Amid the rollbacks we’ve seen by some big businesses of environmental, social and governance (ESG) commitments and diversity, equity and inclusion (DEI) initiatives, the picture in Europe’s ad market appears more mixed.
A new report from IAB Europe looking at the state of progress with sustainability initiatives in digital advertising shows that sustainability is continuing to climb up the agenda for business leaders, and significant strides are being made in carbon measurement. But the data also shows that progress is stalling in some areas, as issues around standardisation, education, and transparency continue.
Measurement improvements, but mixed results on progress
IAB Europe’s survey, which covered agencies, publishers, ad tech companies, advertisers, industry associations, and others, found that sustainability is ranked as the second biggest challenge facing digital advertising, just behind measurement. Twenty-nine percent of respondents listed it as one of the two most important challenges facing their company, up from 27 percent last year. (The improvement in ranking however was primarily driven by changes in attitudes towards addressability — last year 36 percent of respondents listed it as one of their biggest challenges, compared to just 17 percent this year. Google’s cookie reversal was presumably a major factor in that shift).
Within the ESG umbrella, greenhouse gas impact remains the biggest concern, picked by 61 percent of those surveyed, while DEI sat in second place, chosen by 50 percent. However in the broader ranking of industry challenges, diversity and inclusion was only picked as a top challenge by three percent of respondents, down from seven percent last year and 11 percent in 2023.
Within the report, there are signs of significant action taking place. Twenty-eight percent of businesses say they have set up a SBTi (Science Based Targets initiative) reduction or maintenance target, while 15 percent are in the process of setting one up. Meanwhile 48 percent of those surveyed say they now estimate emissions produced in the supply chain of their digital ads, up from 24 percent in 2024. When asked about their overall progress on their sustainability strategies, 36 percent of businesses said they had made “some progress”, up from 27 percent last year.
But elsewhere there were signs of efforts stalling. For a start, the proportion of companies who said they have made “significant progress” actually fell, from 24 percent to 22 percent. The proportion of businesses which have completed or are in the process of completing a sustainability audit is up just one percentage point since 2023, at 51 percent. And while nearly half of companies say they’re estimating their campaign emissions, only 14 percent say they estimate the environmental impact of all campaigns, up just two percentage points compared with 2024.
There’s also been a softening of attitudes towards carbon offsets, which are generally considered less preferable by climate experts than carbon reduction efforts. While just 15 percent of respondents “strongly agreed” that offsets should be used to drive progress in environmental sustainability, the proportion which either disagreed or strongly disagreed fell from 21 percent in 2024 to 17 percent this year.
The overall lack of clear momentum was perhaps best demonstrated by respondents’ answers when asked whether they agreed that the industry as a whole has made significant progress towards sustainability goals since the last iteration of the survey. Thirty-two percent agreed, 22 percent disagreed, while 46 percent were neutral.
Barriers remain
There are still major barriers which are commonly cited as roadblocks to progress. A lack of industry standards, lack of education, and lack of transparency are the three biggest challenges.
But the data also highlights some interesting changes in attitudes which may be slowing things down.
When asked about the factors driving their own sustainability programmes, the proportion who agreed that client expectations and demands are a factor fell by eight percent compared with 2024, down to 73 percent. Regulation is now considered a bigger factor than client expectations, cited by 79 percent of those surveyed.
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