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Marketing’s role in the race to Net Zero

Ben Essen, Chief Strategy Officer at Iris explores the vital role marketing can play in sustainability responsibility, from measurement to customer engagement.

Ben Essen, Iris

Chief Strategy Officer

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The Race to Zero is on. With COP26 taking place in Glasgow later this year, politics, popular pressure and business have finally aligned around the need for urgent climate action. Over 1,000 major organisations from Amazon to Rolls Royce have now signed up to the Science-Based Targets initiative which commits them to reducing their greenhouse gas emissions in line with the targets set out by UN scientists and the IPCC. Investor money is flooding into the businesses leading the race; Tesla for example have experienced an 800% increase in share price in the past 12 months.

The target is Net Zero, when each organisation is creating no gain to the proportion of CO2, or equivalent greenhouse gases, in the atmosphere. To achieve this target will require all businesses to go through a fundamental transformation, even more significant than any digital transformation achieved to date. The journey will dominate boardroom conversations for the coming decades.

So, how does marketing fit into this?

Marketing will need to take responsibility not just for driving growth in sales and profit but also for driving reductions in environmental impact.

Ben Essen

Marketing needs to take responsibility

Well at the moment, not very well. Sustainability has been off the agenda for most marketing departments, seen as a problem for operations and product teams to worry about. Even for organisations whose whole strategy is focused on sustainability, marketing struggles to play a meaningful role. Take IKEA, who have put sustainability at the heart of their approach for a decade, but only this year began to communicate around it.

There’s a simple reason for this: mismatched objectives. Marketing is the ‘growth engine’ of the business, whose key task is to increase impact by driving increases in sales, profitability, revenue, and as a side effect, emissions. The best marketing charts all go upwards and to the right! This creates an uneasy tension with sustainability teams, whose core objective is to decrease impact, driving reductions in greenhouse gases, water use, impact.

For any business to plot a meaningful path to Net Zero this paradigm needs to change. Marketing will need to take responsibility not just for driving growth in sales and profit but also for driving reductions in environmental impact. Twenty-first century marketers face an unprecedented challenge: how to increase profitability while decreasing emissions to zero? As an industry we must reverse a correlation between profitable growth and environmental impact that has existed for a century.

Measurement is a vital first step

We have created Ecoffectiveness as a way to help marketing functions tackle this issue because the first step to tackling the problem must be to measure it. Marketing can take an important first step towards sustainability responsibility by measuring the incremental carbon footprint generated by its output. This is simpler than it sounds. Lifecycle Assessment data now exists for most consumer goods and services, breaking down the environmental impact from manufacture and delivery through to consumer use and disposal. If this data is combined with data on incremental sales generated by marketing, the team can have an immediate snapshot of the climate footprint of their work.

For example, when we looked at the 2018 IPA Effectiveness winner Audi, econometrics calculated that 132,700 incremental car sales could be attributed to advertising. We multiplied this by the Lifecycle data per car to understand that around an incremental five million tonnes of CO2e were being generated by sales attributable to advertising.

Scientists suggest we can emit no more than 230 to 440 billion tonnes of incremental CO2e if we are to keep global warming to 1.5 degrees. At today’s rate of emissions, we will likely pass this figure within 10 years.

So, how can marketers contribute to the job of slowing this down? How can we ensure that this finite CO2e ‘budget’ is spent as effectively as possible?

As organisations embark on the race towards Net Zero marketing can own the problem of how to derive the greatest financial return from every ton of CO2 their brand emits.

Ben Essen

Return on Carbon

We asked ourselves a question: ‘what if success was measured not just in Return on Investment, but Return on Carbon? Because in ROI we already have a system for maximising the financial return from every pound or dollar spent. Ecoffectiveness proposes that we look at sustainability in the same way: ‘Return on CO2e’ maximises the financial return for every ton of CO2e emitted.

By measuring Return on CO2e we can start to compare campaigns, products and sectors to understand what marketing activity can best generate financial returns while decreasing impact, a fundamental measure for any business on the path to Net Zero.

Armed with this data, it’s then possible to start assessing where marketing can have the greatest impact. One area that will be most important for many manufacturing organisations, and is already being accelerated by businesses like IKEA, is in the Circular Economy. Less than 7% of the materials used to generate the products and services we buy is currently reused in future manufacture, with massive headroom to grow this figure.

Bring circular into the customer engagement process

This is not a challenge that operations and supply chain people can do on their own; it requires the participation of the end consumer. As such, marketers and digital teams have an important role to play in closing the gap, by building produce and service ecosystems that engage consumers in the reuse of materials and passing on of products.

I believe that Circular will define the next wave of the ‘craft’ movement. Ten years ago, brands started promoting authenticity and provenance by bringing the manufacture of products into the foreground; think of the supermarkets who bake on premise or the apparel manufacturers who customise instore. The next chapter is for these brands to bring circular into this customer engagement process. Imagine repurposing workshops in store and instructions not just on how to assemble, but how to disassemble.

As organisations embark on the race towards Net Zero marketing can own the problem of how to derive the greatest financial return from every ton of CO2 their brand emits. Supply chain owners and product people have got the business some of the way, but the next phase of transformation will require greater levels of consumer participation.

Guest Author

Ben Essen, Iris

Chief Strategy Officer

About

As Chief Strategy Officer, Ben leads a diverse team of strategists across 17 offices for global creative innovation network, Iris. Ben is responsible for strategy and planning, helping some of the world’s most exciting brands like Samsung, adidas and KFC to take a bold leap forward and reimagine how they connect with people and culture. In his time at Iris, Ben has worked side by side with CMOs to change their approach to marketing, spent weeks in the field trying to unlock the insights that will drive truly breakthrough work, produced global intelligence studies outlining the new marketing fundamentals and been a driving force behind Iris' uniquely 'For the Forward' culture. He is now on a mission to turn consumers back into citizens.