Behind Dentsu’s Anna Lungley’s search for the ‘holy grail’ – sustainable growth

In April, WPP pledged to reduce its own emissions to ‘net zero‘ by 2025 and bring emissions in its supply chain to zero by 2030; in June, IPG promised to hit net zero by 2040; Publicis made similar commitments in February. Ahead of the pack, back in October, was Dentsu International, which promised to reduce absolute carbon emissions by 46%, and offset all other emissions through scientifically-backed greenhouse gas removal methods by 2030.

Anna Lungley, Dentsu’s chief sustainability officer, claims this makes the Japanese-owned advertising network the industry leader when it comes to the big carbon crackdown. In fact, she argues climate action is central to the company’s culture.

”Dentsu is a Japanese company; it‘s been around for 100 years, it‘s likely to be around for another 100. We take the long-term view ... one of the benefits of being a Japanese holding company is that this is very intrinsically ingrained in our culture.”

Lungley joined Dentsu three years ago, after a stint as director of sustainable business at BT; she is also a senior associate at the University of Cambridge‘s Institute for Sustainability Leadership. Her job is to convince Dentsu staffers that their work can make a difference.

”The opportunity for us is to make sure that every single person, or 43,000 people [who] work for Dentsu International, understand the change that they can make in their business. If you‘re working on a CPG client to pivot their packaging strategy, you can make a huge impact in that role.”

Her toolkit includes both carrots and sticks. Executives’ bonuses, for example, are linked to performance on ESG metrics including reductions in carbon emissions and flights, or the proportion of female leadership at its agencies. On the other hand, Lungley has vetoed clients whose businesses were insufficiently green.

”I‘ve been very lucky to have been supported in that decision,” she says. ”There are sectors that we simply won‘t work with – gambling or firearms, for example. There are other sectors where we look at clients on a case-by-case basis. If we believe they’re credibly committed to this journey then we know we have a responsibility to lean in and help them accelerate. But if those clients didn‘t align with our values then we would decline to pitch.”

”It‘s the right thing to do,” she concludes.

While the push to net zero will see Dentsu agencies rein in their own carbon emissions, it’s primarily about influencing – and helping to transition – the holding company’s clients, which include 91 of the 100 biggest multinationals in the planet.

”Whether it‘s LVMH, GM or Coca-Cola, they all have really strong sustainability strategies and they want our help to help them pivot their business models and create those kind of products and campaigns. I don’t think every single organization in this world is on this journey yet ... that will change dramatically. Two-thirds of the world economy now has a net zero strategy and that will cascade through. But today, we’re leading some and guiding others.”

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And it’s not all about carbon. Dentsu has mapped out its sustainability plans parallel to efforts to make the business more diverse and inclusive on ethnicity, sexuality and gender. For Lungley, the two subjects are inextricably linked.

”The greater focus you have on D&I, the more likely you are to make progress on the sustainability agenda, and vice versa.”

The approach is based on key findings gleaned from 250 interviews conducted with NGOs, Greenpeace and activist groups such as Extinction Rebellion (XR). ”One was the breadth of reach we have through our client and partner ecosystem. And the second was our unique ability to change behavior.”

Lungley speaks to The Drum on the same day that XR demonstrators return to London for a new season of protest. Both XR and Lungley hail from the Cotswolds village of Stroud, though their strategies for persuading consumers and corporations to mend their ways are quite different.

”I think they‘ve had a huge, pivotal role to play in pushing this agenda. Advertising is one of the sectors that they’ve looked at, and quite rightly.

”We have to recognize our role in driving consumption, we have to recognize the opportunity we have to change that narrative. Activists have a critical role to play in raising awareness of these agendas, but the sector that can affect that change is the marketing and advertising sector. And we need to lean in.”

Furthermore, ahead of the COP 26 conference in November, Dentsu is emphasizing the importance of cross-industry collaboration on sustainability issues. ”There are times to compete, there are times to collaborate, this is the time to come together and to start work on this.”

Efforts in this area include joining the Business Council for Sustainable Development, Climate Alliance (a European network of businesses and governments working on the climate crisis) and cross-sector initiatives such as Ad Net Zero and AdGreen. Dentsu has also made a number of sustainability strategies developed with clients, such as Nestle and P&G, available open source.

”The objective there is ... for all the holding companies to be able to adopt and use those tools and technologies.”

Search for the holy grail

In the latest round of financial results released to the market, Dentsu Group lagged behind its holding company rivals. With its competitors reaping the benefits of 2021’s ad spend deluge, Dentsu shareholders are eager to see profits accelerate. Is the company’s ethical and green agenda at odds with its plans for revenue growth?

And what of new, decidedly unsustainable business endeavours, such as Dentsu’s dabbles in blockchain investment? Lungley says they’re accounted for in its decarbonization efforts. ”Our goals apply to every part of the business, without exception. We have decarbonized at a much faster rate than any of the other holding companies – we reduced emissions by 85% last year, from the 2015 baseline. I can’t comment specifically on performance in specific areas, but I can tell you it covers every possible business.”

Moreover, she argues Dentsu is already on the path to a model of sustainable growth. ”A sustainable business model is where you’re able to decouple growth from resource consumption. And the most successful leaders in this space are doing this really well. So the business case is now well established.

”A sustainable growth strategy is the only credible growth strategy today, because it drives cost transformation, it drives revenue opportunity, it drives employee engagement and productivity and mitigates risk.

”Actually, what you’ll see is that organizations with strong sustainability strategies will be outperforming their competitors in almost every sector. For every organization to get into that space is the holy grail.”