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    Too many business climate plans treat symptoms not cause, says Dentsu sustainability boss

    In the run-up to Cop27, The Drum sat down with Anna Lungley, chief sustainability officer at Dentsu, to hear about the biggest challenges facing the advertising and marketing industry when it comes to climate change.

     

    For a long time, Anna Lungley didn’t know a career in sustainability was an option, despite being passionate about the planet and human rights since she was a child. ”I started campaigning for Friends of the Earth when I was 14,” she tells us.

    Now Dentsu’s chief sustainability officer, following two years as its global head of social impact, it was in 2004 when she joined BT that she first realized that ”science-based targets were crucial to sustainable business transformation”. Just like any other business, she says, ”you need strategy, culture change and communication”.

    It is her firm belief, therefore, that in order for businesses to meaningfully integrate sustainability they must have a chief sustainability officer who is at the heart of the executive team. “We need to be able to influence technology strategy as much as commercial or HR strategy… Sustainability is really a three-legged stool, with the environment, social issues and the economy all needing to be in balance. Otherwise, the global economy tips.”

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    She says that this is why climate action must be at the forefront of all businesses’ minds. “It’s going to impact ethnic minorities and women and girls much more than the wider population, so it’s a threat multiplier and the two agendas are completely interconnected.

    “When you look at long-term business transformation, we know that 90% of global economies have net-zero targets. We know that governments and businesses need to decarbonize in the next 10 to 20 years, but they need to be looking at how they operate and add value in a resource-constrained world.”

    Lungley says that this kind of future thinking is at the heart of Dentsu’s business model. “The Japanese have a philosophy about medicine where they treat the cause and not the symptom, whereas western medicine treats the symptom.”

    Referencing the likelihood of taxes being applied to carbon emissions in the future, she says: “When governments introduce a cost on carbon, the cost implications for businesses will be profound. If your product is sugar or cocoa or coffee, your carbon tax could be hundreds of millions every year and that’s going to hit your bottom line directly. Any sustainable business needs to be looking to the long term to understand what this means in terms of its business model. 

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    “Energy is back on the agenda now, which Dentsu identified some years ago as a risk in terms of pricing volatility and availability. Our long-term renewables strategy has helped us be more resilient amid the current energy crisis in Europe.”

    Recognizing responsibility

    Overall, Lungley says that businesses underestimate their own responsibility when it comes to pushing for sustainable development. “We have huge economic power. I’ve just come back from the World Business Council for Sustainable Development, which took place in Tokyo this year. It has about 200 organizations, including some of the world’s biggest brands… and the combined emissions of the people in that room are about 20% of all global emissions. If everybody in that room implements Paris-aligned targets and decarbonization strategies, then arguably we’re halfway to the emissions reduction needed to achieve net zero. 

    “And, of course, businesses have a role to play in not just their own operations but their supply chains. Businesses create markets, advertising creates markets, and where you create markets capital investments follow. We are a critical part of that ecosystem and we need to recognize our own responsibility.”

    It’s this kind of overhaul of business purpose and values that lies at the heart of the long-term action needed to mitigate and enable people to live with the worst effects of climate change, says Lungley. She points to the focus currently falling on holding companies, in particular over their work with fossil fuel clients, as one example of where attitudes need to shift.

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    “At the moment there’s understandably huge scrutiny on the relationships we have with carbon-intensive industries.“ (Over 230 agencies, including all eight of the major holding companies, were recently called-out in a report by activist network Clean Creatives for maintaining their relationships with some of the world’s biggest polluters.)

    “I think this is a really important conversation to have, but I worry that it does ignore the fantastic opportunity we have to drive positive behavior change. The next generation undoubtedly wants to work for purpose-led organizations and if we scare them away from advertising then we’re not going to solve the problems we have or excite and energize them. We need creativity, we need new solutions and innovative thinking, and this is arguably one of the most creative industries out there.”

     

    Futureproofing business models

    Lungley also cites the measurement tool of ‘advertised emissions’ as an example of activists limiting progress through their examination of the industry’s role in facilitating climate change.

    The latest research from advertising activist group Purpose Disruptors estimates that advertising-driven sales currently add an extra 32% to the annual carbon footprint of every person in the UK, but at Dentsu, says Lungley, there is a preference to talk about “avoided emissions“ instead. “Advertised emissions is very much focused on the negative impact we have, whereas ‘avoided emissions’ look at where we, as an organization, have avoided generating emissions point blank.

    “If our work with an automotive company has, for example, accelerated the shift from diesel and petrol to electric and hydrogen, we have eliminated those emissions from being generated. I think that’s a much more inspiring narrative that will drive innovation and sectoral investment and will stimulate and reward the early movers.”

    Lungley instead advocates for the industry to adopt global standards for transparency and communications, rather than internally set ones. “We should absolutely be aligning ourselves with global standards, including adopting science-based targets and greenhouse gas protocol. We should be completely transparent about our carbon accounting and we should be reporting and disclosing via platforms like CDP.”

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    She says that if businesses were to adopt these measures, transparency around clients and material emissions sources would come naturally. “We absolutely need to be transparent about who we work with and the emissions they create. From a practical perspective, we might be working with corporations that do not have future-proof business models and the really strategic companies will be wanting to adjust that.

    “At the moment, the focus is going on the major clients rather than on the innovative startups that we should be investing in. If I were taking the decisions I would be looking at my client list and saying, ’perhaps we need to axe fossil fuels in order to go after the sustainable businesses that take a long-term view’.”

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