By Richard Davis, CEO & co-founder, 51toCarbonZero
Trump’s victory has been seen as a blow to climate action. A President who has repeatedly referred to climate change as a ‘hoax’, doesn’t exactly instill faith that he’ll be championing carbon emission targets any time soon.
Where then does this leave the ad industry’s ambitious aim of reaching net-zero by 2030? Unsurprisingly, concerns have quickly been raised about the legitimacy of achieving this with a cabinet of ‘climate deniers’.
Is it possible to continue to build momentum toward net-zero goals if these have been abandoned from the top?
State level regulation is filling the federal gap
While federal policy might fluctuate, the sustainability movement is thriving at state and local level. Over 26 US states and numerous cities have implemented ambitious climate policies and renewable energy goals. Leaders like California, New York, Massachusetts and Illinois are likely to continue pushing for climate action, regardless of federal priorities.
For example, starting this year in California, companies that are operating in the state will have to disclose their greenhouse gas (GHG) emissions and climate-related financial risk reports. The regulation will initially cover companies generating more than $500m in revenue but over coming years is expected to become applicable to smaller businesses too. The rules place an onus on companies to ask all of their suppliers to share their corporate carbon footprint in order to continue doing business with them.
The introduction of standards and legislation to reduce environmental impact is naturally pushing industries – including advertising – to adopt more sustainable practices, as failure to comply can result in penalties, damaged reputations, and lost business opportunities. By integrating climate risk and carbon reduction sustainability into their operations, advertising agencies and vendors can continue to operate, stay ahead of regulatory changes, avoid potential risks, and position themselves as leaders in a rapidly evolving landscape.
The economic incentives of going green
Net-zero is not just a nice to have; it can benefit media and advertising businesses financially. Firstly, it’s linked to significant cost savings. Clean energy is far cheaper than energy from fossil fuels. And by examining and cutting back on energy use within a company, the cut in consumption will ergo reduce spend. Moreover, it’s been proven that the transition to energy-efficient operations can enhance an organisations’ financial stability and bring down operational costs.
It’s a fact that sustainability sells. By and large, consumers are increasingly into products that are kinder to the planet. And brands know this. According to a recent PwC research, almost half (46%) of consumers say that they are buying more sustainable products to reduce their personal impact on the environment, and most are willing to pay 9.7% above average price for sustainably produced or sourced goods.
Having green credentials can therefore work wonders for a brand’s bottom line. But with consumers all too aware of ‘greenwashing’, brands know that sustainability has to filter through to their supply chain. A survey of 4A’s ((American Association of Advertising Agencies) members, found that 83.4% have been asked about their sustainability credentials by prospective clients, proving that sustainability is a key consideration for brands when selecting media and advertising partners.
Big Tech won’t renege on its net-zero mission
Ad Net Zero has been on the agenda since 2020. What started as a UK initiative, has since launched in the US with a clear commitment to rapid climate action. Under its direction and amid wider societal and industry demands, all big tech and major media agencies, along with many media owners, adtech and martech organisations have made considerable investments in sustainability. Reversing course at this stage would damage their reputation with stakeholders like employees, investors, and activists.
These net-zero goals are more than just PR stunts. They are tied to cost savings, risk management, and innovation. Organisations recognise that sustainability is essential for long-term resilience and competitiveness. Consequently, the pressure on media agencies and vendors to have strong net-zero commitments is significant, and those that can demonstrate their carbon consciousness will benefit from increased business opportunities, as well as the cost-effectiveness associated with sustainable practices.
Advertising isn’t immune to climate change
The effects of climate change have become very apparent for all to see, but one thing that isn’t talked about enough in the industry, is the threat that climate change poses to advertising itself. The reality is that climate-induced events such as flooding or storms could significantly disrupt the delivery of ads if connections are affected.
What’s more, in accordance with climate changes and extreme weather events, audience behaviour will also change, as will companies’ ability to function in affected areas.
No one in the ad industry wants to see this happen and the collective movement towards carbon reduction will continue with or without government support.
The tailwinds of sustainability are not solely dependent on any single policy or political shift. Regardless of who resides in the White House, climate action will not only become the norm but a competitive business advantage. The increase in state regulation combined with the economic incentives, and pressure from customers, will all be key factors in driving a powerful and enduring momentum for a more sustainable advertising ecosystem.