Too quiet

The ACCC’s greenwash crackdown has had the desired effect: Brands have gone very quiet on environmental claims. But now they face criticisms of ‘green hushing’ – and even those that are making genuine progress on sustainability are running scared.

AANA CEO Josh Faulks said fear of being punished by the regulator as well as increasingly sceptical consumers has left brands heading for the hills. GroupM CEO Aimee Buchanan agreed.

“Businesses are increasingly timid, some are terrified to put their head above the parapet because they're going to be shot down,” Faulks told Nine’s Big Ideas Store. “My view is that this is not a particularly good outcome for sustainability.”

The ACCC put greenwash claims at the top of its agenda a year ago, with brands claiming their products and services are ‘carbon neutral’ a key focus. Earlier this year a ‘sweep’ by the ACCC of 247 businesses making environmental claims found 57 per cent to be potentially suspect, with cosmetics, fashion and food and drink sectors cropping up most often. The regulator is now investigating further.

ASIC is also cracking down. Over the last year it has taken action against dozens of companies, and in February launched court action against super fund Mercer over alleged greenwash claims. At issue are claims that its ‘Sustainable Plus’ products avoid investment in firms in carbon intensive industries, alcohol, and gambling. ASIC alleges that its members’ money may actually have been invested in 49 companies involved in those areas, including the likes of AGL, BHP, Budweiser, Crown, Heineken, Tabcorp and Treasury Wines.

Offset crunch

It may be that Australia’s regulators adopt the approach now mooted by UK regulators in banning companies claiming they are carbon neutral because they buy offsets to neutralise their emissions.

Orizontas partner, Patrick Gibbons, a former diplomat and policy advisor who helped establish key parts of Australia’s current climate policy framework, said scrutiny and political pressure over offsets is likely to ramp up.

“There’s a lot of debate [around offsetting], people are saying it is not a legitimate form of [carbon] reduction. This is something we are going to see play out a lot more, because a lot of businesses in Australia have made commitments around 2030 and net zero commitments for 2050 based on having access to carbon offsets. There is a question around the integrity of them with a government commissioned review [now underway]. This is going to be an ongoing challenge,” he warned.

GroupM CEO Aimee Buchanan agreed offsetting had become “a dirty word”. GroupM is offsetting the carbon emissions from digital ads for some 40 advertisers within its Project Alpha scheme, part of the WPP-owned business' global push to decarbonise its entire supply chain by 2030.

Offsetting alone “doesn’t solve anything,” per Buchanan, but measuring ad emissions means advertisers can start to grasp the scale of the task ahead.

Programmatic pinch

Ad buying groups must include emissions from advertising they book and place for brands within their own downstream or ‘scope 3’ reporting. That presents a major challenge – especially without offsets – given WPP, Publicis and Dentsu have committed to becoming ‘net zero carbon’ by 2030 and IPG by 2040. GroupM, for example, makes up the majority of WPP’s overall emissions footprint. Hence an increasing focus carbon emissions from media.

“Over the last six months, we've measured 900 million impressions, which emitted 636 metric tonnes of carbon – about the equivalent of flying return to LA for 1,000 people,” said Buchanan. “So the size of the problem is enormous – and when you know the size of the problem, you can’t ignore it.”

Meanwhile, the structure of the programmatic supply chain is actually driving up emissions. “Every data signal … even the way that we bid, an unsuccessful bid drives an emission,” per Buchanan. Which is why the likes of consulting firm Scope 3, founded by former AppNexus chief Brian O’Kelley, has urged publishers and agencies to streamline the programmatic supply chain.

O’Kelley reckons the ad industry could half its emissions within 12 months by culling adtech – and by not “buying crap ads that no human sees”.

“We are not going to get consumers to choose smaller TVs. We are not going to get telcos to change how they wire people’s houses. The things we can control are martech and adtech vendors,” O’Kelley told Mi3 in March.

“We can demand shorter supply paths for programmatic. We can stop buying crappy inventory. We can stop buying on ‘made for advertising’ [sites]. If we all stop buying crappy outstream video, I'm pretty sure that would have a massive impact.”

Creative accounting

Advertisers can also make genuine carbon reductions by adapting creative and production processes, said Buchanan, pointing to a recent trial with one brand – albeit over a small scale (1 million impressions).

“We measured all the creative assets, the font size, style size, the actual imagery … we played with it with the creative agency and we basically were able to reduce emissions from those million impressions by 41 per cent through working with the creative agency on the assets,” per Buchanan. “Nothing changed in terms of our buy.”

But she reiterated the task ahead for Australia’s brands, publishers and the media supply chain is massive.

“We're only just getting to the point where we understand the magnitude of the scale of emissions and complexity of what we're dealing with,” said Buchanan.

While publishers are nervous about being punished should agencies start allocating dollars on carbon criteria – some have questioned why media agencies should be the arbiters on carbon – Buchanan said the holdco is not aiming to “beat them up”. She said the broader economy is challenged because Australia’s energy grid – still dominated by coal – is “four or five times” more carbon intensive than those in Europe.

“We need to have our own house in order to understand it and we need to be working with our partners to resolve it. I don't think it's going to come from beating each other up, because at the moment, the grids that we're operating on, we're all struggling with that. How do we navigate around that?”

In the meantime, advertisers are now “incredibly nervous” about making sustainability claims – even those that are making genuine steps to reduce environmental impacts, per Buchanan.

“That’s a real shame. Some of the businesses we work with are doing incredible work. They are not at the end state, but they are working towards it.”