the Clean Creatives list, due to its ongoing work with Exxon. Falco acknowledges boycotting in general is “something we [the agency] haven’t discussed to the extent that we need to”, but was unable to comment further.

“We have a long-standing relationship with Exxon over many years... people’s views are rightly changing and Clean Creatives is a great thing to bring to the public to remind of the importance of sustainability,” he adds.

The energy companies themselves stress the importance of oil and gas while the sector transitions to lower-carbon energy, and the need to be included in ongoing debates about shifts in policy.

A Shell spokesperson says: “We’re already investing billions of dollars in lower-carbon energy. To help alter the mix of energy Shell sells, we need to grow these new businesses rapidly. That means letting our customers know through advertising or social media what lower-carbon solutions we offer now or are developing."

A spokesperson for Exxon adds: "We believe that sound public policy is achieved when a variety of informed voices participate in the political process. For these reasons, we exercise our right to support and participate in policy discussions.

"We have a responsibility to our customers, employees, communities and shareholders to represent their interests in public policy discussions that impact our business."

Greenwashing fears

For those brands successfully reducing their carbon footprint, there is a final hurdle. Many brands want to jump on the “green bandwagon” by producing ads that promote their own sustainable practice, Jobling says. But if they mislead customers by overstating their green credentials they will be found out by customers, she warns.

“The gap between what you say and what you do is a big ‘watch out’", so adland has to “mind the gap” to ensure ads don’t fall foul of greenwashing, Jobling adds.

“Brands have an absolute responsibility to take a lead on this and do the right thing,” she says, but with the understanding that “we are not perfect, we are on a journey”.

NatWest, Jobling claims, has no fear that it will fall into greenwashing due to the group's rigorous process for checking claims in its ads. However, it, too, has been criticised by lobbying groups for financing fossil fuel industries. The bank has committed to stop lending to and underwriting major oil and gas producers unless they have agreed certain sustainability plans by the end of 2021, and it will stop financing coal by 2030.

Consumers are prepared to report ads to the regulator over greenwashing. In the past 12 months, the Advertising Standards Authority has received 666 complaints about environmental issues, relating to 400 ads, of these, 51 were banned.

At the start of 2022, the Competition and Markets Authority will launch a review of misleading green claims. It will focus on industries where consumers are most concerned, such as textiles and fashion, travel and transport and FMCG.

Earlier this year it released its Green Claims Code to advise companies on responsible messaging; the ASA’s sister body, the Committee of Advertising Practice, will do the same.

A recent survey by the Chartered Institute of Marketing found just under half of the 200 UK marketing professionals taking part are wary of working on sustainability campaigns, fearing their company or clients might be accused of greenwashing.

In future, there may be further regulatory pitfalls. The ASA intends to look more closely at “social responsibility issues” in ads, including those that encourage unsustainable behaviours or behaviours likely to harm the environment.

While this is not “a key concern for those who complain to us... to date”, the ASA says “this is an area that we believe will require greater regulatory scrutiny in future” to ensure consumer behaviours change.

‘It’s an individual problem’

Ultimately, the advertising sector is only a small part of an international movement that is required to tackle the problem, Falco says. “We’re humans. It’s not an advertising problem, it’s a global problem, it’s an individual problem.”

And, as individuals, ad professionals could vote with their feet and choose not to work at companies with less successful sustainability efforts. Agencies are acutely aware of the risk; 87% of those surveyed by Campaign said it would be “significantly” or “slightly” harder to recruit and retain staff by 2030 if they had not made serious progress.

In the end, personal choices could prove to be one of the most powerful ways to help organisations change.

As Iris chief transformation officer Maktuno Suit puts it: "It's 2021 and already our progressive people expect us to be leading the way on this.

“People want to work for a company that is part of resolving the climate crisis rather than driving consumerism that drives it and this is increasingly becoming a key part of their decision to join or stay at our organisation.”

Main picture: Getty Images