John Pabon is a sustainability author, consultant, speaker, and TikTok influencer with two decades of experience in the field. He positions himself as a bridge between complex sustainability concepts and practical applications for both businesses and individuals.
He is just the person we need to help us navigate and make sense of the recent changes in the world’s response to the Climate Crisis. Earlier this year, the Australian Government passed into law the Australian Sustainability Reporting Standard (ASRS), COP 29; the United Nations Climate Change Conference in Baku, Azerbaijan is on, the Australian Association of National Advertisers (AANA) has launched a new Environmental Claim Code, and the AANA joined the other industry bodies, the Media Federation of Australia (MFA), the Advertising Council of Australia (ACA), and the Interactive Advertising Bureau (IAB) in launching the local chapter of Ad Net Zero.
A lot of acronyms, but John provides a practical and accessible understanding of the importance and impact of each.
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Transcription:
Darren:
Hi, I’m Darren Woolley, founder and CEO of TrinityP3 Marketing Management Consultancy, and welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
If you are enjoying the Managing Marketing Podcast, please either like, review, or share this episode to help spread the words and wisdom from our guests each week.
It seems like things are finally happening in Australia in regards to addressing the climate crisis. The Australian government has passed into law, the Australian Sustainability Reporting Standards, the ISRS.
COP 29, the United Nations Climate Change Conference is in Baku, and the Australian Association of National Advertisers, the (AANA), has launched a new environmental claim code, and the AANA has joined the other industry bodies, such as the MFA, the ACA and the IAB to launch the local chapter of Ad Net Zero. Wow, what a lot going on.
So, to help us navigate and make sense of all this, my guest today is a sustainability author, consultant, speaker, and a TikTok influencer, with two decades of experience in the field. He positions himself as a bridge between complex sustainability concepts and practical application for both business and individual.
So, just perfect to help us make sense of all this. Please welcome to the Managing Marketing Podcast, John Pabon. Hi, John.
John:
Hey, thanks so much for having me.
Darren:
Look, it does feel sometimes when we talk about climate crisis and the environment generally, that it goes in and fits and spurts. It’s like one step forward, two steps back. There’s a lot happening right at this moment in time. Do you think there’s something behind this, or is it just coincidence?
John:
I’d like to think that there’s something behind it, some greater hand kind of guiding everything, but I think it’s probably more coincidence than anything else.
And certainly, as we’ve come out the other end of COVID, and I recognize, yes, we’re still in the middle of a pandemic, there’s been an increased awareness on issues around climate change or sustainability writ large, a lot of that because people are finally feeling, unfortunately, the impacts of it firsthand. And so, it is making the news, certainly from a business perspective.
Companies are now a lot of them jumping on the bandwagon about 20 years too late. So, they’re talking about it, raising it, and then certainly at the international political level, political leaders are doing a lot of talking, as you mentioned in the intro, maybe not so much action.
United Nations COP 29 Baku
Darren:
Yeah. And that is one of the things that I did notice is all of these initiatives in the past few weeks have been launched with great fanfare. But then there’s been this tale of muttering or sometimes, shouting that it’s either not enough or it’s a backward step, or it’s largely ineffectual.
Let’s start with COP 28, because I remember the one that was in Copenhagen (I’ve lost track of the number)-
John:
We’re on 29 now, sorry.
Darren:
Oh 29!
John:
We’re actually recording this as they’re coming up on their last days, they’ve just entered what’s called the “valley of death” in diplomatic terms. So, that’s basically the time where everybody’s too tired to do anything, and their eyes start to glaze over, but it’s also the time where they actually have to do the most work. So, it’ll be interesting to see what happens over the next 48 hours.
Darren:
But what have we seen come out of this whole process that the UN’s been running? Because it feels like it’s been going on for what? 10 years at least.
John:
It’s been going on for closer to 30. The first one was-
Darren:
Oh, COP 29, got it.
John:
It is annual. So, the first one was in Berlin back in, I want to say ‘95. And I started my career at the UN, I’ve been to COPs before, behind the scenes working in the secretariat, so not as sort of the general public. So, I have a little bit of behind-the-scenes knowledge of how these things work.
And way back, back in my day which would’ve been, fifteen-ish years ago, it was a very different kind of beast, this COP system. So, it was very much, you had delegates, politicians, experts, scientists in the room with civil society actually hammering out details. And that’s when we saw a lot of the big progress at the international level.
Things like the Montreal Protocol or the Rio Summit, these things that are still kind of in the parlance today of moving the needle forward. But it would’ve started probably around Copenhagen, which was 2009, and then certainly after Paris in 2015, which was kind of the big COP where everybody started to really recognize this as a thing that the UN did.
You started to see — I’ll use the word “infiltration,” I think that’s the right word, of the business community into this, of the general public, which is fine to have civil society. But now we have, I think the current COP, which is in Baku, Azerbaijan, I think there’ll be 70,000 people there.
There won’t be 70,000 people in the room doing the deliberations and policymaking, which is the point of this. That’ll be a small handful of maybe a thousand people, plus staff. What are the other 60,000 people doing there? They’re networking. Great, network, perfect, fine.
They’re doing business deals. There’s been a lot that’s come out through investigative journalism around all the oil deals that are happening at these things, which is counter thetical to what should be happening. And you sort of scratch your head and go, okay, well, you’re actually not having an impact at the policymaking level, which is the point of this.
So, it’s entirely diluted the point of these COPs, these international meetings. And that’s where we are now, where everybody looks at these (not everybody) — most people look at these and they go, that’s not really where the impact is happening.
They’re setting policy. These policies really are nice pieces of paper, but are they making the impact that they probably intend to? I don’t think they are. I think most of the impact is happening outside of these meetings.
Australian Sustainability Reporting Standard
Darren:
Okay. So, but some positive things, as you said, came out of this earlier. Did the Australian Sustainability Reporting Standard, which has passed parliament in September, I think it was, and, and comes into play from the 1st of January, 2025.
Was that one of these initiatives that’s finally trickled down to the Australian government, because now there’s a requirement of businesses of certain sizes or certain number of employees to actually have and report on their environmental impact and their programs, largely so that investors can see where they’re heading and what impact that they’ll have on the environment in the future. Was that one of these initiatives?
John:
It has been going on in various forms of different countries for quite a while. So, if anything, Australia’s a big laggard in this space. So, mandatory reporting for particularly large companies has been standard operating procedure in the EU and the U.S. for a very long time.
So, Australia honestly is about 15 years behind the rest of the world when it comes to this. But that is also a good thing because they can look at everything that’s gone on over the past 15 years and kind of jump over all the barriers and missteps that other economies have had.
The way the Australian system is going to work, if it does actually get rolled out, and I think it is going to, we still have fingers crossed, it hasn’t started yet. But if it goes to plan, then starting in January the largest companies will have to report first, and eventually, by 2028, most companies of a certain size will have to report.
So, they’re phasing it in, they’re letting these companies try. There’s probably going to be a bit of trial and error, a bit of mis stepping until they finally get to, okay, this is what is actually mandatory for you.
I think it’s a step in the right direction, we need absolute transparency. One of the issues (there’s several issues with it, unfortunately) is companies kind of don’t know what to do. They think they know what to do. So, a lot of them are very scared because they know it’s a government regulation, they have to do it, but they’re not quite sure the procedure.
They’re scared to actually be fully transparent. And I’m a big proponent of full transparency, easier said than done. But they don’t know what to report and they don’t know how to do it in a way that’s not going to get blow back from either the government regulators or the general public.
So, there’s a bit of trepidation as well when it comes to this, but again, move in the right direction, absolutely. And I’m looking forward to, as nerdy as the sounds, reading through some of these reports.
Darren:
Oh yeah, I’m sure they’ll make some fascinating bedtime reading, particularly from those-
John:
The cure for insomnia, you mean.
Darren:
Well, particularly for those companies that are in categories that were traditionally big contributors, major contributors to greenhouse gas emissions. And so, we’ve obviously got fossil fuel companies, but, even these, I think the cement construction industry is a huge … there are a lot of categories that are not necessarily top of mind for consumers and for the public as being major contributors to the climate crisis.
I think also, even as part of construction, steel production, with corking furnaces and things like that, produce huge amounts of greenhouse gas.
John:
That’s exactly right. So, a lot of the industries that purport to prop up the Australian economy are probably not the best things for the planet.
So, of course, a lot of fossil fuels and mining, building industry as well, and agriculture are the top four or five most polluting industries in the world.
So, through these initiatives around reporting and transparency, it will start to, in an ideal world, move the needle in the right direction. Because if they’re going to have to report on the these things and be transparent to the public, they’re probably going to get rightly so, blow back from the public about, “Oh, I didn’t know this was the impact of your business. Let’s try to clean that up a little bit.”
Darren:
So, moving from sort of the global and government picture to more of a focus on marketing, because the next one’s, the AANA have got a new environmental claims code. And we also want to talk about Ad Net Zero launching a chapter here.
But we run a research called State of the Pitch, where we ask agencies about the pitches they’ve participated in. And in that, there’s a question around ESG compliance, and what role it plays in the pitch.
It’s really interesting, the first round that we did showed that procurement, when they run pitches are right across all the issues: the environment, Modern Slavery Act, gender equality, many of the major initiatives from the UN sustainability development goals.
Consultants were further down, whereas procurement, 80% of the pitches would have those requirements, consultants were 40. When we got to marketers, it was right down at around 10 and 20% of their pitches. And when we asked marketers, many of them said, “Well, that’s something that’s handled elsewhere in the organization, either ESG or procurement or somewhere else.”
But increasingly, marketers need to be considering this, don’t they? Either in the way they communicate or the way they are doing business.
John:
Absolutely. So, what’s interesting is how the makeup of who practices sustainability within a business has shifted and evolved over time. And I chair a think tank group called the Asia Sustainability Leaders Council. It’s part of the Conference Board, which is a global think tank organization. And we discussed this type of an issue, sort of the makeup of sustainability in organizations earlier this year.
On the back of Unilever making announcements, I think it was back in May, saying they were rolling back a lot of their sustainability commitments. And we sort of said, okay, what in the world is going on? Why would Unilever, who’s sort of seen as the poster child of being the most sustainable, big organization in the world, why would they be doing this?
And what we came to realize is that it wasn’t a rolling back of their sustainability commitments, per se, it was more an alignment with reality. And this relates to what we’re talking about, I’ll get to it right now — because sustainability, and we’re talking sustainability writ large. So, environmentalism, social stuff, governance, all of sustainability in the business world for years has been driven by the marketing and public affairs departments of companies.
So, it’s been a marketing exercise, a communications exercise, until quite recently, we’re thinking 2017, 2018, where it started to move more into procurement, which is where it is now. And it started to be dispersed across (I’m going to use a really bad marketing phrase) the DNA of an organization, which is what we’ve always wanted. And now, we finally got it.
And so, we took it out of the hands of the comms folks, we gave it to the people that are actually probably have a better understanding of the entire holistic business. And because of that, there’s a realignment with reality. There is a shift in who is controlling the wheels of power when it comes to getting things done.
Most of the sustainability folks I talk to, they say their biggest headache is always dealing with procurement because procurement are across all of these things. So, that’s sort of where things are sitting now.
Where we need to be getting back to is a bit of a better balance, especially when it comes to MarCom folks, advertising folks, getting back into this conversation in a meaningful way, where they probably kind of were about 10 or 15 years ago, but even more so now, because my big belief is, these are the people that can really drive the behavioral changes, drive the changes overall. It’s the people that are communicating to the public, it’s the comms folks. So, they should be leading this.
And the one Achilles heel we’ve always had in sustainability is a lack of proper communications. You think about the traditional marketing of sustainability, it’s the mad max, it’s the nuclear hellscape, it’s the polar bear and the melting ice cap. It’s all these tropes that get people to sort of sit back and go, “Well, what am I supposed to do about that?”
So, if we get the comms folks on board and we get them communicating in the right way with things that people can realistically do that are impactful and positive, I think we’ll be headed in absolutely the right direction.
The Great Greenwashing
Darren:
So, when it was originally with the comms people, as you said, or the marketing people, this is where we saw a lot of the sort of foolish greenwashing, wasn’t it? Because it was, “I need a quick win, I need to be on the side of being a good guy for the brand.”
And so, they were often making promises or twisting, what was it? McCann used to call it “truth well told.” Well, I think they actually went over the line in some cases. And in fact, your book, The Great Greenwashing: How brands, governments, and influencers are lying to you — there’s some great examples there of the way that happens and the impact that has, and how to avoid it.
John:
Exactly, right. And we will go back to that example of Unilever, which happened after I had published the book, but they’re a really good example of marketing getting out in front of these things and really overpromising what they could do.
One of my old colleagues from BSR, Alison Taylor put it quite well. She said, “Why in the world would we have ever believed a company that sells laundry detergent and mayonnaise could have saved the world is beyond me,” and I get that.
And so, now they’ve realigned, and they said, “Okay, well yeah, maybe we couldn’t do all these a hundred things that we promised, but we can deliver on these three things.” And I think that realism is where we need to be, not idealism. Idealism is not doing us any favors.
Darren:
And so, you see a sort of trend, or the ideal trend is for yes, procurement and where companies have an ESG function, either within procurement or within the corporate leadership, that should be now going back and getting some balance in the way they communicate that, yeah?
John:
Absolutely. And one of the positive things, especially if we think of where sustainability is headed, especially with all the blips that happen, especially politically, one of the good things silver linings is that because sustainability is now across most organizations built into the DNA, it’s really hard to take out of that.
So, you can’t necessarily think of supply chain and logistics without having sustainability as one of its core functions. It can’t be removed from that anymore, which is great. So, politics can’t meddle with that.
The missing piece is that communications element, and the MarCom folks in getting them to really have sustainability built into their DNA.
Darren:
But there are organizations that really struggle with this because they don’t see an opportunity for being part of the solution. And so, they still default to trying to put off the inevitable.
I think a prime example of that is fossil fuel companies where we’ve seen time and time again, they’ve entered into communication and advertising programs that are focusing on, say, 1% of their investment in renewable energy, while at the same time, maximizing their return in fossil fuels.
John:
They’ve been doing it for years. I mean, ExxonMobil was such a great washer back in the sixties talking about how good they were for the planet, and they continued to do it today.
So, out of the mini-industries that there are, I think there’s 25 industries all told. There are a handful that until they entirely change their business model and or close their doors, they can’t be sustainable. There’s no way, they’re a net negative on society or the planet.
So, of course you have fossil fuels, mining, there’s defense and tobacco. So, all of those, essentially are net negative, they can’t claim to be sustainable. And the issue I would take is if they then start to, in their MarComs talk about how good they are for people in the planet, that’s where the issue is.
They’re a necessary evil at this stage of the game, we have to have fossil fuels if we want to live our modern lifestyles. I would love to see them close their doors and some brilliant innovators think of a solution to counter that, but we’re not quite there yet. So, for the time being, they’re necessary evil, but they can’t then go out and claim that they’re a sustainable organization because 1% of their business has divested from dirty industries.
You can’t have Raytheon talking about their eco-friendly ICBMs. You can’t do that, it doesn’t make sense. So, the timeline that we’re in, these are industries that will never be sustainable, so they should probably stop pretending like they are. Or do something to change and actually become sustainable, which is counter ethical to their entire business model.
Darren:
Well, and we saw that with some of the energy companies in Australia that were very locked into the traditional coal-based generation. And some through investor pressure have had to move that focus. I think AGL was a prime example of major boardroom shuffle to try and get a new focus. But often these changes are over a number of years, it doesn’t happen overnight, completely realigning a business to a new business model as you said.
Do you think the problem is that we’re so used to from an advertising perspective, saying, “Look at our achievements,” where in actual fact, it’s just as legitimate to say, “Yes, we’ve got a vision and now we’re going to communicate how we’re getting there” is much more authentic and honest than it is trying to say, “Oh, aren’t we wonderful overnight” and be more believable?
John:
We use the A word (authentic, authenticity) and marketers cringe because they hate it. But I think it’s so important. You need to be authentic, and you need to be relatable.
And I’ll speak on behalf of the vast majority of consumers: we want to be taken along on your journey. We don’t expect you as a company to be perfect. No one’s under any illusion that a company is perfect. We want to know your faults. We want to know what you’re doing to overcome those faults.
We want to, again, be taken on that journey with you. We don’t want to hear about you bragging about how good you are because in this day and age, we have access to the information that will help us pretty easily figure out that you’re pulling a fast one on us.
And the reason I’m a big proponent of 100% transparency (again, easier said than done) is because you can then start to take people, audiences on that journey. If you have an issue … I don’t know, if you’re a fossil fuel company for example, we know what the issues are, you’re not pulling a fast one on us by denying that.
So, talk about what you’re doing to counter that. Talk about the good things that you’re doing as well as the bad stuff, and make it a bit of a balance. I think people would find that refreshing and they would really appreciate a bit of honesty from these companies versus just trying to pull the wool over our eyes.
The AANA new environmental claims code
Darren:
So, getting back to the local Australian landscape, we had the Australian Association National Advertisers release a new environmental claims code. They’ve had one previously, but this is a new updated one.
And it’s interesting because you can see the conflict that occurs here in that, they represent advertisers who want to be able to go out and promote their products and brands through paid advertising, but at the same time, are trying to create guidelines or a code that people can operate in that are, and I’ll say in air quotes, “acceptable” to the general public.
That is such a balancing act, but particularly when the code is largely voluntary or at best, would have minor ramifications if you breached it. So, that’s a very difficult tight right act to walk, isn’t it?
John:
My issue with those guidelines has always been on the relatively new. So, it hasn’t been that long, is what you just brought up, the fact they’re voluntary and there are no repercussions. And those are two of the things you have to have if you’re going to get businesses moving in the right direction. It’s much more a stick than a carrot when it comes to getting businesses to act better.
So, it cannot be a voluntary system because if it’s a voluntary system, everyone’s going to opt out of it, unless there’s a push from their audiences, their consumers, or their clients to be better. That’s one of the … we talk a lot in this space around getting rid of capitalism and whatever. It’s the system we have, so we got to work within it until another brilliant economic mind comes up with something different, that’s fine.
But one of the silver linings of capitalism is that businesses always respond to what consumers are demanding. And the demand now, whether advertisers, marketers, or these businesses want to believe it, is consumers are demanding not to be lied to, to support products that are better for the planet or for humanity. So, this is just the way things are moving, and the train’s already left the station.
The fact that advertisers are still pushing back against that is concerning because these are not dumb people, these are brilliant minds, brilliant creative minds. They should see the writing on the wall and say, “Hey, why wouldn’t we want to get ahead of this?”
If I’m being a little bit flippant, don’t you want to work on something a little more interesting than just the stock standard stuff you’ve been doing for years? God, that would be so tedious and boring if I was in advertising coming up with the same campaign year on year. Use that creativity that you were given and put your brain to use.
Darren:
In fact, most of the great creative people in advertising at some stage have said the best briefs are the ones that have got challenges or frameworks that you have to be creative within. One of the hardest things is just do whatever you want. Because there is too many options and where’s the problem to be solved there?
John:
Exactly. And if they don’t do it now or if they haven’t started, and there are plenty of examples of advertising companies that are doing the right thing, and plenty of examples of those that aren’t, but it will catch up to you.
I mean, we were at that event at South by Southwest, and I gave an example of, was it Edelman? It was Edelman at Cannes, and he was being followed around by the clean creatives with big signs saying, “This person supports fossil fuels.” It was a brilliant approach. And there’s somebody now that’s doing things with Ogilvy to call them out on their portfolio of bad clients.
So, this stuff is coming for you, whether you want to believe it or not, you’re not going to be able to run away from it unless you start to run in the right direction. You’re not going to be able to get away from this stuff. So, the time is now to release … the time was yesterday, the second-best time is now, to start to get ahead of this stuff.
Darren:
Well, 20 years ago, but you know-
John:
This is where we are.
Darren:
So, on that, it’s really interesting last week, Havas who infamously took on the Shell business while being a B Corp, and then having all of the B Corp hold B Labs accountable to, is this on or not, because it largely, they felt made the whole process seem worthless — have now reported to their investors that working on fossil fuels has had a negative impact on their business performance.
John:
Funny that, it’s almost like we told them so. Havas is a great example, a very great recent example — and I read through that press release when they talked about their launching of the Shell campaign, which is like you said, what got their B Corp certification pulled from them?
And I don’t know what their head honcho is called, if it’s a CEO or a managing director, whatever it might be, the head person there is quoted as saying, “Well, we just bought the ad space for it, we didn’t work on the campaign.”
So, you could see he’s trying to roll back the responsibility. And that then leads to one of these philosophical questions around greenwashing or sustainability is who’s ultimately responsible? Is it Shell that’s responsible because they’re a part of a dirty polluting industry? Is it Havas that’s responsible because they did a lot more than by the ad space? Let’s be honest.
Or is it somebody else that’s responsible, who at the end of the day (to use an Aussie term) holds the hose for doing all this stuff?
Darren:
Yeah, the collective responsibility also doesn’t work because everyone else keeps going, “It’s him, it’s her,” they’re pointing every other direction.
John:
Absolutely. Especially if there are fines involved or regulatory implications, nobody’s going to be pointing the finger at themselves.
Darren:
It’s a really interesting question because we obviously in running tenders and pitches for clients see a wide range of contracts, and some of those contracts will put the onus on the agency to ensure that the communication meets all the codes and guidelines, and others, the agency pushes back and says, no, it’s on the client to be responsible.
Now, from the point of view of how much power does the agency have as a supplier/vendor to actually say, “No, we can’t run that because it’s outside of the guidelines.”
And the other thing is (and I find this always interesting in those contracts) if I was going to sue someone, would I sue an advertising agency which doesn’t have a lot of assets, or would I go after a much bigger organization with huge amounts of assets and resources, particularly if I was doing a class action on the basis of representing a large number of people.
I think clients need to think about this idea that they can pass the buck onto agencies to take responsibility. Certainly, the agencies, and as we saw, there’s an impact for them. It’s very hard to attract the best talent if you’ve got clients that have, let’s say, dubious needs and behaviors. But certainly, from a legal perspective, clients are ultimately responsible because they have the most to lose.
John:
That’s exactly right. And I think if we think about it through the Australian context, probably the perfect scenario would be for the client to be the entity that’s legally responsible, but the agency to serve as sort of that trusted advisor to guide them in the right way.
And the reason I think about that is because there are a smaller handful of agencies that as consultants helping them, that we can upskill and educate and get them going in the right direction, that they could then pass to their networks of potential clients and current clients to start to shift and move the needle in the right direction.
Again, like you mentioned before, all of this is a tediously slow process. I wish I was out of a job, I wish we could flip a switch, and it was all done. And I think the general public, the mythology around sustainability is, it’s so easy. It should have been done already, and it’s not at all the case, not at all.
Darren:
Well, wait, because we’re acquiring major changes in attitude leading to behavioral and structural changes to support that. And anyone that’s done any sort of change management will know it’s a slow, slow and often painful process. Because human beings like doing the things that they do, the way they do them when they want to do them.
While we talk about embracing the new and embracing change, it’s only at a very entertainment level, but philosophically, we really don’t want to change anything at all.
John:
No, not at all. And I’m sure you fall squarely into that as well. We are creatures of habit too. And when it comes to … I talk about this a little bit, I think I even mentioned in the great green greenwashing, the psychology around things, particularly consumerism is quite important. And for anybody listening, I’m not an activist, I’m not a greeny, I like getting on flights and going to Thailand, so I’m a normal human being. I’m not giving up my cell phone anytime soon.
But when it comes to this idea of conscious consumerism, the interesting thing is it, we haven’t been removed from conscious consumerism for too long. I’m not that old and my mom was using cloth nappies for me. People in high school were making their own clothes.
So, I say that because that means that it’s not necessarily ingrained in us, and it is not that big of a hurdle to shift. We just need to give people the information and the ways to do that, to get us back to a little bit more of a conscious consumerism. I think that’s one of those things that’ll help out a lot.
Ad Net Zero Australia Chapter
Darren:
Now, there’s two sides to the sustainability coin for marketers. The first is the way they promote and talk about their brands, products, and services. But then on the other side is the impact of the actual marketing process itself. And that gets me to where Ad Net Zero opening a chapter in Australia is really that focus, isn’t it? It’s about what’s called Scope 3.
And John, I wouldn’t mind you giving a clear description or explanation of what’s the difference between Scope 1, 2, and 3 for those that don’t know.
John:
Sure, I’ll do that first, because that’ll inform our talk, I’m sure. So, every business has an environmental impact, and they have emissions. So, humans have emissions too, but let’s talk about it through the lens of business. And there are three types of emissions, which we call different scopes.
Scope 1 are emissions that business is directly responsible for and has control over. So, that’s things in their offices, it’s things directly related to what they can control and manage.
Scope 2 tend to be the emissions from direct suppliers. So, kind of those first-tier suppliers of a business that, again, they maybe don’t have direct control over, like a Scope 1, but they have a bit more control.
Scope 3 are the emissions from suppliers of suppliers, on and on and on and on. And one of the most startling statistics is Scope 3 emissions for most businesses make up over 90% of their emissions. So, it is the majority.
Right now, and for the past decade or so, most businesses have focused on Scope 1. Some have talked about Scope 2, we’ve just now started talking about Scope 3, and I don’t think anybody has their heads around how to actually monitor it to start, let alone doing anything about it.
And so, if we really want to be moving the needle on that, I think that’s where government regulation has to start stepping in to shore up the supply chain businesses writ large. But different conversation for a different day.
Darren:
Well, and there is a component of the ISRS that has Scope 3 contributions being reported in there, but as you say, it’s not actually locked into a particular rigorous framework. But let’s put it in an advertising context.
So, there’s the organization that markets their products and services. So, everything within the office and the things they can directly control is Scope 1. Their electricity supply for the office, the supplier of that and other things that they can choose with that supply, that’s Scope 2.
But when they go to an advertising agency or a media agency who go on and buy production services or media services, there’s Scope 3 contribution. So, for anyone in advertising, that gives you a fairly practical example of where that sits.
Now, correct me if I’m wrong, but Ad Net Zero is focusing largely on the contribution of those Scope 3 emissions in media. Is that correct?
John:
That’s right. So, Ad Net Zero is based out of the UK and the EU, which are highly regulated industries when it comes to sustainability, but also particularly, emissions. Again, they haven’t really got a full handle on Scope 3 just yet, but that’s certainly one of their focus areas.
What will be interesting to see is how that plays out here in Australia where the regulatory landscape isn’t as strong and restricted or doesn’t have as stronger handle on things. Will they tap into what’s been happening in the UK and the EU to help out here in Australia? I would hope so. But it’ll be interesting to see again, sort of how that ends up playing out.
Darren:
So, this has been launched by the industry bodies, the AANA, the Media Federation of Australia, the Advertising Council of Australia, and the IAB. What would be the purpose of those organizations launching and supporting Ad Net Zero in this market?
John:
The cynic in me, which tends to come out most of the time would say it’s just an exercise in greenwashing. It’s a way for these industry governing bodies to say, “Yep, we’re doing the right thing, and look at us, we’re good.”
In reality, I think it’s far more nuanced than that. I think there’s an element of showing a positive move in the right direction, which is amazing. There’s also the element of pushing the ad industry to also be moving in the right direction. And these are conversations that have been happening in the ad industry for a year and a half, two years now, where the industry has been moving in that right direction and needs a little bit of guidance.
So, I think all of that put together is kind of a perfect storm of getting the ad industry going in the right direction as long as they capitalize on the resources that Ad Net Zero has and that it’s bringing here to Australia.
Darren:
Yeah, look, from my perspective, 2007, Christopher Sewell and I, were working on the CO2 Counter that he developed. And I remember, you can still find it if you search for it, we put out a press release that calculated the CO2 emissions from a 30-second TV ad in the number one rating show on Australian television at the time. And the cynicism that came from the industry.
So, it’s gone from that in 2007. It’s only taken what? 17 years for them to actually set up their own organization to focus on this.
John:
We talk about how slow things move, right?
The US Presidential Election
Darren:
Well, there is a bigger shift happening though. And the reason I brought up 2007 was because then, there was a real focus on the environment and sustainability, and the Australian government was talking about a carbon tax.
In fact, I think they went on to introduce one, except that, at the time, we had a global financial crisis — in the rest of the world, it was called a recession, but in Australia, we managed to avoid it because of our mining and agricultural exports.
But the same thing appears to be happening now with this hyperinflation or high inflation and stagnation. That there’s been a shift and we’re starting to see politically on a global basis a move back to sort of nationalism where there’s less of the sense of global citizen and more of every person for themselves. Is that a concern, do you think?
John:
So, sustainability, at least over the past 30-ish years, always goes through fits and starts of do people pay attention? Do governments want to do anything about it or not? And it always comes down to economics and what’s happening at the economic level.
So, if I think of the U.S. election, for example, I’m based in Australia, but anybody with a good ear can hear an American accent. We just finished the U.S. election, Donald Trump’s been elected. But if you look at and drill down into what the main concerns were for the majority of Americans, sustainability or anything related to climate change was right at the bottom of the list. Whereas maybe 10 years ago, it would’ve kind of been a lot higher on that list.
And the reason is, if you are struggling to put food on the table, you don’t know if you’re going to have a job tomorrow, you have no healthcare — saving the planet, that big chunky monster that’s out there is not going to be top of mind for you. It seems almost like a privilege to be concerned about these things, and I understand that.
My big piece of working in the sustainability world has always been working with private sector companies because I think they’re not as impacted by these massive shifts in geopolitics and economics, and they can sort of keep chugging along working on the good work of being better corporate citizens, and thus, impacting the choices that consumers have.
So, that’s still going along. I don’t think honestly, impacts of economics, politics, particularly in the United States, are going to stop the trajectory of where we’re going and moving in the right direction.
So, even though it might seem all doom and gloom and there are plenty of vested interests that would have you believe it is, I am much more of a pragmatic realist, and I think we’re moving in the right direction absolutely.
Darren:
I also, and correct me if I’m wrong, John, but I think I read you put a perspective that to just look at the United States of America as the only country that is leading or could impact the climate crisis is actually incorrect. That there are many other nations that are doing a lot of work and making huge inroads, one of them being China.
I mean, China for a long time was generating their electricity using brown coal from Victoria and burning it like crazy, but they’ve been very efficient. One of the advantages of a communist capitalist society in actually moving quickly to solar and other renewable energies, haven’t they?
John:
Absolutely. And the prompting for that missive that I wrote was a lot of Americentrism that was all over social media talking about, “Oh, Donald Trump was elected, the world is screwed.” And no, the US is one of 194 countries that are out there. And yes, they have an outsized impact on things, but they’re not the only one.
And if we’re being perfectly frank, they really weren’t pulling their weight to begin with. They’re really far behind the rest of the world when it comes to climate action, environmentalism, et cetera, et cetera. That doesn’t mean nothing is happening for any Americans listening. There are great things happening in the United States, but you’re not the only ones out there.
I think of, like you mentioned, places like China. So, I lived and worked in Shanghai for a decade, and I was there during the time where all these shifts were happening, and it was amazing to see the impact that a command-and-control economy can have on things like the environment.
So, as long as they have the right things in mind, it’s amazing what can happen. So, the command-and-control economy then sort of putting the stake in the ground and saying, “Hey, we want to take up a mantle as a global climate leader, sustainability leader,” and they’ve put their money where their mouth is.
They’ve done the investments, something on the order of the same amount the entire EU invests they do every year in green technologies and innovation. They’re reaching peak coal faster than they thought they were going to. They’re one of the only countries semi on track to meet their Paris climate targets. No other country is like that.
And they’re doing all of this at the same time, they’re being asked to make all the world stuff. So, it’s pretty amazing. Is it perfect? No, they’re moving a battleship around in the water, it’s going to take a minute. But they’re doing a lot more than sitting back doing nothing.
And there are other amazing places. The EU is a great example of where governance is being pushed out of for the world. You see things happening in places like Southeast Asia, Malaysia, Indonesia, where they’re starting off with a massive handicap, but really the government regulation and the movements of the private sector pushing things in a bit more of the right direction.
Darren:
And look, then there are countries that absolutely rely on us getting this right. The countries in Oceania and the Maldives, it is an existential crisis. Perhaps we should be running ad campaigns that encourage people to cut their greenhouse gas emissions, otherwise they’ll have nowhere for their island holidays.
John:
I think that’s a brilliant idea. Pitch that over to the old DDB and see what they say. No, I think it’s exactly right, you hear this quote, and every time I hear it, I cringe and I want to strangle somebody, not that I’m a violent person.
But they say, “Oh, we’re doing this for the next generation.” No, we’re the generation they were talking about. And even worse than that, people in the developing world have been going through this for years.
So, I do talk about my time in China quite a bit because it really formed how I approach sustainability where if somebody asks me, “Oh, what’s the difference between sustainability and the developed versus the developing world?” In the developed world, it’s still very much an academic exercise where you see panels of people talking about things at arm’s length to the real impact.
In the developing world, people are facing the impacts of these things day on day. They step outside, they’re ingesting polluted air, they’re drinking dirty water, eating bad food, they’re boiling to death. So, it’s not an academic exercise. It’s very much happening now. And like you said, an existential crisis.
And so, if I think about it through the lens of what’s happening right now at COP in Azerbaijan, So, the main purpose of this COP was to pass what’s called climate finance, which is basically how can the developed world help give money to the developing world so they can start to make the critical adaptations so that places like the Maldives aren’t going to be underwater next year, which they kind of it’s already happening to them.
And the developed countries are sort of saying, “Yeah, we’ll give you some money.” And the developing countries are going, “Well, it’s not nearly enough, and by the way, the money you’ve given us, you’ve given it as loans that we have to pay interest on that we can’t afford. So, what’s it going to be?” And so, that’s why they’re at loggerheads right now and nothing’s happening.
And so, a lot of particularly developing countries have said, “Hey, we get this process is going to work for us, we’re just going to go and do it on our own.”
We’re looking at places like China, Singapore, Malaysia, a little bit more cashed up places to help us out, versus looking to the countries in the developed world, which by and large are the ones responsible for the mess we’re in now, and asking them for money because they’re sort of like out of work gamblers and the bookies are chasing them for money and it’s just not happening.
Darren:
I remember after Copenhagen, there was a terrific article that explained it this way: all of the developed countries are sitting around a table at a restaurant having had a fabulous three-course meal. And then the developing countries came and sat and had dessert and coffees and petit fours. And when the bill came, the developed countries said, “Well, we’ll just split it amongst all of us, shall we?”
And they were pointing out that you can’t have enjoyed the century of generating value and developing your economies, and then expect everyone to pay equally. And it sounds that we still haven’t solved that problem, have we?
John:
No. And it’s a brilliant analogy that I’m absolutely going to steal. And the interesting thing you bring up Copenhagen. Copenhagen is where the idea of this climate finance model actually took … it didn’t take shape there, but it was finally passed. That was 2009.
The developed countries were supposed to pay something on the order of a hundred billion a year. And the OECD have said, “Yeah, you guys have done that technically.” But like I mentioned a second ago, the majority as of the-
Darren:
As loans.
John:
As loans. So, the majority of the way that you’ve made up that shortfall is because the developing countries have paid the interest. And this is where it comes down to, again, that academic conversation versus practical existential crisis where the developed countries, and I don’t mean to harp on them so much, but let’s be honest, they’re sort of saying, “Oh, it’s not our problem.”
And so, what will be interesting to see now is because it now absolutely has become their problem. We see hurricanes happening with greater frequency. Places in North America over the past few months have been inundated with hurricanes that have never happened before.
So, now, that it’s finally become an existential crisis for people in the developed world, maybe with a little bit of political pressure, the policymakers positions will change.
Sustainability for the Rest of Us
Darren:
Just bringing it back to home. Apart from people getting a copy of your, Sustainability for the Rest of Us: Your No-Bullshit, Five-Point Plan to Saving the Planet, which is available at all good online booksellers … what are things that people working in advertising and marketing, what can the individual do?
Because we’ve been talking largely about government and companies and things, but are there things that the individuals can do? Because I know so often, I have these conversations with people and they go, “Well, what’s the point? One jet takes off and there’s all my CO2 emissions for a month.” What can individuals do, John?
John:
And it’s true, right? So, let’s not be pollyanna about this. The impact that groups like the 1% wealthiest people in the world, the impact they have versus the things that we’re trying to do as the hoi polloi, I get it. And it’s absolutely, you look at that and you go, forget it. This is not worth it, but it absolutely is worth it because we’re moving in the right direction.
So, I say this from a very pragmatically realistic perspective. And for those in the advertising industry, like we were mentioning a little while ago, you have such an opportunity to shift behavior change because that is what you do. It’s what you know how to do.
So, if you want to make that difference in the world, if you want to offset all of the terrible things the high and mighty Kardashians are doing, that’s your place to play and really focus in on that.
I talk about it for when I’m talking just to the general public, what can they do — I always say that it’s really important to find what it is you want to focus on and be laser focused on doing that thing. Because as people who care, we want to do everything.
We want to go outside, adopt every dog, feed every homeless person, go read to the elderly on weekends, and then build a home on our vacation. You can’t do that, right? So, pick what it is that you’re going to be able to contribute to.
I talk about it through the idea of passion points. So, what you’re passionate about, what you can contribute to, or what you have an expertise in. So, bringing it back to the advertising folks, that’s your expertise, your creativity, the way you can have an impact on this world, focus on that.
Hone that, identify the briefs that are going to help you push that narrative forward. Think creatively about how you’re going to do it. Look at the amazing examples that already exist. You’re not starting from nothing.
So, there are examples that are out there of organizations that have put amazingly creative, positively impactful advertising out there. So, look at those and just start to push that narrative forward in your organizations.
Especially maybe if you’re not sitting at the top of your organization, that doesn’t mean you can’t have an impact. That doesn’t mean you can’t start to be filtering out briefs that you say, “Hey, not for us.” “Hey, no, this is going to have a negative impact on us as a business.”
Forget about the planet stuff for a sec, use business language and talk to people in a way they understand: “This is going to have negative implications, it’s going to hurt us with the regulators. It’s going to end us up in lawsuits and legislation.”
So, think about things that way and think about how you can start to really choose those briefs that are going to have the biggest impact in a positive way on the planet and are going to really stretch your creative thinking. Because like I said before, don’t you want to do that?
Don’t you want to go to work every day and not only leave at the end of the day and say, “Hey, I did the right thing. I made a difference today. But also, that was really interesting, I enjoyed going to work today.”
Darren:
And there’s a direct impact. We get this right. We’re not going to fry on the hell on earth or drown. I mean, it’s interesting, a friend in insurance said the insurance industry is terrified because it’s getting to the point they will not be able to insure a home or a building or a business because of the unpredictability that is increasingly being built into the climate crisis.
So, there is an existential threat whether people like to admit it or not, and there’s no point running around being anxious all the time, but certainly, to take your point of doing something every day.
John:
Absolutely. And for anybody listening that maybe even you’re not in the advertising or MarCom space, don’t fall for the doom and gloom. Please don’t. Because it is very easy to do so, and if you do that, you’re just going to sit in despondency and apathy, and nobody needs that.
We need to be up and active in doing things. And if I put on my greenwashing hat for a sec, a lot of those doom and gloom messages are being pushed by the old favorites that are using this just as a modern form of greenwashing. So, you think it’s your favorite influencer pushing a doom and gloom message with scientific statistics, but that was probably done by ExxonMobil.
Darren:
Yeah, absolutely. Look John, thank you so much. We’ve run out of time, it’s just flown by. It’s always fabulous hearing you share your thoughts and bringing some common sense, the least common thing that’s around these days, but common sense and clear thinking to the topic. Thank you so much for taking time today on being on Managing Marketing.
John:
Absolutely. Thank you so much for having me.
Darren:
And you can catch John on … what’s your TikTok feed because I’m following you. What’s-
John:
You’re a stalker, I realized this. So, my TikTok is at John A. Pabon. Somebody took my name already, so I had to use my middle initial.
Darren:
Excellent. Well, thanks very much.
John:
Thanks.
