When it comes to achieving net zero, brands are in a unique position to influence consumer behaviour and shape the narrative, and dentsu’s Dominic Powers says a key performance indicator of the marketing function should be how successful it is in changing habits and lifestyles.
The IPCC recently published the last of six assessment reports. These reports have been critical in developing momentum for all actors to set and progress on net zero transition, recognising that above 1.5° C is catastrophic for humanity. They are published every five to six years, so the next report won’t be published until 2030, at which point, it may be too late to reverse the damage. This is the final warning.
A recent study by dentsu and Kantar found that a major component of the solution is to change the way people consume, live, travel and work, and the onus falls disproportionately on businesses and brands.
This idea resonated at the World Economic Forum summit in January, following months of global climate protests by millions of young people. Many companies pledged to lower their emissions to net zero by 2050 or earlier and major financial institutions representing trillions of dollars in assets committed to minimise carbon-heavy investments.
The issue is not many of the aforementioned went into ‘how’ they would make good on these pledges.
Brands are in a unique position to influence consumer behaviour and lifestyles and can shape the narrative that will shift people – and policymakers – towards adopting new social and cultural norms, technology and infrastructure that can bring about significant reductions in carbon emissions. Collectively, actions that fall under these domains are referred to by the IPCC as ‘demand-side mitigation strategies’.
To achieve this, companies must radically reimagine the role of marketing and centralise the function in their sustainability transformations. In doing so, they will be in the best position to drive the behaviour and lifestyle changes we need to see to achieve between 40% and 70% reductions in greenhouse gas emissions by 2050 per the IPCC.
Who can deny the impact of Disney in spreading a culture of ‘complete entertainment’ around the world, moulded in the sunny image of the American way of life? Or the results of Microsoft’s driving vision, ‘a computer in every home’, or the far-reaching effects of the giants that have irrevocably changed how we interact with the world in the last 15 years, Amazon, Netflix, Apple and Uber?
Now imagine if sustainability or, more specifically, sustainable consumption, were the organising principle around which these brands designed their business models, products and marketing? The potential to generate real, positive change in terms of what and how people consume is immense.
While the dentsu and Kantar joint study was limited to the marketing function in its scope, the picture it has uncovered belies a deep-set inertia and lack of sincerity on the part of businesses in general. A lack of sincerity about correcting companies’ decades-long pursuit of growth at all costs and the widespread overconsumption that has been the result, and a lack of sincerity in generating solutions to allow people to consume what they need without generating negative trade-offs for the planet.
At its foundations is a solid unwillingness to disrupt a profitable modus operandi in spite of hard evidence that the true costs to communities and the planet have been accumulating beyond tenable justification.
This organisational intention-action gap (sometimes referred to as a ‘value-action’ gap) is threatening the well-being of current and future generations.
Not convinced? Bear with me as I cite some stats from the study.
Despite four out of five companies in APAC having sustainability frameworks in place and 92% of marketers believing the topic is “important” or “very important”, marketers in the region struggle to justify investment in sustainability efforts:
- 38% say they are challenged to show the impact it has on the business
- 31% say that they do not have the budget to act on sustainable goals
- 32% say they are not clear on the right metrics to assess progress they have made
In terms of working towards sustainability goals, marketing departments lag behind all other internal divisions, with only 34% claiming to be executing on plans and measuring progress, compared to 46% in supply chain and 51% in corporate strategy.
Businesses must start to push the limits of their imagination, innovating purposefully beyond merely ‘net zero’ if we want to stand a chance of meeting our 2030 goals even with a 20-year delay. Getting ruthless about being circular and regenerative is now an undeniable necessity. And businesses have to do this – not in response to consumer pressure but of their own accord.
This is true even for consumer goods companies. Consumers make most of their decisions within limited contexts, often only partially aware of the environmental or social implications of their purchases. Many, especially in the developing world, are reaching for prosperity, gunning for the same markers of success – luxury car marques, high fashion, the latest iPhone – as their parents did two generations prior.
Businesses have the gargantuan task of either building sustainable versions of all consumables, especially these markers of success, or changing people’s fundamental relationship with stuff in the first place. To mainstream these ideas, marketers need to exercise extraordinary creativity and, I’d argue, be involved upstream at the point of deciding on innovation directions.
Knowing consumers best, marketers are ideally placed as both internal and external change agents, able to leverage their intimate understanding of the customer to provide a nuanced outside-in view that can drive meaningful, profitable, sustainable innovation.
To be empowered, they must be given a mandate to innovate and the resources, training and time to do this may require companies to reduce emphasis on the traditional quarterly sales KPIs. No pain, no gain. Or rather, no pain, no planet.
Following the IPCC’s stark warning, companies are likely to scramble to consolidate their ESG efforts, doubling or tripling what they measure and account for. They should turn this lens onto marketing. For all that is being measured today, very little is being measured in relation to marketing and its impact on positive consumption behaviour. In fact, the pole star and most critical performance indicator of every marketing department should be how successful they are in influencing positive shifts in habits and lifestyles.
As the industry that will deploy US$740 billion in global adspend in 2023 (estimated) and advertising campaigns that will account for roughly 3.5% of global greenhouse gas emissions, agencies and other marketing services companies cannot stand idly by.
Agencies have benefitted greatly from brands’ ever-rising sales targets and the longevity of our businesses is predicated on more people consuming more. We have to strongly steer culture away from consuming ‘more’ to consuming ‘better’. Just like the marketers and brands we serve, we need to apply all our tools and know-how towards influencing positive behaviours.
Coalescing at the category and wider ecosystem levels is now non-negotiable. For far too long, many of us have made two steps in the right direction and 10 steps backwards nurturing our golden goose – brands’ demand for growth above all else – guided by a competitive mindset. A second radical mindset shift needed is towards collaboration. It will enable us to set standards, produce widely implementable solutions, move at speed and change the future.
When it comes to the planet, it has to be collaboration over competition, for all our sakes.