Advertising: A Missing Link in Successful Corporate Climate Action Plans

Advertising is a $700B industry that has been overlooked as a source of significant carbon emissions. To achieve sustainable advertising, we must make it easier for companies to calculate their Scope 3 emissions. Here's how some of the world's largest brands, agencies and ad-tech companies will benefit from new innovations.

Just 2 of 55 largest US companies have scope 3 emissions goals in line with 1.5°C target

Last week, leading shareholder advocacy group As You Sow issued a first-of-its-kind report analyzing the emissions-reduction progress of 55 of largest companies in the US. The report shows that emissions-reduction efforts of some of the world’s largest companies are falling short and that only two of the 55 (< 4 percent) have set a goal to reduce their Scope 3 emissions in line with the global warming target of less than 1.5°C.

One of the biggest contributors to low scores is the lack of Scope 3 emissions from disclosures. Of the 55 assessed companies, only 20 companies reported all relevant Scope 3 emissions, compared to 90 percent reporting Scope 1 and 2 operational emissions.

Overall, the trend of incomplete or non-existent Scope 3 reporting has persisted for more than a decade, despite growing calls for increased visibility and transparency. Indeed, only two companies — Apple and Microsoft — have set a goal to reduce their Scope 3 emissions in line with 1.5 degrees.

Climate risks hidden in corporate value chains

One reason behind this trend is that Scope 3 emissions are difficult to measure, report and offset because they include many emission-intensive sources across the corporate value chain. Yet these emissions can represent up to 95 percent of a company's overall footprint.

Without Scope 3 measurement standards and consistent, reliable and comparable disclosures from companies, it's nearly impossible to determine if they are living up to climate commitments. And for organizations seeking to make carbon-aware business decisions, a lack of reliable and trustworthy standards makes it difficult to take Scope 3 emissions into consideration when comparing vendors.

Advertising: An addressable carbon hotspot

Advertising is a $700B industry that has to date been overlooked as a source of significant supply chain emissions.

Yet digital advertising has a substantial carbon footprint — largely from the electricity used by the millions of servers that provide search results, news feeds, multiplayer games, real-time bidding, machine learning and the myriad other functions of the internet it employs.

Amongst the 55 companies assessed in As You Sow's report, 21 were included in Ad Age World's Largest Advertisers (December 2021) list.

Across the digital advertising sector, companies in every category stand to benefit from measuring and reporting Scope