Sustainability: New regulations can help marketers move forward on climate

Regulatory shifts in corporate sustainability reporting are leading the ad industry toward standardized emissions measurement. This will push marketers toward further work on their sustainability goals says Martin Bryan, global chief sustainability officer at IPG Mediabrands.

Every action a marketer takes needs to connect to the bottom line. Sustainability can provide a great conduit to profitability, yet marketers have had an uneasy relationship with environmental communication over the years. 

On the one hand, authentic and substantiated communication of environmental credentials activates a growing segment of consumers. On the other, disclosing these credentials may open brands and their claims to intense scrutiny and, when done incorrectly, can lead to accusations of greenwashing.

A study by climate consultancy South Pole, for example, showed that 58% of companies are planning to decrease external communications about climate action due to public reception. This is despite the acknowledgement by 81% of those polled that communicating about net zero goals is good for their bottom line.

A big issue here is complexity – together with a (lack of) consistency – in the data underpinning authentic eco-communications. In the media and advertising sectors, for example, we have historically lacked a common, consistent approach for measuring emissions associated with our work. Different agencies use different frameworks, leading to inconsistently reported carbon footprint estimates.

This is set to change. Significant shifts in the regulatory landscape regarding corporate sustainability reporting are going to force our industry to be more consistent. But rather than a constraint, it’s an opportunity for marketers. It will enable us to embrace and celebrate climate action efforts, communicating with confidence according to consistent, concrete criteria.

Seismic regulatory shifts

In January 2023, the Corporate Sustainability Reporting Directive (CSRD) came into force in the European Union (EU), requiring some to report as early as 2025. In the US, the SEC recently adopted rules on climate-related disclosures and California has pressed ahead with the Climate Corporate Data Accountability Act (CCDAA) and Climate-Related Financial Risk Act (CRFRA), which were passed in October 2023. The CCDAA categorizes GHG emissions by scope, requiring companies with total annual revenues exceeding $1bn doing business in California – not just based there – to disclose Scope 1 and 2 emissions starting in 2026, and Scope 3 emissions starting in 2027.

The inclusion of Scope 3 emissions reporting is significant as it includes the carbon footprint in a company’s value chain.

3 steps marketers can take to support positive climate action

In light of the regulatory changes, the advertising industry is moving quickly to ensure that there is consistency in the measurement of Scopes 1, 2, and 3 emissions. Here are three steps marketers can take to engage with this process and enhance their organization’s ability to measure and communicate their sustainability credentials.

1. Collaborate with industry partners

There are considerable actions that marketers can tap into to support progress in the industry and prepare for coming changes. An important first step is to engage with organizations working to promote positive climate action in advertising such as Ad Net Zero and the WFA’s Global Alliance for Responsible Media (GARM).

These groups have brought many of the ad industry’s major players to the table to:

• Produce consistent industry emission measurement standards;
• Create a common set of RFI questions for the market, on behalf of agencies and partners, to create consistency for sharing and measuring climate emissions data;
• Provide practical steps to optimize environmental, social, and governance (ESG) practices in-house;
• Introduce tools and best practices to reduce and measure emissions;
• Drive sustainability thought leadership;
• Incorporate sustainability into the creative process from the brief phase and throughout, to unlock meaningful societal behavior change.

Doing so will help media vendors become stronger partners for their clients as new regulations take effect.

IPG Mediabrands also has developed a proprietary Media Responsibility Index (MRI). The MRI is designed to raise industry awareness and standards around harm reduction for brands and consumers; we have recently expanded it to 12 new markets across EMEA, Australia and India, collecting information on 200 partners across five media types with ESG-aligned priorities (data ethics, privacy, inclusivity and sustainability) for partner accountability.

Collaborate with colleagues

Marketing and sustainability teams should walk in lockstep, and joint planning sessions are well worth considering. Close collaboration between the CMO and the CSO means an organization can tell an authentic sustainability story to the right audience at the right time and derive commercial value. A recent combined study from IPG Mediabrands, Teads, and Project Drawdown quantified just how important sustainability is as a driver of purchase intent.

In a survey of individuals from the US, UK and Australia across age, gender, race/ethnicity, and income, two-thirds (66%) of consumers making grocery purchases ranked sustainability as a high (or highest) priority. Purchase intent in other categories was equally impressive:

• Household cleaning products – 58%
• Cars – 53%
• Clothing and shoes – 50%
• Beauty or personal care products – 49%
• Technology – 48%

(Conversely, the study showed that 59% of people think worse of companies that appear to engage in insincere sustainability efforts.)

Maintaining the feedback loop between sustainability and marketing teams also enables organizations to select and celebrate media or advertising partners that are able to offer additional climate-focused services. Sustainability-value-adding services – such as those offered in IPG Mediabrands’ Climate Action Accelerator Program – might include leveraging media investments to solutions like:

• Renewable energy certificates (RECs)
• Bespoke sustainability research (in partnership with Cornell University, IPG Mediabrands research partner)
• Purchasing carbon credits, where appropriate, through a vetted, third-party partner

Companies should strongly consider the impact of their impact as advertisers. While the CMO and CSO collaboration is vital, these teams need to be internal advocates, making every job a sustainability job. This mindset carries the profit and purpose message to the rest of the organization to drive climate action effectively and efficiently throughout the business.

Collaborate with trusted NGOs

To move the sustainability needle meaningfully requires connection, collaboration, and clear communication between individuals and industry, between for-profit businesses, NGOs or not-for profits and government bodies. Consequently, one of the most positive actions our industry can take is to use our craft to support organizations working on sustainability.

We can provide the platform, support research, sharpen messaging, and leverage our abilities to influence consumer behavior – help that many of these organizations badly need. As Dr Jonathan Foley, executive director at Project Drawdown put it:

“In the climate conversation, we’re small environmental non-profits – a bunch of scientists with small budgets. It’s really important for us to find good allies who can help us understand how better to communicate and how to tell the story in ways that can make a difference.”

Clearly messaged, authentic environmental credentials can deliver to an organization’s bottom line. The change in the regulatory landscape for sustainability reporting provides the scope and the motivation for communicating climate credentials (with confidence). Advertising industry bodies are poised to support marketers on this journey with clear, standardized frameworks to measure emissions in advertising – and already provide practical guidance on improving sustainability. These resources are a good place to start:

• GARM and Ad Net Zero Guide to Sustainable Media
• Ad Net Zero’s comprehensive sustainability training for advertising professionals
• Project Drawdown: Climate Solutions 101

The time is right to make meaningful change - profit and purpose are aligned. It’s now time to act on sustainability.