By David Shaw, Co-Founder and CEO, Cedara
In an era marked by an urgent global push towards sustainability, digital media businesses find themselves at the forefront of environmental accountability. As discussions around climate reporting, net-zero targets, and industry-wide media measurement initiatives gain momentum, the importance of including media delivery measurements across a complex supply chain within Scope 3 emissions is becoming increasingly evident.
Yet while some agencies, media vendors and publishers have started measuring their organizational emissions, many have ignored their core activity – delivering ads, which in most cases accounts for more than 90% of their overall corporate emissions.
So, how can digital media companies take a different approach towards sustainability that incorporates all areas of their business and consequently avoid greenwashing?
Understanding the Three Scopes
To comprehensively address and mitigate carbon emissions, it’s imperative to grasp the nuances of the Three Scopes.
Scope 1 emissions represent direct greenhouse gas (GHG) emissions from sources that are owned or controlled by the company, often posing minimal relevance for digital media businesses. The absence of company cars and furnaces eliminates major contributors, with potentially minor emissions stemming from refrigerant leaks in AC units in offices.
Scope 2 emissions refer to indirect GHG emissions that result from the generation of purchased or acquired electricity, steam, heating, or cooling by an organization. For digital media businesses, this mainly constitutes powering their offices which contributes less than 1% of total emissions.
Scope 3 emissions encompass a broader range of indirect emissions such as marketing, business services, office supplies, employee expenses and commuting. Media delivery emerges as the primary contributor of emissions for digital advertising companies. In fact, excluding media delivery emissions in Scope 3 reporting may result in less than 10% coverage, leaving a significant gap in the environmental impact assessment.
The Net-Zero Dilemma
Setting net-zero targets without accounting for media delivery emissions in Science Based Target Initiative (SBTi) submissions is akin to greenwashing. Neglecting the essential day-to-day product of digital media businesses undermines the credibility of net-zero claims, akin to a concrete manufacturer excluding concrete production from its net-zero submission.
While the SBTi plays a vital role in overseeing global net-zero submissions, the challenge lies in developing standardized guidelines for each supply chain including media. Collaborations with industry bodies are ongoing, but the volume of total global supply chains that need to be evaluated complicates the process.
Industry Measurement & Reporting Initiatives
A major shift is occurring with the rising demand for alignment around industry emissions measurement & reporting, particularly from brands that are trying to reach their own net zero targets. Brands are increasingly pushing for transparency, with many requiring partner agencies to measure and report emissions across their media campaigns.
This has led to the development of various calculators by agency holding companies which in turn has created two core issues. The first being a lack of a universal measurement standard, and the second the overreliance on estimated data which sustainability teams at brands are trying to move away from – estimates don’t give a clear picture of the path towards net zero for a given supply chain.
The Global Alliance for Responsible Media (GARM) is currently taking the lead on tackling the first issue and will be deploying a universal measurement framework in the coming months. A singular, detailed, and accurate standard is crucial to ensuring that data sets are measured consistently, allowing the industry to make meaningful comparisons and to inevitably begin the reduction process. The uniformity is key to benchmarking against industry peers and expediting the industry’s journey towards “ad net zero”.
The second challenge is the overreliance on estimated data, which is a major limitation to understanding true emissions by suppliers. This inevitably prompts the need for media suppliers to accurately measure their own media delivery and share emissions data with brands and agencies to incorporate into their own calculators.
The Road Ahead
The emerging reality is that suppliers, even those skeptical of the industry push towards net zero and the importance of emissions measurement, need to prepare for increased scrutiny. The narrative around emissions reporting is gaining momentum, with brands such as Amazon and Microsoft publicly mandating their suppliers to report product level emissions across all supply chains.
As the industry gears up for increased transparency, the need for accurate media delivery measurement within the broader Scope 3 emissions becomes not only a corporate responsibility but also a strategic imperative to stay relevant among sustainably-driven brands. Accurate measurement of media delivery throughout a business positions it for success in establishing net-zero targets and enhances its procurement efforts, ultimately creating opportunities to increase revenue for both brands and agencies.
