Lee Stephens and Per Tinberg.
The climate-related financial disclosures bill that passed federal parliament in September requires companies to report on their climate-related risks, opportunities, and strategies, as well as greenhouse gas emissions.
Surprisingly, advertising and media rank among the largest global emitters of greenhouse gases. Digital media globally is responsible for 1.6 billion tonnes of CO2 emissions, primarily from the Internet and its supporting infrastructure, accounting for 4% of global greenhouse gas emissions. To put this in perspective, the global aviation industry contributes 5% of global emissions.
The rapid growth of AI is significantly demanding more power. For instance, ChatGPT now has 300 million weekly users, with each query requiring ten times the energy of a Google search. Advertising and media play a significant role in many company's emissions footprint. Although marketers, already facing numerous challenges, might find this new task daunting, planning ahead offers workable solutions.
While the changes currently relate to businesses with $500m turnover or over 500 employees now, in the years ahead smaller businesses will be required to comply. Australia is taking a tougher approach than most global markets. Jurisdictions such as the EU and Japan have focused on listed companies. Australian compliance reporting is triggered for all companies that meet two of the three following criteria.
In December, TrinityP3 maestro Darren Wooley explained to a group of climate active industry executives that an agency’s sustainability credentials were not high on the list of priorities during a pitch process. Marketers are often passionate about personal sustainability, however this is not translating to pitch outcomes. He added that marketers often do not have the time or knowledge to take on emissions reporting, or believe it is someone else’s problem.
This is about to change. Inevitable company-wide emissions targets will capture activity within the marketing departments. Closer scrutiny will be placed on marketing teams to provide granular emissions data on advertising activity, and the initiatives they are taking to reduce their emissions footprint. Erroneous or inaccurate public reporting will leave brands exposed to greenwashing claims as the government signals extensive enforcement of the Act.
Media agencies have a key role to play in helping advertisers measure and reduce emissions created from media campaigns. Developing a campaign emissions reporting strategy for clients alongside excellent media buying will be a key competitive advantage and deliver a much needed solution for marketers. Marketers are able to understand the pros and cons of chasing cheap reach regardless of environment or viewability. Available technology can already evaluate the real environmental cost of running uncapped media frequency across all digital and traditional media at a campaign level. Agencies are in a unique position to deliver the data that is required to comply with the Act and drive better overall budget outcomes responsibly.
Future focused media agencies, are leading the way in delivering detailed reporting in collaboration with emissions platforms such as Scope 3. Advertisers of all sizes are able to cost effectively measure emissions across their media spend before being mandated by the Act. This result will be more cost-efficient campaigns, reduced wastage, and higher impact campaigns by moving away from traditional "spray and pray" tactics.
Lee Stephens – Executive Chair - Meerkat Media
Per Tinberg – Managing Director – Meerkat Media