GroupM’s chief investment officer on decarbonising advertising: ‘There’s a real danger ahead’
“The urgency behind decarbonisation is so urgent, that if we can’t get alignment or measurement, then there’s a big danger ahead,” GroupM’s chief investment officer, Seb Rennie said at IAB’s MeasureUp conference in Sydney on Tuesday.
During the panel discussion in a session titled ‘The Path to Decarbonising Advertising: Measuring our Carbon Footprint’ with Scope3’s head of JAPAC, June Cheung, PWC partner, Caroyln Cosgrove, and SeenThis sales director AUNZ, Adam Roberts, Rennie explained some of the major WPP sustainability commitments.
GroupM’s Seb Rennie.
“We’ve made commitments around our Scope One, Two, and Three, emissions reductions over the next five to seven years. So, 2025 and 2030,” he said. “When we looked at the overall emissions, we’re one of the only ad companies that have included our media buying footprint as part of our Scope Three emissions.
“To put it in context, our Scope One and Two make up about 2% of our overall emissions, and our Scope Three is 98% and about 55% is our media buying footprint,’ said Rennie. “We recognise that if we were going to deliver on the commitments we’ve made to our shareholders, we needed to make sure that we could move forward with a robust measurement methodology.”
Rennie warned that there have been a number of media carbon calculators available in the market, however upon review, it became apparent that there were a lot of inconsistencies in the way that they’ve been put together.
“The data varies by calculated by channel by market, and in order for us to meet this goal of meeting our targets, and ultimately decarbonising media, we felt that we needed to agree on a method or methodology for the measurement of it. So, our global innovation team worked with one of the big four ESG practices, some experts in the field,” he said.
“Now that our white paper is available to anyone, it’s available for download on our website because our view is that the situation around climate change and the urgency behind decarbonisation is so urgent, that if we can’t get alignment or measurement, then there’s a big danger ahead,” he said. “The industry could spend two to three years arguing about the right way to do it. So, our feeling is that we would rather push the work that we’ve done out to the entire industry and try and get that broad advocacy and broad acceptance.”
He explained: “We’re working with people like the World Federation of Advertisers at Net Zero to gain their support in that in that ambition. And that’s kind of where we’ve got to from a global perspective, more locally, we’ve done some work in Australia. One of the things that we recognized as we are looking into this is that the Australian power grid is particularly inefficient. It’s about three to four times more inefficient than the UK, for example. An impression in the UK is going to have three to four times less impact on the environment than an impression in Australia. We’ve set up something called the Digital Sustainability Initiative, and partnered with a company called Good Loop.”
He shared that Good-Loop has a tag-based measurement methodology that allows the company to measure the impressions that it generates from its digital activity on the open web.
“We’ve got the option to do offsets and then offer advertisers climate-positive action.,” said Rennie. “I think it’s really important to note just on the offsetting piece that we felt that offsetting was a step in the right direction. But, I want to be really clear that our goal is to decarbonise media not to have an offset solution. But when we got an insight into the inefficiency of the power grid in Australia, we felt that it was better to do something rather than nothing.
“This is an incremental step towards the goal of decarbonisation. What we’ve, we’ve been testing over the last two or three months, we’ve had about 25 clients, parts can partake in it. We’ve measured 216 million impressions, and today we’ve offset about 180 metric tons of carbon,” he said.
In July, WPP agency Essence launched a sustainable programmatic marketplace that will build on the media decarbonisation framework announced in July by parent GroupM.
It aims to reduce the carbon footprint of advertising campaigns, and reward publishers that are actively addressing the climate crisis in their editorial coverage.
The marketplace consists of “trusted UK publishers with clear Net Zero strategies who have committed to decarbonising their media supply”. Unlike other initiatives in the market, Essence said publishers in its sustainable programmatic marketplace are focused on decarbonising their businesses with reduction and regeneration a priority, ahead of offsetting.
“I haven’t spoken to the team at Essence in the UK, but from what I understand they’ve curated a set of publishers that meet some criteria they’ve set up for success and you know, they’re going to measure the activity there and they’ll offer that solution to advertisers who want to take part in it. But I think as we get alignment on measurement, we’ll start to find that you know, once you’ve got measurement you’re able to optimise in a more efficient and more confident way.
As for the local markets, Rennie noted: “I do expect this to happen, I think, in the next 12 to 24 months, we’ll start to see some quite the notion of carbon emissions becoming a much more important topic in the way that people allocate, their brand expenditure. It’s happening now.
“One year ago, I really didn’t know too much about this. I think lots and lots of people are on quite a steep learning curve, but I’d encourage everyone to throw themselves into it. And whilst we’ve put lots of energy into this, we completely expect to make loads and loads of mistakes. Whilst we learn loads of things, we’re going to make lots of mistakes, but I do think that we’ll get there.”
“If I look at how we’ll approach it from a GroupM perspective, so the offshoots of the white paper that we released earlier this year is that there’s going to be a carbon calculator that’s released, that’ll be at a channel level. So that will give us a view not only from a digital perspective, but across 11 other channels that we’ve measured, and that’s captured in the white paper. As that evolves, we’ll look to speak to our media partners to populate that calculator with partner-level data,” shared Rennie. “Then we can start to really get into a level of granularity to understand how advertisers can optimise their buys to reduce the overall emission load on their media expenditure. But I think marketplaces from a digital perspective will absolutely be a part of that solution moving forward.”
Scope3’s Cheung added: “From a brand perspective, people might be wondering why are these vendors out here talking about sustainability. and a lot of is actually driven by corporate. Alongside PwC, we’re working with the biggest global brands globally, measuring their Scope One and Scope Two, and they’ve got them both pretty much down pat. They all have said net zero targets by 2030, or 2050. As a digital advertising industry, a lot of brands, kind of like media agencies invest a lot of dollars into advertising. And Scope Three is actually the biggest carbon emission footprint, they have shied away from it previously. But now they know they have to really tackle it, they want to achieve the decarbonisation target.
And from a brand perspective, it’s not just the CMO, if you’re talking about viewability. No CMO, or CEO is going to say, ‘oh, what’s my viewability score for the year’, but they actually really care about their carbon footprint for the year because it’s published in their sustainability reports.”
“So, that’s one of the big drivers as well. So from a financial share price perspective, it’s impacting corporate brands, and sustainability, consumers are voting with their wallets, and they want to buy more sustainable brands. And then the third one from where there’s employee engagement. Employees want to work for big companies that have purpose, and achieving their sustainability goals is a key purpose they need to meet,” she said.
PwC’s Cosgrove noted the Australian Securities & Investments Commission ASIC has just recently put out a focus on greenwashing.
In October last year, ASIC stated it was reviewing ESG-focused financial products to understand how they’re offered to investors. Depending on the behaviour identified, ASIC will consider actions ranging from engagement to enforcement. ASIC said it has also noted that approaches by international regulators will be monitored, and in September last year they took action against ‘net zero’ statements in offering documents. Recent comments from ASIC chair reiterate the focus on ESG “…given the number of companies producing detailed climate-related disclosures in response to market expectations, [ASIC] would be “following developments closely… alongside peer regulators” and that “it is important for directors to adopt a proactive approach as developments unfold”.
“There’s also a strong awareness and push towards having some strong substance behind anything you’re putting out in the market,” said Cosgrove. “In either a green product or, you’ve put it at zero targets out that includes scope three emissions, but you haven’t even measured your scope three emissions, that doesn’t give the investor much confidence that you have a view on how you’re going to get there. So, those are the types of things that that ASIC is now paying attention to, which is also driving the company to really get to a good understanding of the measurement, and then the trajectory down.”
SeenThis’ Roberts said: “For us, our focus is about looking at where we can reduce data wastage in the development or delivery of our content. And currently, legacy technology is incredibly inefficient, and the amount of data that is required to deliver add content and ad unit what we’ve seen is the ability to apply streaming technology and much more efficient technology and the amount of data that’s actually required to deliver that same file to ad unit is a lot more efficient.
“June mentioned there, some of the emission figures, and that the internet globally contributes about 2% of global greenhouse gas emissions. 30% of the energy that is powered or used by the internet is for the transfer of data.
“Now, when you apply a streaming technology across that, what we’re seeing is, on average, around a 60% reduction in the amount of data, the same amount of data, whether the to deliver an ad unit, but I mean, there are some instances where we’re seeing that as high as 80%. So, for us, it’s about focusing on reducing that wastage and maximising avoidable emissions, and that’s really the focus of what we offer our partners and clients,” concluded Roberts.
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topics
Adam Roberts
Carolyn Cosgrove
climate change
ESG practices
GroupM
June Cheung
Net Zero
PWC
Scope3
Seb Rennie
SeenThis
sustainability
The Path to Decarbonising Advertising: Measuring our Carbon Footprint
World Federation of Advertisers at Net Zero
WPP
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