While conversations around ESG have increased in recent months, discourse around whether ad tech truly recognises its responsibility to address its impact on the environment remains without consensus.

So, what will advance the ESG cause in 2023? In our latest predictions piece, a panel of experts looks at what the next 12 months has in store.

Expect a better measurement system

In 2023, I predict we’re going to see a real industry push to standardise the way marketers measure the amount of carbon emissions their digital advertising generates. Currently, if you use any of the adland carbon calculators, you’ll probably receive several different answers to the same question: ‘How much carbon dioxide equivalent (CO2e) did this ad emit?’ As with any complex issue, there’re a million ways to interpret the data, including which variables you use to calculate the result.

However, there’s a real danger that when advertisers are called upon to meet their Net Zero commitments, they’ll simply use the lowest score available – not necessarily the right one. So expect adland to come together to establish what should and shouldn’t be included in the calculations. With two-thirds of UK marketers saying there’s not enough training programmes on ESG and sustainable advertising, I also think education will become a key focus for many advertisers.

Ryan Cochrane, COO, Good-Loop

There will be greater research into energy efficiency

In 2023, we will see even greater awareness and action taken around sustainability issues. The programmatic advertising industry is inherently energy-intensive in nature due to high levels of data processing. Over the next year, we will see more research and measures around more efficient energy management. At the company level, this might be accomplished through things like machine learning-based traffic filtering or data centres powered by renewable energy. Across the industry, efforts like SPO create more efficiencies that, in turn, result in less energy consumption as well. I want to be hopeful that we as an industry will make strides in sustainability as more people and companies make meaningful changes together.

Julie Selman, SVP head of EMEA, Magnite

Commercial and ethical reasons will drive change

Next year, more brands will adopt media practices that drive advertising performance whilst benefiting the planet. There is sometimes a view that sustainability is a “nice to have” that goes by the wayside in difficult economic times. That could not be further from the truth. Many studies have proved that adopting ethical media practices need not come at the expense of campaign performance, and that they can in fact drive higher return on investment.

At The GoodNet, we aim for all our campaigns to deliver a Good Outcome, which means achieving the highest possible ROI for an advertiser with lowest possible impact on the planet. For example, in a recent campaign for a health retailer we were able to beat their CPC target by 59% while delivering CO2 emissions 32% lower than the industry average. In 2023 more brands will embrace sustainable practices for both commercial and ethical reasons.

Oliver Deane, co-founder, The GoodNet

Purchase decisions are based on sustainable credentials

ESG has emerged as a major topic for most corporations around the world. Many are actively adopting sustainable practices because they recognise its importance for the long-term sustenance of the business and this is especially true in APAC, where about eight in ten consumers base their purchase decisions on whether a brand has sustainable practices.  

Being the first ad exchange to be certified as Carbon Neutral by Climate Impact Partners, OpenX has the ability to help brands and agencies secure Green Media Buys, which can be measured and compensated for carbon emissions of brand advertising campaigns. 

Priya Bhatia, VP business development, SEA, OpenX

Progressive values will be incentivised

Consumers are increasingly putting pressure on brands to take their civic and environmental responsibilities more seriously. A digital ad campaign that creates one million impressions equals one metric ton of carbon dioxide equivalent (CO2e) emissions. The same amount is roughly emitted by a return flight from London to Boston. In 2023 and beyond, we’ll see advertisers taking real steps to help reduce this impact by turning to carbon-neutral ad initiatives, like ShowHeroes Green Media, that allow them to measure their CO2 footprint and offset it by investing in carbon capture schemes.

Another way that advertisers will give back is to make it clear in their campaigns that donations are made to charities every time a user clicks on an ad or plays a video, incentivising a more progressive value exchange with audiences and sending a strong message that creates positive associations for the brand.

Steven Filler, UK country manager, ShowHeroes

Greater stakeholder expectations will be the catalyst

As policy makers raise the standards in 2023 around ESG disclosure across the UK, EU and US, companies will be required to have a greater understanding of their scope3 emissions - including those produced along the media buying chain. This, coupled with greater stakeholder expectations will be the catalyst for industry pledges translating into meaningful action.

Transparency and collaboration will progress and we’ll start to see the industry come together and align on key work streams such as measurement and accountability. Regenerative marketing will become mainstream as the advertising industry evolves for a more ethically and environmentally conscious world. We’ll also see more examples of how brands, agencies and publishers are achieving innovation, growth and importantly success through embedding sustainability within their core business.

Laura Wade, VP of sustainability, Essence Global

Nice-sounding statements must translate into real difference

Purpose is here to stay, but the heat is on to activate and turn nice-sounding statements into a real difference in people’s lives. In 2023, the green-washing wave will only grow forceful and there will be more pressure to quantify and dissect what’s truly sustainable and make it actionable for people.

Speaking about people, brands and leaders will have to inspire and mobilise stakeholders to take part in the urgent change or be left on the sideline. ESG can no longer be window dressing but will have to permeate the business from the leadership to the lorries on the road. It’s going to be an eventful 2023, make sure you get the balance right.

Thomas Kolster, founder, Goodvertising Agency

The crackdown on greenwashing will get stronger

2023 will be the year the advertising industry shifts from making speeches on improving the environmental impact of advertising to taking real action. We now know the scope of our environmental impact and the steps on how to measure and reduce our carbon emissions. So next year we will see an increased commitment from brands, agencies and ad tech companies to reach net-zero emissions by or before 2030.

Along with public commitments will also come a crack down on greenwashing. Businesses will need to be more buttoned up on both how all aspects of their operations and supply chain impact the environment and their detailed plan on how to reduce the impact of those operations, otherwise they risk being called out for greenwashing.

Richard Ottoy, GM EMEA, Sharethrough

Ad tech must adapt to changing customer expectations

Saving energy and environmental centricity will prevail in 2023, as consumer expectations have changed; nowadays, more than 70% of customers are willing to buy from a sustainable brand. There are plenty of ways that companies can keep pace, even by making smaller changes; for example, allowing employees to regularly work from home could help to reduce carbon emissions.

We should also be mindful that advertising can shape mass opinions so that sustainable businesses can organise climate protection campaigns for free. By investing in energy-saving projects and supporting local and international environmental initiatives that develop sustainable programmes for climate protection, ad tech companies can place themselves at the forefront of seismic change. Crucially, ad tech vendors need to redefine their operations to eliminate their carbon footprint on the planet, as this will be key for gaining long-term user loyalty and trust.

Roman Vrublivskyi, CEO, SmartHub