The media business is becoming a complex game. A major study recently conducted by the Knight Commission concluded that the Internet and the proliferation of mobile media have unleashed a tsunami of innovation in the creation and distribution of information, a torrent teeming with hundreds of thousands of media channels and millions of media product choices. We also live in a world being confronted by an unprecedented array of environmental threats caused by human activities like agriculture, coal mining, oil extraction, industrial production, electricity use, transportation and deforestation — all of which contribute to climate changing greenhouse gas emissions.
A factor making the media game even more complex is the carbon footprint created by media brands and their supply chains as they compete for advertising dollars and vie for consumer attention. However, despite growing investor and corporate concern about the greenhouse gas emissions, or “carbon intensity,” of consumer products and their supply chains, limited consideration has been given to the carbon footprint of media products and their supply chains.
* Can advertisers afford to ignore the environmental threats associated with their media supply chain choices?
* Can consumers afford to ignore the carbon footprint of their media choices… even if their individual impacts may appear to be small?
This article doesn’t have all of the answers, but hopefully it will open your eyes to some of the issues and begin a broader discussion about what may be at stake. It is my hope that this and subsequent posts will lead to a better understanding of the carbon footprint of media products so that advertisers, media companies and consumers can resolve what I call “The Mediavore’s Dilemma” — how to enjoy the media bounty before us while minimizing the climate change risks and environmental threats associated with our advertising and media choices.
(You can read my earlier report for MediaShift: Is Digital Media Worse for the Environment Than Print?)
As concern about the environment and consumer awareness about issues like climate change rise, publishers are likely to respond with a bumper crop of “green” media products. Brands will probably pump out ads chock-a-block with green messages to run on the pages and pixels of those products. But the jury is still out on whether changing consumer, investor and/or regulatory pressure could change the game and move them to make comparable efforts to identify, measure, improve and communicate the environmental impacts associated with their media products and media supply chains. In the meantime, concern about climate change and carbon footprints continues to grow among global leaders and many high growth companies.
In a recent Ernst & Young survey of global organizations with greater than $25 billion in market capitalization, 73 percent had made commitments to reducing greenhouse gas (GHG) emissions. Interestingly, 43 percent of respondents believe that equity analysts are including climate change factors in their valuations and 30 percent anticipate climate change factors will find their way into these analyses in the next five years.
The report, Action Amid Uncertainty — The business response to climate change, probed 300 global executives from corporations with annual revenue of $1 billion or more on how they are responding to climate challenges. According to Mark Foster, group chief executive of management consulting and global markets at Accenture, “Effective carbon disclosure helps corporations mitigate investment risk and achieve more sustainable performance.”
Nonetheless, comprehensive carbon disclosure has not been a significant priority among major advertisers or media companies. To the extent that carbon disclosures have been made they have primarily focused on headquarters and travel related emissions rather than media supply chains or media products.
The recent BP Deepwater Horizon oil spill in the Gulf of Mexico has spurred a game-changing shift in Americans’ environmental attitudes. For the last few years, Americans’ environmental concerns declined as the public placed a higher priority on pocketbook concerns like the economy and energy, likely due to the poor U.S. economy. However, a recent USA Today/Gallup Poll indicates that trend has reversed in just two months’ time and the pro-environment position has regained the strength it showed for most of the last decade. Given the sensitivity of marketers to public opinion, it is highly likely that this change in public opinion could change the priorities of advertisers and media companies to carbon disclosure.
Another factor that could change the priorities of advertisers and media companies is regulation and/or fear of litigation.
“The question arises as to what legal structure will be able to cope with this coming explosion of green advertising and green media marketing claims,” said John Lichtenberger, publisher of GreenAdvertisingLaw.com. “Advertisers need to know what is required for such ads before they prepare them and consumers increasingly want to know the environmental backstory of the media products they consume…it’s sort of like ‘The Omnivore’s Dilemma’ for media.”
How Do You Choose Your Media Menu?
Just as we must increasingly give thought to how we grow, process and distribute the food that feeds our families, we must also step up our efforts to consider and disclose the flows of energy, materials and waste associated with the media products that feed our minds. Uninformed media choices are not an option. For advertisers and media companies they carry brand and regulatory risks. For the public they carry zero sum risks that may constrain or curtail freedom to communicate and result in other unintended consequences. Informed choices can increase the possibilities for a vibrant economy and effective government, as well as a sustainable and civil society.
One of the key obstacles to making effective comparisons and informed choices is the lack of standardized media product descriptions and category rules for the myriad of different media devices and media products that advertisers and consumers have to choose from. Media category definitions and product rules for lifecycle inventory data accounting and disclosure of carbon footprint data are needed. Without these, the best one can do is to use checklists or rely on guidelines like The Living Principles. While using rules of thumb is better than doing nothing at all, they are blunt instruments being used where more accurate and effective lifecycle analysis and carbon footprinting tools for media products are required.
Can We Afford Unsustainable Media Choices?
The Mediavore’s Dilemma is selecting media products and choosing patterns of media use that meet our needs for entertainment, education and communication, while minimizing the negative environmental impacts and carbon footprints associated with them. Ideally our media choices should lead to outcomes that are sustainable i.e. environmentally restorative, socially constructive and economically beneficial.
A template for much of what needs to be done exists in the collaborative efforts of the Carbon Disclosure Project and The Sustainability Consortium, as well as in the individual efforts of major brands like Ford, IKEA, Levi Strauss, and others. Those companies call on providers in their supply chains to disclose the environmental lifecycle impacts, climate change risks and “carbon footprints” associated with the goods and services they sell. These requests coupled with the specifications, standards and data that they develop are the keys to making informed supply chain decisions. By focusing and adapting their work to media devices, products and supply chains it is possible that the task of making informed media choices will be less of a challenge than a clean-sheet exercise.
Another factor to be considered is the issue of “materiality” i.e. when carbon disclosure is deemed to be significant to investors. Several large investor groups representing more than $8 trillion in assets under management recently requested the U.S. Securities and Exchange Commission to issue guidance on the disclosure of climate-related information on the basis that it is material to their investment decisions even to companies whose carbon footprints are relatively small — and thus whose climate change risks are not likely to be material.
While these calls for carbon disclosure have continued to grow, so far little attention has been paid to the carbon footprint of advertising or to the environmental impacts and climate risks associated with the creation, production, distribution and use of communication and entertainment media. However, last week the Ford Motor Company, one of the world’s largest advertisers, announced plans to survey 35 of top global suppliers on their energy use and estimated greenhouse gas emissions. And while it does not currently address the carbon footprint of advertising or media suppliers, it may in the future.
John Viera, Ford Motor Company’s VP of Sustainability and Environmental Policy responded to my call for insight about this trend with a statement that suggests a broader set of requests which might include advertising and media suppliers is a possibility:
“Currently advertising suppliers are not explicitly included in our supplier survey associated with Ford’s efforts to better understand the carbon footprint of its supply chain. At this time Ford’s initial efforts are focused on direct first tier suppliers providing higher carbon intensity commodities for vehicle production. However, beyond resources required for supplier engagement, we are not presently aware of any particular or unique barriers to measuring and reducing the greenhouse gas emissions of advertising suppliers”.
While some may find this statement encouraging, one must be realistic about the prospects that Ford or any other advertiser will be able to address this issue alone or to build a quorum of like minded brands to join them. A recent Accenture report on supply chain carbon reports that only 10 percent of companies actively model their supply chain carbon footprints or have implemented successful sustainability initiatives.
Why Lifecycle Analysis and Carbon Footprinting Matter
When the June 1996 issue of Life magazine ran a story about child labor in Pakistan that showed a 12-year-old surrounded by the pieces of a Nike soccer ball, activists across the U.S. were soon marching in protest outside of Nike stores holding up the photos. Nike quickly found how brands can be held accountable for the social and environmental transgressions of their extended supply chains. Shortly after the story was published, Nike stepped up its efforts in supply chain scrutiny and joined a coalition of companies, labor organizations and human rights groups to draft an industry-wide code of conduct that would eliminate child labor from their back story.
Today, there is growing pressure for major brands to call upon companies in their supply chains to disclose environmental lifecycle impact data. They are also called upon to work with suppliers to innovate the carbon and climate-change risk out of their product and packaging supply chains.
Until recently, those studying media focused on the social and economic effects of advertising and media content to determine their impacts on our opinions and behaviors. However, the size, scope, dynamics and growth rate of today’s media consumption patterns are making it increasingly important that we also consider the environmental lifecycle aspects of media devices as well as the carbon footprint of their supply chains, when we make media choices.
If there is greater awareness of just how big the media industry is, and of how big its carbon footprint is likely to be, significant calls for carbon disclosure are more likely to be extended to advertising and media supply chains. The media game is a big business with a carbon footprint to match.
How Big is the Media’s Carbon Footprint?
Veronis Suhler Stevenson, a private equity firm, reported that the media industry rose from the 10th largest sector of the economy in 1975 to the 5th largest in 2009. According to the 2009 Deloitte Media and Entertainment Industry Outlook, media and entertainment is one of the largest sectors in the U.S. economy: About $950 billion was spent on products and services provided by media and entertainment companies in 2006. That spending is expected to grow by 38 percent to $1.3 trillion by 2011.
Another key aspect of the media game that can be measured is advertising spend. A major source of revenue to media companies is the purchase of advertising by brands who spend in excess of $125 billion in the U.S. each year to sponsor media products. Close to $500 billion is spent each year worldwide. According to research firm Kantar Media, while advertising expenditures fell 12.3 percent in 2009 due to the recession, advertising expenditures in the first quarter of 2010 rose 5.1 percent from 2009 to $31.3 billion.
The U.S. Department of Energy reports that approximately 360,000 tons of CO2 equivalent greenhouse gas emissions are associated with each billion dollars of economic activity, which would mean the carbon footprint of the media industry could be as much as 500 million metric tons of greenhouse gas. That would be equivalent to the annual greenhouse gas emissions of 130 coal-fired power plants burning 2.6 million railcars of coal; or the annual greenhouse gas emissions from 95 million four passenger vehicles burning 56 billion gallons of gasoline. The DOE also reported that in 2008 the United States consumed about 138 billion gallons (or 3.3 billion barrels) of gasoline and emitted approximately 6.9 billion metric tons of CO2 equivalent greenhouse gas.
Is Size All That Matters?
In addition to measuring economic activity, there are other aspects of media’s carbon footprint — such as time spent consuming media — that can be used to estimate emissions. This is particularly important in the case of digital media in that, unlike printed media, digital media devices consume energy when being used and when they are in standby mode.
Veronis Suhler Stevenson estimated that overall per capita consumption of media in the U.S. has increased by almost 30 percent over the last 35 years, from 2,843 hours per year in 1975 to 3,532 hours in 2009, and about half of those hours are spent on videogames, Internet, and mobile services. Also, a recent Gamer Segmentation Report 2010 by research firm NPD found that U.S. gamers are spending 13 hours per week playing energy intensive games, up from 12.3 hours in 2009, with “extreme gamers” representing 4 percent of the sample surveyed averaging 48.5 hours of game play per week.
American consumers also appear to be adding more media channels to the menu as well as doing more media multitasking. According to the Thee Screen Report from research firm Nielsen Media, as of 2Q 2009 the 290 million people in the U.S. with TVs spend on average 141 hours each month tuning into television. Mobile video viewing continues its upward trend, with over 15 million Americans reporting watching mobile video in Q2 2009. This is an increase of 70 percent versus last year — the largest annual growth to date.
In addition to adding more digital media channels and products to the menu, Nielsen reports that American households are also adding more digital media devices… devices which can have significant “embodied energy” carbon footprints in addition to the energy they consume during use or in “sleep mode.” While the media industry lags other business sectors such as the building products industry in categorizing and documenting the embodied energy and carbon intensity of its products, the precedent nonetheless exists in development of lifecycle data repositories such as the U.S. Life-Cycle Inventory (LCI) Database.
Fifty-four percent of Americans have three or more TV sets in the home, and more than half of Americans (57 percent) who have Internet access at home, use television and the Internet simultaneously at least once a month. NPD reports that portable navigation devices have found their way into nearly 40 percent of U.S. households, up from 30 percent in 2009 and e-readers, such as the Amazon Kindle and Sony Reader, are increasing in penetration and are now in 5 percent of U.S. households. Also, the recent State of Media Democracy survey by Deloitte indicates that nearly 60 percent of U.S. homes now own a videogame console, a dramatic increase from 44 percent three years ago.
It is unlikely that such growth can be managed for sustainability without the identification, measurement and disclosure of carbon footprint and lifecycle inventory data.
Houston, We Have a Wicked Problem
Make no mistake, the Mediavore’s Dilemma is what Horst Willhelm Jakob Rittel called a “Wicked Problem” i.e. one that cannot be solved by a single individual or any one company using conventional thinking. Creating the tools and knowledge required to resolve the Mediavore’s Dilemma will require data, collaboration, informed dialogue and systems thinking that could take years.
There are several reasons why solving the Mediavore’s Dilemma is a wicked problem that has so far failed to reach a tipping point in support from advertising and media companies:
- Awareness of what is at stake is low and there has been little explicit investor, regulatory, consumer or activist demand for disclosure of advertising and media supply chain carbon footprints.
- Advertisers are two to three steps removed from the majority of media supply chain emissions, resulting in inadequate visibility across all tiers and levels of their media supply chains.
- No brand purchases more than 10 percent of the ~$125 billion spent on advertising in the U.S. annually, and a myriad of media products results in a highly fragmented market that limits the control of even the largest of advertisers.
- Functional silos and limited subject matter expertise in Life Cycle Analysis (LCA) are obstacles to deployment of media supply chain scorecards or standards-based scoring systems.
- The lack of meaningful LCA product category definitions for existing media products is an obstacle to standards-based disclosure and comparison of media product carbon risks.
- Media industry turmoil and changing media industry business models have made it difficult to make a coherent business case for the allocation of costs and benefits that would result from tackling the problem.
The fact that the Mediavore’s Dilemma is a wicked problem doesn’t mean we shouldn’t try to solve it, and it doesn’t mean that we must wait for it to be solved in order to take steps in the right direction. To raise awareness and spur action addressing these issues the Institute for Sustainable Communication (where I am a senior fellow) has been making slow but steady progress working with groups like the Carbon Disclosure Project, the Carbon Trust and Ad-ID to draw attention to the issue and reach out to advertisers and their supply chain partners through ISC’s Sustainable Advertising Partnership initiative.
Ultimately the Mediavore’s Dilemma is a problem that may best be solved as a “serious game” that engages our collective curiosity and expands our collective wisdom. In the meantime, it is my hope that your questions, comments, suggestions and support in response to this article will help raise awareness of our efforts and assist us in developing better solutions for all of the stakeholders that business, government and the world at large depend upon.
MediaShift environmental correspondent Don Carli is senior research fellow with the non-profit Institute for Sustainable Communication (ISC) where he is director of The Sustainable Advertising Partnership and other corporate responsibility and sustainability programs addressing the economic, environmental and social impacts of advertising, marketing, publishing and enterprise communication supply chains. Don is an Alfred P. Sloan Foundation Industry Studies Program affiliate scholar and is also sustainability editor of Aktuell Grafisk Information Magazine based in Sweden. You can also follow him on Twitter.