
Advertising Age published a lengthy report on how
ESG—environmental, social, and governance—has increasingly appeared in pitch
processes. That is, prospective clients are seeking to implement ESG rating
systems to assess White advertising agencies; in turn, White advertising
agencies are responding with heat shield initiatives and outright lies to
present the illusion of corporate responsibility.
All the
performative propaganda for DE&I and sustainability covers up a deliberate conservation
of systemic racism.
In Adland,
ESG is BS.
ESG And Ad
Agency Reviews—How DE&I And Sustainability Are Showing Up In Pitches
Environmental,
social and governance (ESG) has become a standard part of ad agency reviews but
some argue it seems brands are only trying to check a box
By Lindsay
Rittenhouse
Environmental,
social and governance (ESG) has become a standard part of ad agency reviews,
but it’s unclear whether these efforts are yet leading to any meaningful change
as it relates to sustainability and diversity, equity and inclusion, or are more performative.
To be sure,
clients are increasingly asking ad agencies in reviews to be certified with
certain business sustainability firms such as EcoVadis and Sedex, according to
one consultant who spoke on the condition of anonymity, as they are not
authorized to speak publicly about the reviews they oversee.
And when it
comes to diversity, equity and inclusion—which falls under the social aspect of
ESG—more companies are bringing in experts to assess agencies on the makeup of
their teams and what commitments they’ve made to improve DE&I internally,
the consultant said.
But most brands
are still at the early stages of these efforts and are unsure how exactly to
apply them to their businesses.
One agency
executive, who spoke on condition of anonymity, said they personally have been
a part of creative pitches that brought in an external DE&I consultant and
found those consultants weren’t sure what they were supposed to be asking or
what their role was supposed to be in the review.
Some brands are
also only including a few basic questions on sustainability, the consultant
said.
“I don’t know
if it’s clients being progressive or them covering their asses,” the consultant
said. “It’s embarrassing. It’s greenwashing; DE&I washing, if that’s a
term.”
Lauren Tucker,
founder and CEO of inclusion management consultancy Do What Matters, which
advises top ad shops such as TRG and The Martin Agency, said, unfortunately,
“checking boxes is an old trope and continues to take center stage as marketers
try to hold their agencies to a higher standard than they maintain themselves.”
“The evidence
is in the massive number of layoffs of DE&I and ESG teams in
the past year,” Tucker said. “Marketers must stop trying to ‘fix’ DEI and ESG
with checklists and start living the principles that will make their brands
more attractive to consumers and talent who want to see real, authentic change
on these issues.”
The impact of
the tech layoffs specifically on DE&I teams has been widely
reported. Twitter and a popular ride-sharing app were among the tech
companies that made big cuts to their DE&I divisions, Bloomberg reported.
Tucker also
argued that new business reviews are not the time to start evaluating agencies
on ESG, because shops will too easily “bluff their way through [the] pitch and
bedazzle participants in the process.” That work should be done beforehand, she
said.
“If they are
truly committed to what ESG stands for, they should only invite agencies to
reviews with a proven track record of proactively expressing ESG in their work
for their clients,” Tucker said.
Meanwhile,
overshadowing ESG initiatives in reviews right now is flexibility and
efficiency, said Pat Lafferty, chief operating officer, Acceleration Community
of Companies, an ad network. That, of course, is due largely to the shaky economy.
“Being able to
move things around, whether it’s to delay or change dates for a campaign for
various reasons. We have a lot more of that,” he explained.
But Lafferty
said “ESG has and will continue to be important to clients” and it will rise to
the top of the list of priorities again “when economic things dissipate.”
Here’s how ESG is showing up in pitches
Since the 2020 murder of Geroge Floyd and the subsequent
rise in the Black Lives Matter movement, brands and agencies have been called
on to prove how they are working to diversify their staffs, which still remain
predominantly white and male.
That area of ESG remains a priority, even amid the slowing
economy, Lafferty said. “First and foremost, clients are making sure our teams
are representative of the population they are looking to communicate with,” he
said.
Marketers have been slower to adopt environmental
assessments in new business pitches. But companies, mainly in Europe, have
started including such assessments in new business pitches because they realize
customers are demanding more transparency there.
Consumers are increasingly choosing to buy from brands that
are more eco-friendly. And
movements such as Clean
Creatives, which asks agencies to refuse business from fossil fuel
companies and brands not to work with agencies that have contracts with such
companies, are starting to take off.
“Agencies, like
it or not, form part of a global brand’s supply chain,” said Adrienne Little,
co-founder, And Rising, a creative ventures firm. “It’s one way global brands
can refract risk onto others and away from themselves. Meanwhile, movements
like Clean Creatives are severing agency ties with any brand directly involved
in fossil fuels. Each is looking outside themselves for solutions. It’s
shareholder, not stakeholder thinking. A blame game.”
Little said
procurement is asking agencies questions such as: “Do you
carbon offset? Do you vet production suppliers for environmental
standards? Can you confirm your policies regarding recycling?”
Potential
clients in the experiential space will want to, for example, know that the
network’s agencies reuse certain materials in the events they create, ACC’s
Lafferty added, “The reusability of things we will be creating for them is a
common thing.”
Allbirds, which
has begun making its shoes with more eco-friendly and natural materials in its
efforts to be greener, said it assesses its potential agency partners equally
on expertise, creativity, team synergy and their values.
“Sustainability
isn’t a corporate buzzword for us, it’s a core value that’s deeply embedded in
every part of our business—product design, logistics and, of course, marketing,”
Allbirds Chief Brand and Product Officer Kate Ridley said. “Our north
star is reversing climate change through better business. So the first
filter for any potential partnership, including agencies, is an organization’s
approach and commitment to sustainability.”
Ridley said,
specifically, Allbirds asks agencies to share their past ESG-related projects
and experience with purpose-driven clients.
“But equally as
important, we also want to know what they’ve achieved internally,” Ridley said.
“So we’ll ask about their long-term commitments, their achievements to date,
and what’s on the horizon for their organization. For us, ESG commitments are
table stakes. We appreciate that every business is in a different stage of the
journey, and also understand that we’re not perfect, either, but the intent
and, importantly, action has to be there.”
Some brands are
requiring agencies to be certified with certain firms including EcoVadis and
Sedex. EcoVadis and Sedex did not return requests for comment about their role
in reviews.
Greg Taylor,
director of business development for WPP’s VMLY&R, said the agency has had
to show EcoVadis certification in a few global pitches, typically for brands
that are Europe-based.
“That’s where
we really start to see EcoVadis, is in large global pitches,” Taylor said. “So,
at a holding company level, WPP fills out those EcoVadis forms and gets
certified. And then we pass [it] along, showing that we are certified through
EcoVadis as a sustainable company.”
EcoVadis
essentially charges companies an annual subscription service to evaluate and
provide guidance on sustainability. For a company of WPP’s size of 1,000 or
more employees, plans range between $2,199 a year and $9,899 a year, according
to pricing information on the firm’s website.
EcoVadis’ most
affordable “basic” plan includes a carbon scorecard, improvement tools,
sustainability how-to guides and an industry risk profile. On the most
expensive plan, agencies are assigned a point person to guide the company
through steps, including online learning courses.
“From a WPP
perspective, we respond to their questionnaire annually,” a WPP spokesperson
said. “The response process is managed by the sustainability team but with
support from other business functions, for example procurement and legal.”
WPP’s EcoVadis
certification process is handled by a sustainability team, which is focused on
internal versus client work. According to its 2022 sustainability report,
the team focuses on areas including making progress toward the holding company’s
goal of reaching net zero carbon emissions across its supply chain by 2030 and
shifting to 100% renewable electricity. While the sustainability team isn’t
client-facing, the work it’s doing is being evaluated by clients.
As brands are
also increasingly being called out for greenwashing and, ahead of the Federal Trade Commission’s updates to its green
marketing guidelines, they are looking to their agency partners to advise them
on how to talk about their sustainability efforts. So, they need to know their
potential agency partners are properly equipped to handle that task.
Still, only 4%
of ads over the last three years contain sustainability messaging, supported by
an 8% in media spend, and the number of ads containing sustainability messaging
decreased 47% at the beginning of 2023 from 2022, according to recent research
from CreativeX, a creative data platform that works with brands
including Nestlé, Heineken and Unilever.
U.S. brands are
being extra cautious about what they share on their environmental progress
before the FTC’s guidelines come in, said Caitlin Hicks, sustainability manager
of Nuevo, a sustainability-focused creative agency that’s made green marketing
its specialty.
Hicks said for
now, Nuevo advises clients to be very honest about what they’ve accomplished and
what they haven’t, while also being careful about using the word “sustainable”
because there is no clear definition for what is a “sustainable product.”
“What we always
recommend to clients is to be very careful of that word; say instead ‘we’re on
a sustainability journey,’” Hicks said.
Jim Misener,
principal and president of independent brand consultancy 50,000feet, said he’s
seeing clients increasingly in industries, including manufacturing and health
care, prioritizing sustainability in new business pitches. “ESG-related
certifications and reporting methodologies are becoming required and
standardized” in those industries, he said.
“50,000feet has
helped clients shape their ESG narrative at all levels of the organization,
from corporate sustainability reports and landing pages to talent acquisition
campaigns and video series,” Misener said. “Our partners’ prospective team
members, customers and shareholders are asking how each organization is growing
its culture of DE&I, helping to protect the planet and giving back to
communities.”
Whether or not
brands are prioritizing ESG as much as they should be right now, ACC’s Lafferty
argued eventually they all will have to because customers are demanding it.
He said consumers care about how companies do business
and who they do business with and “they will find out what you’re doing. So,
behaving and showing up authentically and truthfully is going to be the thing
that continues to drive brands and their behaviors.”