As the world faces a reckoning with climate change and a global energy crisis, leaders across industries are evaluating new ways to decrease their carbon footprint and environmental impact. Meanwhile, recent social justice movements have shed light on equity and inclusion, and where companies fall short. To ensure that progress is made on all these counts, Environmental, Social and Governance (ESG) guidelines are increasingly being used to assess progress toward a more equitable and sustainable future.
In this Q&A, ExchangeWire’s head of content, John Still, sits down with Julie Selman, SVP head of EMEA, Magnite to discuss the newfound urgency toward adopting ESG standards in ad tech.
Is ESG seen as a priority by the industry as a whole?
Significant shifts in society over the last two years have pushed more companies to look at how they are contributing to a more diverse, equitable, and sustainable future. Movements like #Metoo, BlackLivesMatter, and events such as The United Nation’s COP26 conference, as well as the visible effects of climate change, such as the disastrous floods in Pakistan, have shed light on the need for Environmental, Social and Governance (ESG) guidelines.
Meanwhile, consumers are looking more closely at products and companies to see if their values align. Climate change, for example, is now part of the general consciousness, with sixty-four percent of people believing climate change is a global emergency.
Consequently, brands are putting greater focus (rightfully so) on ESG and specifically on their impact on the environment for two reasons: a. It’s the right thing to do, and b. Consumers are paying attention. In today’s market, brands that ignore ESG risk consumer blowback. Seeing that we work in advertising, public sentiment has a direct effect on how we approach our roles and our industry. We, like the brands we work with, have to evolve. And quickly!
What more can and should be done?
Awareness and knowledge are key to getting our industry to move forward in a more equitable and sustainable fashion. Most companies are aware of the issues at large but don’t quite understand the degree to which ad tech specifically impacts the environment.
For example, Daniel Knapp, the chief economist at IAB Europe, recently said the digital advertising industry is accountable for 2% of carbon emissions. That’s a really shocking number if you think about it!
On the topic of diversity, there was a campaign in March in the Netherlands, where I am originally from, which really stunned me. Equileap and Women Inc. found that there are more CEOs named “Peter” in the Netherlands, a supposedly liberal equitable country, than there are female CEOs. These types of data points are really key to building awareness about the issues we need to address when it comes to ESG. Currently, there isn’t yet a critical mass of awareness. Knowledge gathering is still ongoing, and there are still major gaps.
The next step, of course, is to ask, “What do we actually do about it?” Company policies and behaviours will have to change. The phase after that will be normalisation, where these issues have been addressed in at least a basic way or ideally, have been solved for.
Is there enough information available regarding ad tech's societal and environmental impact?
As far as I know, there is not a ton of information available regarding ad tech’s wider impact on society and the planet. However, more research is being developed on that front. Magnite recently joined Ad Net Zero which is an incredibly relevant and useful initiative for the advertising and media industry and I’m personally part of a new IAB UK Sustainability Group. We’re currently putting together a basic glossary, so people can learn about general sustainability terms, and find more ESG data and resources specifically related to the digital advertising industry.
Overall, building ESG literacy will take time and will rely on input from people across the industry. The IAB UK Sustainability Group will hopefully be one of many programmes that will help spread industry knowledge, which can then lead to action.
What are your hopes for the ad tech industry in terms of ESG?
I’m hoping we can come together and accelerate from the awareness and knowledge phase to the action and the normalisation phase as quickly as possible. There are many initiatives and new organisations popping up to address ESG, but we’re still in the initial stages. The great thing about working in technology and being close to and part of innovation is that we can make a real difference.
What are the trends defining your area of the industry?
SPO has been a key topic in the past years: the idea of having a transparent and cost-efficient route to supply. If you look at SPO through a sustainability lens, the added criteria is to assess the most efficient routes from an energy point of view as well. How can you reduce the amount of hops in the supply chain, reduce the amount of unnecessary data collected and stored, and make sure you are targeting the best and most efficient supply path possible?
In the face of the eventual deprecation of third-party cookies, the goalposts of SPO are also changing. The original aim of SPO was to promote more efficiency and transparency. Now, there’s also the goal of streamlining down to the paths that can continue to provide audience addressability and measurability in the future while keeping consumer privacy safe.
What are the main challenges and opportunities from an ESG perspective?
The number one challenge I see is that for companies, learning about the depth and scope of ESG issues can be overwhelming. This can cause leaders to do nothing rather than to do something because they panic and don't know where to start.
This is why knowledge is so key. We can all do something and take steps in the right direction without it having to be the perfect path forward. There are now tools like carbon calculators which are imperfect but at least give people a better understanding of their travel or emission impact.
Another challenge is misinformation. There’s the hyperbolic idea out there, that if we apply ESG guidelines, we will all go out of business because nobody will be able to make a profit anymore. However, a successful and future-looking company will focus on the three Ps in unison: People, Planet, AND Profits.
What is Magnite doing in the ESG space?
We constantly strive to embrace the opportunity to deliver long-term value for all our stakeholders. Generally speaking, we have identified three of the United Nations’ Sustainable Development Goals (“UN SDGs”) that we directly contribute to through our ESG strategy. The first is talent engagement, which aims to create an inclusive, equitable and sustainable work environment that drives employee engagement.
Second, we’re focused on energy and environmental efficiency, to identify and continuously reduce Magnite’s environmental footprint through operational innovation and strong energy management. We are currently engaging with internal and external experts to develop a framework to transparently improve our energy efficiency. Third, we follow responsible advertising and data governance, to maintain robust compliance and oversight processes to ensure transparency and responsible advertising on our platforms, while protecting core privacy principles in our collection and use of data.