This post is by Chris Sewell, Business Director at TrinityP3. Chris has a wide ranging knowledge of all areas of the advertising and procurement world and specialises in helping companies understand the environmental impact of their marketing spend.
Crisis what crisis?
As the world leaders and their negotiators assemble in Paris to finalise an agreement to work together to keep carbon emissions below 2oC, the question should be asked ‘what does this mean for marketers’?
Whether you believe the scientists that anthropologic climate change is a major problem or you hold an opposing ideological view, there is a global consensus afoot that will influence the way we live our lives and the manner that business is conducted in the future.
President Obama, the most powerful man on Earth, believes in climate change and is doing what he can in his own backyard to act. Importantly he is also putting pressure on other nations to lift their game in regard to taking action.
Closer to home in Sydney, while the politics are holding back decisive action the mood has definitively changed with the dumping of the arch climate skeptic Tony Abbott.
A worthwhile balanced read if you need convincing on the need for action can be found in the CSIRO National Outlook 2015. The report explains how Australia does have the capacity to pursue economic growth, sustainable resource use and reduced environmental pressures simultaneously and can benefit from the positive outlook for our living standards and natural assets, while contributing to a secure and prosperous world.
It also shows the challenges that lay ahead for us all.
So what role do marketers play?
If you look at the current level of interest and responsibility the answer is not much at all.
But this is about to change.
Sustainability policies and reporting are now embedded within major corporates especially any that feature on the Dow Jones 500 sustainability index. Guidelines and monitoring are being introduced in all aspects of the business activities within the direct boundaries that come under their direct control.
Reducing energy usage not only decreases a company’s carbon footprint, it is a no brainer to plan and implement as it also cuts costs. So the CFO is also a great advocate.
Green power from renewable energy and LED lighting have been deployed for years now so the question remains what can marketing do to help beyond just telling the customers what a great job the company is doing?
Let me pose this a different way. If you produce a luxury brand like perfume and up to 40% of your costs are used for marketing the product, then no amount of energy efficient light bulbs in the factory are going to effect the environmental behaviour of the partners who you spend this money on.
While it is outside of the company’s boundary of direct influence it is definitely within the businesses responsibility to ensure that these marketing partners are being as environmentally prudent as possible when they help sell your goods and services.
The size of the environmental impact of advertising
When looking to understand the environmental impact of your marketing we need a common reference point so that comparisons can be made across vastly differing industries and activities. CO2_e is the measure used being carbon and the equivalent carbon factor from other greenhouse gas emissions.
I’ll use carbon or carbon emissions in this article as they are the general day-to-day terms used.
According to eMarketer there was approximately USD$600 billion spent on advertising in 2015 by the top 6 spending countries. Converting this to a carbon equivalent using the CO2counter methodology this would be 300,000,000 tonnes of carbon or the same as the carbon emitted when running 230,000,000 fuel-efficient cars for that same year.
That looks like a lot of carbon to me so let’s see what we can do to first explain how this occurs and what you can do about reducing it.
The carbon impact by marketing channel
There are two places where carbon emissions take place in marketing products and services.
Firstly there is the carbon from the production of the communication. Then there is the carbon from the media placement or consumption of the communication.
As the production component varies depending on the advertisement and is generally a much smaller percentage of a marketer’s budget and is not included in the advertising figure we used above, we will concentrate on carbon emissions from the various media channels.
Everyone’s favorite environmental demon is paper i.e. commercial printing, newspapers and magazines. Print less and digitise more has been the mantra for many a year.
One reason this is a popular target is that it is easy to implement change especially with commercial printing and it looks like a quick and easy to understand win. While wasting paper is bad for the environment the story is not that simple. Blindly switching from paper and not counting the carbon in the digital channel is risky if you want a long-term sustainable approach to reducing your footprint.
Data centres and servers just overtook papermaking in terms of electricity used in the US. This is partly due to the decline in commercial printing requirements but is mostly due to the explosion of content being shared around the globe.
While the individual emissions from each online view, send, share, display or pop up is small, the massive volume of these activities has a large impact. To give you some context around this let’s look at tweets.
Twitter is now an advertising medium so when communicating via this channel the carbon should be the marketer’s responsibility. Each tweet that is composed and sent generates .05 grams of carbon. Not a lot you may argue. That is 250 tonnes of carbon a day and growing.
The graph above shows the amount of CO2_e (carbon) from each dollar spent on advertising placement or space. Outdoor is another interesting example of carbon impact. If the site you are using is not run by solar power there’s a heavy carbon cost to be paid once the sun goes down and the floodlights go on.
A more comprehensive explanation of the impacts of the various channels can be found in the following presentation from the TrinityP3 Webinar Series:
The challenges for Marketers in a carbon constrained future
There are also some very practical case studies.
The business benefits of understanding the environmental impact on the business
While the CFO can easily understand the ROI from reducing electricity consumption within the business boundary it is harder for her/him to find a financial benefit from other environmental initiatives. Here are a few that the CEO would also be interested in:
Brand Image and Reputation
This is the least tangible benefit. It is also the main reason why businesses have a sustainability programme. While a brand’s value does loom large on a multinational’s balance sheets, it is not until the company’s behavior is less than perfect that this is brought to light.
Keeping the staff happy
Like attracts like and this is never truer for companies that have a working sustainability policy in place. With recruitment costs continuing to rise, having a reason for staff to join and stay is vital.
This is especially important when dealing with the younger more environmentally savvy workforce, and it requires a clear and well-communicated sustainability mandate to help reduce this business expense.
Standing out from the crowd
Linking a genuine sustainability programme helps win and retain clients and customers. Having a carbon measurement, reduction and offsetting programme in place puts ‘meat on the bone’ when answering the CSR sections of formal contracts and informed customers.
It also gives the sales and marketing teams another reason for their customers to buy when speaking to like-minded companies.
Philanthropy and future proofing
An area that is difficult to quantify. Then again by it’s very nature it does not need justification. Believing that helping the environment is the right thing to do and having an expense item for voluntary offsets does set a high sustainability pass mark.
Marketing needs to grab the reigns in the environmental area to ensure long-term business survival. Corporates that wish to be competitive in 10-15 years time have to have a robust sustainability plan. That includes bringing their long-term business partners along with them.
Start by contacting TrinityP3 today and conduct an environmental opportunity mapping exercise to see what steps you need to start putting into place. Your business has it’s own unique requirements in this area. Independent guidance is definitely required.
TrinityP3’s Sustainable Marketing Assessment provides a detailed evaluation of how your marketing strategy aligns with the required sustainability policy of your organisation. Details here