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“Consumers care about sustainability and they back it up with their wallets”…

So said McKinsey when they released the learnings from a joint study undertaken with Nielsen IQ that examined the explosion of interest from consumers in environmentally and socially responsible brands and products.

McKinsey and NielsenIQ analysed 5 years of sales data covering 44,000 brands and identified 93 different ESG-related claims. The analysis revealed a clear link between ESG-related claims (e.g. animal welfare, environmental sustainability, organic-farming methods, planet-based, social responsibility and sustainable packaging) and consumer spending.

This news was music to our ears here at The GoodNet, and we’ve had a good look at the report.

Here are six things we learned..

1. Consumers are increasingly prioritizing sustainability: The report found that nearly 60% of consumers globally are willing to change their shopping habits to reduce their environmental impact. This means that companies who prioritise sustainable practices are likely to attract and retain more customers in the long run.

2. Consumers are willing to pay more for sustainable products: According to the report, around 45% of consumers are willing to pay more for eco-friendly products. This suggests that companies that invest in sustainable production methods and materials may be able to command a price premium for their products.

3. This applies to brands of all sizes. Smaller brands achieved disproportionate growth in 59% of categories, while larger brands did so in 50%. Established products making ESG-related claims outperformed established products without them in 68% of categories. Private-label products that made ESG-related claims seized more than their expected share of growth in 88% of categories, suggesting consumers may be eager to support affordable ESG-friendly products.

4. Less-common ESG-related claims are associated with higher growth rates than more common claims. This suggests brands can successfully use their sustainability initiatives and positioning as a means of differentiation. Products that highlighted the least common ESG-related features (such as “vegan”) grew 8.5% more than peers that didn’t make such claims.

5. Combining multiple ESG-related claims is associated with higher growth rates. Products with multiple types of claims grew twice as fast as those with only one. However, companies must back these claims with genuine actions that have a meaningful ESG impact to avoid greenwashing. The study suggests that a multiplicity of claims made by a product may correlate with authentic ESG-related behaviour on the part of the brand, and brands should reflect on their commitment to ESG practices holistically.

6. Sustainable practices can boost customer loyalty: Consumers are increasingly loyal to companies that prioritize sustainability. In fact, nearly 70% of consumers said they are more likely to recommend a brand if they believe it is making a positive impact on society and the environment.

Overall, the McKinsey report highlights the growing importance of sustainability for consumers and the potential benefits for companies that prioritise sustainable practices. By taking meaningful action on sustainability and effectively communicating their efforts (while complying with appropriate legislation such the ASA’s Green Claims Code), companies can differentiate themselves from competitors and build lasting customer loyalty.

Read the full report here.

Influencing consumer behaviour is the ad industry’s climate responsibility

I’m writing this on a day when the temperature in London will nudge over 40°c, when the news is full stories of wildfires, droughts and collapsing glaciers, and the Secretary General of the United Nations has warned that humanity faces ‘collective suicide’. In the face of such tangible signs of climate crisis it’s more important than ever that every industry, media included, thinks deeply about the ways in which they contribute to this situation and how they can take action.

There’s no doubt that the advertising industry is taking steps in the right direction. Agencies and publishers are creating new sustainability-focused roles, the Green Claims Code aims to eradicate misleading environmental claims, and GroupM’s new Global Decarbonisation Framework appears to be both far-reaching and diligent. There are many knowledgeable and engaged people within media who are genuinely working to make things better. However, there is also a danger of this being treated as an ‘industry problem’, much like viewability or brand safety; as something to be measured, fixed and managed on a campaign-by-campaign basis.

Now, to be clear, I’m not suggesting that topics such as viewability are unimportant. Clients should of course receive value for money. But sustainability is a problem with sweeping real-world effects. The price of getting it wrong is not merely a drop in campaign performance; it’s more carbon in the atmosphere, more plastic in the oceans, more waste into landfill. And because the stakes are so high it requires us to think broadly and holistically about the effect our industry has.

Much of the work being done at present is focused on carbon calculators of various stripes, which measure the emissions created by advertising campaigns themselves. This is, of course, critical (every campaign run with The GoodNet is carbon neutral; independently measured and compensated in partnership with Scope3). Without such measurement it’s impossible to discern the ways in which emissions from advertising can be reduced and offset. It’s important that such measurement is standardised across media owners and channels, but in general carbon calculation is an important step in dealing with advertising’s Scope 3 emissions (those generated indirectly by the supply chain, rather than directly by the advertiser, agency or publisher themselves).

But there is real risk that if our industry focuses on carbon calculation, to the exclusion of all else, it ends up in a place where sustainability can be ‘ticked off’, whilst the bigger picture is missed. If our industry is serious about making a practical, substantial contribution to the challenges facing this planet we need to think about the ways in which we influence people’s behaviour at mass scale towards more sustainable modes of living. You may well have seen the estimate from Purpose Disruptors that advertising adds 28% to the carbon footprint of every person in the UK. But it’s worth noting that this number is rooted in the effect advertising has on purchase behaviour, rather than energy costs of ad campaigns alone. This shows the huge influence our industry has on people’s behaviour, and the opportunity it has to change that behaviour for the better.

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Some of this is about media choice. Now, I understand that advertisers are reluctant to weigh in on the editorial positioning of media owners. But in truth they already do, at the extremes. The whole idea behind Stop Funding Hate is that a brand’s ad dollars shouldn’t fund digital outlets that spread hatred and misinformation. We believe that there is a higher bar to aspire to here; where brands can look to achieve their campaign outcomes whilst investing into media that genuinely encourages and inspires people to make positive changes in their day to day lives.

The alternative is dispiriting: a scenario in which a platform could be included on ‘green’ plans because they are offsetting campaign emissions to make their media ‘net zero’, and all the while publishing content that exhorts people to carry on as usual.

The truth is that advertising is uniquely placed to influence consumer behaviour: directly through the products that brands inspire us to buy, and indirectly through the content that is funded by those ad dollars. And the good news is that if our industry can influence people’s behaviour, that means we can influence it for the better.

Measuring and manging the carbon emissions of ad campaigns is a critically important, and it’s a topic that deserves all the time, attention and airtime it’s getting. But advertising can make a significant, practical, and positive difference to our planet and its population in ways that go far beyond that. It’s a route for brands to promote more ethical product options, from sustainably produced food or fashion to green investment portfolios. It’s a means of funding publishers whose content inspires and educates people to live more sustainably. It could be amongst the most powerful tools in existence for changing behaviour in the right direction.

The risk is that our carbon calculators let us tick that sustainability box whilst missing the bigger opportunity to play a vital role in helping drive change for the benefit of both people and planet.