Published 1 year ago.
About a 5 minute read.
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Advertising is a $700B industry that has been overlooked as a source of significant carbon emissions. To achieve sustainable advertising, we must make it easier for companies to calculate their Scope 3 emissions. Here's how
some of the world's largest brands, agencies and ad-tech companies will benefit from new innovations.
Last week, leading shareholder advocacy group As You
Sow issued a first-of-its-kind
the emissions-reduction progress of 55 of largest companies in the US. The
report shows that emissions-reduction efforts of some of the world’s largest
companies are falling short and that only two of the 55 (< 4 percent) have set a
goal to reduce their Scope 3 emissions in line the global warming target of less
One of the biggest contributors to low scores is the lack of Scope 3 emissions
from disclosures. Of the 55 assessed companies, only 20 companies reported all
relevant Scope 3 emissions, compared to 90 percent reporting Scope 1 and 2
Overall, the trend of incomplete or non-existent Scope 3 reporting has persisted
for more than a decade, despite growing calls for increased visibility and
transparency. Indeed, only two companies — Apple and Microsoft — have
set a goal to reduce their Scope 3
in line with 1.5 degrees.
One reason behind this trend is that Scope 3
are difficult to
report and offset because they include many emission-intensive
across the corporate value chain. Yet these emissions can represent up to 95
percent of a company's overall footprint.
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Without Scope 3 measurement standards and consistent, reliable and comparable
disclosures from companies, it's nearly impossible to determine if they are
living up to climate
And for organizations seeking to make carbon-aware business decisions, a lack of
reliable and trustworthy standards makes it difficult to take Scope 3 emissions
into consideration when comparing vendors.
Advertising is a $700B industry that has to date been overlooked as a source of
significant supply chain emissions.
Yet digital advertising has a substantial carbon footprint — largely from the
electricity used by the millions of servers that provide search results, news
feeds, multiplayer games, real-time bidding, machine learning and the myriad
other functions of the internet it employs.
Amongst the 55 companies assessed in As You Sow's report, 21 were included in Ad Age World's Largest Advertisers (December 2021) list.
Across the digital advertising sector, companies in every category stand to
benefit from measuring and reporting Scope 3 emissions. It's a problem that can
be solved —and sustainable
can meaningfully contribute to the fight against climate change.
To get there, however, requires new methodologies and standards that make it
easier for companies to calculate their Scope 3
Here's how some of the world's largest brands, agencies and ad-tech companies
will benefit from new innovations.
Agencies that embrace climate-friendly business practices find renewed purpose
and energy. A common, industry-wide standard for measuring and offsetting Scope
3 emissions has the potential to be an industry game-changer. Agencies that
adopt new Scope 3 measurement and offsetting capabilities can embrace the power
of prevention via differentiated products and services, and more actively
participate in the fight to slow climate change.
Today, ad-tech players such as trading desks and ad networks are exploring new
business models and markets in response to the movement to decarbonize.
These models require Scope 3 telemetry across the value chain to improve design,
innovation, collaboration and engagement with suppliers.
Ultimately, visibility into Scope 3 emissions will inform carbon-aware
investment strategies and allow providers to reorient around low-carbon projects
and suppliers, accelerating transition to a low-carbon economy.
As the leading source of revenue for the ad-supported Internet, brands that are
committed to reducing Scope 3 emissions have the power to change how the
industry measures, manages and ultimately reduces its carbon footprint. To do
this, brands must demand visibility, data and strategies to help them factor
emissions into every campaign
Soon, brand marketers will not only require their agencies and ad-tech providers
to provide campaign success metrics, but also insights into what steps were
taken to run effective campaigns while using the least amount of energy. In the
long run, this kind of thinking will reduce the impact of not just digital
advertising, but every digital initiative on the planet.
Because most websites depend on digital advertising as their primary source of
revenue, the energy burden to support their business models is significant. Web
publishers leverage rich graphics, animation and video — which are CPU-intensive
processes that use more energy than content they deliver.
No advertiser stands a chance of reducing Scope 3 emissions without working
closely across their value chain; therefore, publishers must align their energy
consumption efforts to meet the goals of their industry partners. This can be
achieved by validating emissions contributions and identifying new ways to
reduce energy consumption.
The upside for publishers is new monetization opportunities and getting ahead of
brand mandates for sustainable advertising.
As the As You Sow report shows, major corporations are falling short in their
efforts to rapidly cut emissions. And no company can credibly claim they are
progressing towards their Paris Agreement goals if they don't have a strategy to
measure and offset their value chain emissions.
The good news is, sustainable advertising can become a reality with rapid and
meaningful cuts to Scope 3 emissions. The answer is an accurate model of the
supply chain, a deep understanding of the relationship between vendors and
suppliers, and participation from a large portion of the ecosystem.
Published Mar 8, 2022 1pm EST / 10am PST / 6pm GMT / 7pm CET
Holly Peck is a creative technologist, advisor, electronic artist and co-founder of Scope3 — a tech startup that emerged from stealth in Jan 2022 with $20MM seed financing to decarbonize the global economy, starting with the ad-supported internet. Scope3 is building the most comprehensive emissions model of digital supply chains to help businesses be carbon smart.