Sustainable Advertising: How Far Have Industry Efforts Taken Us?

Planet Earth is heating up, and the advertising industry is fanning the flames. As players in the advertising ecosystem attempt to pave the way for a more sustainable future, how far have industry efforts taken us?  

The Advertising Ecosystem vs the Earth’s Ecosystem 

As the industry knows well by now, advertising is causing more than a slight environmental impact. Advertising is responsible for up to a colossal 20% of the internet’s total infrastructure consumption. From DOOH to programmatic display, the ads animating the industry’s campaigns are also causing widespread harm to the environment. Even before ads are served, the programmatic supply chain is responsible for a large amount of carbon emissions. Thousands of actions must take place to lead to a single ad impression, and this is before even bringing in a third party. 

Consumer Desire for a Sustainable World 

Consumer attitudes towards the environment have been rapidly changing over the past decade, bringing the desire to be sustainable to an all time high. With good reason, people are becoming increasingly conscious of their role in protecting the planet. Almost eight-in-ten US consumers say that a sustainable lifestyle is important to them. The importance of sustainability for consumers has also been on the rise in the APAC region. Indonesia is the highest ranking country worldwide to say sustainability is more important than two years ago (86%), followed by Thailand (74%), and Singapore (72%).

Consequently, people have become much more vigilant of how brands and corporations conduct themselves. Many people expect brands to display some level of corporate social responsibility: only 7% of consumers say environmental issues are not a factor in their purchasing habits. Unsurprisingly, correlation has been found between ESG-related (environmental, social, and governance) claims and consumer spending, with one-in-four consumers also willing to pay more for brands that commit to environmentally sustainable and ethical practices.  

An Evolving Legal Landscape 

It’s not just consumer attitudes changing – legislation is evolving too. With the aim of protecting consumers from misleading practices and helping them make better purchasing choices, the EU has banned greenwashing and making generic environmental claims which lack proof. EU members have until 2026 to comply with the newly introduced legislation. The regulations will also prohibit the use of sustainability labels not based on approved certification schemes or established by public authorities, among other measures. 

In APAC, the Australian government also outlines the need for companies’ green claims to be able to be substantiated. Meanwhile, Singapore is set to strengthen regulations: from 2025, the government will begin implementing mandatory climate related reporting for all companies.

In the advertising landscape, many companies have come under fire for making misleading green claims. The UK’s Advertising Standards Authority (ASA) watchdog has banned numerous ads: AirFrance was among the airlines to have their ads banned by the UK ad regulator a few months ago; two ads for Toyota SUVs were also pulled for condoning driving that disregards its environmental impact, among others.   

Numerous companies have also faced lawsuits over greenwashing: a complaint was filed against Nike in federal court for falsely marketing its products as environmentally friendly, while H&M was hit with a class-action lawsuit for misleading consumers about a ‘sustainable’ clothing line. Delving into the figures, there has been a significant increase in cases challenging corporate narratives on contributions to the low-carbon transition. An analysis finds that cases rose from 9 in 2020, to 26 in 2022 – a dramatic increase from 2015, which saw no cases. While still developing, the increase in legal action against greenwashing is noteworthy. 

Advertiser Efforts 

In response to evolving attitudes and regulations, the industry is adapting. Recent ExchangeWire and OpenX research found that three quarters of European marketers deem sustainability metrics to be a top priority for their businesses, up from 43% last year. Meanwhile, our research into the APAC region found industry respondents plan to allocate 47% of their budget over the next year to carbon-neutral partners.

Richard Ottoy, GM EMEA at Sharethrough – a supply-side platform creating a sustainable advertising ecosystem – describes how the industry has started to take sustainability more seriously. He notes, “We've seen a measurable increase in some key indicators including the inclusion of sustainability questions in most agency RFI's which they use to evaluate preferred partnerships.” Ottoy also describes how brands and agencies are requesting more education in the form of both sustainability workshops and conferences. 

Setting Industry Specific Guidelines 

Looking at industry-specific sustainability guidelines, prominent industry organisations are taking the reins. Last year, GARM released an action guide detailing sustainable media standards. In partnership with Ad Net Zero, GARM is now set to publish a common usable framework for media sustainability. Set to be released by June 2024, The Global Media Sustainability Framework will provide advertisers with a standard way to measure carbon emissions produced by media planning and buying. 

Anthony Falco, global director at Ad Net Zero, elaborates: “Advertisers wish to see a standard and accurate way of measuring media emissions, so that they can comply with increasing regulations and future reporting requirements. Media owners and tech platforms are being asked to provide detailed and differing sustainable data, and so want to see a consistent specification of what they should provide.”  

Although regulations are not a direct solution to the climate catastrophe, a common usable framework will lay the foundations for the industry’s transition into a more sustainable future. It will facilitate a more synchronised industry effort to tackle the climate crisis, allowing industry players to work towards the shared goal in unison. 

Townsend Feehan, CEO of IAB Europe, also highlights how “adopting innovative solutions and standards requires a collaborative effort.” She explains, “ensuring the industry is informed of, and helped to comply with new and existing EU regulations, such as the ‘Green Claims’ proposal and Corporate Sustainability Reporting Directive, is crucial in ensuring our industry's alignment with sustainable practices.” 

Harnessing AI for a More Sustainable Future  

In terms of practical solutions, the innovation of many ad tech companies is also paving the way to greener advertising. Harnessing the power of emerging technologies will be key to a more sustainable future. There is already an abundance of solutions on the market designed to help brands and advertisers’ green efforts. What most of them have in common is leveraging AI or machine learning. As AI continues advancing at a rapid pace, we can expect the increasing number of green solutions to become progressively more effective. AI’s efficiency and scalability hold a promise of positive change for sustainability in ad tech. 

Authenticity and Transparency

The landscape is becoming increasingly complex for advertisers to navigate: new legislation is on the horizon and we can expect further regulations in the coming years. Once we have a common usable framework, tracking carbon emissions should be much more efficient. Adapting to this will be essential. Brands and advertisers that fail to readjust to a more sustainable business model risk everything in a society which increasingly prioritises a sustainable future. 

Like in advertising itself, authenticity and transparency will reign supreme in industry efforts towards creating a more sustainable future. Communicating sustainability-related progress transparently to consumers will be crucial for brands – but not as vital as the demonstration of genuine efforts to be sustainable. None of us want to see greenwashing. Most importantly, brands and advertisers’ sustainability efforts should be more than part of a trend: lasting industry change will only be achieved through a long-term commitment to greener practices.