Advertisers Ignoring Clients’ ESG Impacts

New analysis from think tank Planet Tracker shows the extent to which advertising agencies are promoting clients with significant negative environmental impact. The report spotlights the apparent lack of commitment to ESG principles by major advertising holding companies such as Dentsu, Havas, IPG, Omnicon, Publicis and WPP. Planet Tracker uncovered several key findings highlighting the urgent need for industry-wide changes, saying that major advertisers appeared to lack concrete ESG commitments related to their clients beyond vague statements in annual reports. Many agencies rely on industry-wide initiatives, such as Ad Net Zero – which strives to drive the decarbonisation of advertising production, distribution and publication – but those only apply to the internal environmental footprint of the companies. What matters and what investors should be aware of, Planet Tracker argues, is how companies’ external carbon footprint is tracked and supported – including the widespread continued funding of big oil. This Scope 3-type of assessment mirrors the extended supply chain evaluations industrial firms are required to conduct, the think tank stated. “There is a worry that investors might be looking the wrong way, and the hope is that additional screens and a thorough review of underlying dynamics prevent this from happening,” Planet Tracker said in a statement. “Clearer measurement and reporting by agencies regarding their clients’ environmental footprint scores are crucial to enable investors to make more informed decisions.” Investors, who own an average of 43% of the five advertising holding companies listed above, were cautioned against viewing environmental footprints solely as non-financial issues.

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