How dentsu Is Laying the Foundations for a More Sustainable 2022
Anyone who’s ever seen the dentsu Tokyo HQ (affectionately nicknamed ‘The Death Star’ by some), will get a sense of the scale that the advertising network operates on. Which makes the job of Anna Lungley, the holding company’s global chief sustainability officer, one that has the potential to actually make an impact on the scale of the climate crisis we are all facing.
The business is aiming to go broader and deeper with its ambition to become the most sustainable network in the market, and by several metrics is ahead of its (scientific) targets to decarbonise – for example reducing absolute Scopes 1 and 2 emissions by 39 per cent during 2020 versus a longer-term target of 46 per cent. Part of Anna’s role is to ensure each employee across all of dentsu’s agencies understands the strategy, drives more change/purpose work for clients and changes their own behaviour.
LBB’s Alex Reeves spoke to Anna to find out how dentsu thinks the advertising sector needs to change some of its ways to make long-term sustainable change effective, and to find out some simple ways of achieving tangible change to make sure we use this year to curb global heating as much as we can.
LBB> You have a global role as dentsu’s chief sustainability officer since 2020 - the first person in such a role at the holding company. What does that mean for dentsu?
Anna> It's been really exciting because dentsu, like any other holding company, incorporates multiple agencies and markets. I think we had about 160 sub brands which we're collapsing now into master brands. Being able to set and launch the strategy which is for everybody in every market, every agency and every role has been really exciting. And I think a really big shift from a collection of brands into more of a unifying strategy for the organisation.
I was brought into dentsu in recognition that we were doing a lot of really good stuff, but it was CSR - it was slightly disconnected from the business. And in 2018 when I came on board as global head of social impact, we launched a short-term 2020 strategy while we developed the longer-term strategy. The strapline was ‘from CSR to social impact’. So recognition that what we wanted to do is really shift the mindset to something that was not delivered by a small team on the side of the business, but was really embedded within the business strategy and tightly aligned with helping to future proof our business model.
We launched our 2020 interim goals which we exceeded almost all of, which is fantastic, despite volunteering being impacted by Covid. All the carbon targets, all our targets from female entrepreneurs SDGs [sustainable development goals] etc. We did really well there in terms of, I think, galvanising all of our people together.
Then, at the start of 2021 we launched the long-term 2030 social impact strategy that covers sustainability and DEI, bringing all of it together in a unifying vision. It's been an evolution and we've been able to effectively start with a blank piece of paper and set the most ambitious strategy.
LBB> What were the key considerations in setting out that agenda and making these changes along the way?
Anna> One of the tensions that I think we started with when I first joined was that dentsu was known for the work we did with our clients but wasn't known as a brand outside Japan. The reason I joined dentsu was I felt that our role in driving sustainable behaviour change was so significant that dentsu needed to really stand for something on its own, as well as the work that it did for its clients. So that's been a mindset shift as well in terms of really recognising the value that we create, which is our ability to inspire action and behaviour change.
The first thing that we did was just re-establish governance, right to board level. Our CEO, Wendy Clark, chairs the board committee that includes representatives from across the business. We looked at changing and aligning all of our reinforcement mechanisms, formal and informal, so for example embedding ESG [environmental, social and governance] KPIs into our balance scorecard, and then putting in place all of the formal targets. I think a lot of agencies have informal targets. We put in place science-based targets on carbon. We were the first holding company to set a science based target of 1.5 degrees, and a net zero target. We put in place new KPIs around leadership. So 50% women, not just at senior leadership level, but actually a second target which is the executive team to ensure we see that flow through, really making sure that we had a robust way of measuring progress along that journey.
The other thing that we do which I think is really important is that we launched accelerator programmes. We recognised we had a lot of work to do to bring all these different brands and markets together. So we launched four accelerator programmes to drive progress at pace, one of which was RE100, which was switching the markets to renewables. That meant that we would decarbonise at the same time.
The second was launching the programme to support women in the supply chain. We currently work with 105 female-founded businesses within our ecosystem, helping them to thrive.
The third was launching the code, which is our global flagship schools programme. That's now live in 13 countries with another seven markets working on the curriculum. And we launched a global food waste challenge, a few months ago, that we're driving in schools.
The final accelerator programme was ‘Malaria No More’, a global campaign to end malaria, which has reached about 540 million people to date. And that's all powered exclusively by volunteers and pro bono.
LBB> I would imagine those have been helpful catalysts to focus all the parts and areas of dentsu around.
Anna> Absolutely. If you think that all clients are demanding integrated solutions, that's what big global clients want. It's new behaviour for this industry. The malaria campaign that we launched, you know, has creative, media and CXM - our three service lines - collaborating together across about 20 different countries on one global campaign, as they would for any potential future commercial client. So it's taught us how to collaborate across service lines. It's united people in a common purpose. It's helped us to get to know each other and the way that we work, and appreciate the cultural variation. So it's been really transformative in terms of binding people and showing people what good looks like.
LBB> Since you've had these KPIs in place, have you had any big revelation moments where you've realised how much of an impact you could make?
Anna> There have been some real lightbulb moments. One of which is that the physical footprint of the industry is actually extremely limited compared to the automotive sector or the oil and gas sector, but it's the influence that we have on society that we need to focus on. It's not enough to just reduce our own carbon footprint. We have to work with our clients to look at the behaviour that they're driving in society, and help to shape that as well. I think that's been the first realisation.
The second realisation - I would say that this is a strategy for anybody, in my role certainly - is that the more data you have, the more evidence that you have, the stronger the business case for investment is, the stronger you can demonstrate you know to your leadership team that this is the right strategy for the business. And that's enabled us to integrate sustainability into every element of the dentsu strategy. You can only achieve that in a big multinational if you have data-driven insights. We have one of the world's largest data platforms, it is our data-driven insight that helps us power the work that we do for our clients. Those are the key learnings.
The reason we've been able to get traction so quickly at dentsu is because we've been able to unite 45,000 people in a common vision. I have a tiny central team of four people. The campaigns we’ve delivered are much bigger. We had 100 people working on the malaria campaign, all volunteering. So it unlocks all that discretionary effort in the market. People are doing it because they love it, they want to be involved and they want to make a change. That's a huge driver. We had our highest levels of employee engagement during the pandemic, which might seem counterintuitive, but a lot of that is because our people are really beginning to engage.
LBB> You speak about working with your clients to minimise their impact and improve things where you can within their organisations. But broadly speaking, advertising agencies are there to grease the engines of consumerism. So how do you go on that journey with clients who are paying your bills as an agency?
Anna> It is an excellent question, and it does actually start again with the data and insight. Virginie Helias is the Chief Sustainability Officer of Procter and Gamble, and they're one of our biggest global clients. She had a lightbulb moment probably a decade ago when she realised that most of the emissions didn't come from washing powder, they came from the temperature of the washing machine. By lowering that by 10 degrees, you could fundamentally reduce emissions. And that's a really important insight. If you think about it, we can continue to power growth, we can continue to drive sales, providing we're selling the right things.
If you look at, for example, IKEA's plant balls. They have 4% of the carbon footprint. If you are looking at a plant-based range, for example, you can sell considerably more with less planetary impact. So I think we just need to be really considered around the products and services we're helping to bring to market.
Our clients all need to change, they all want to drive that change. The net zero targets have been adopted by 70% of the world's economy. That's dripping down into departmental policy. It's changing their business strategies. They need guidance and support to understand how they can grow and thrive and we can help them to do that by understanding and creating a pull for that right kind of product. It's what consumers want to buy as well. 90% of millennials will switch product to product based on its sustainability credentials.
LBB> What have been the biggest challenges in the last few years for you in terms of driving this?
Anna> It's very challenging to deliver community programmes when everybody is locked down. There are some changes and challenges that we've had to experience over the last year. One of the things that we had to do in 2020 was very quickly pivot all of our community programmes to digital. The programmes that I've talked about in terms of supporting female founders, in terms of supporting young people in schools, we pivoted all of those solutions to digital in April 2020 so that we could continue to deliver. The feedback that we had from our partner in the UK was that there were only two organisations that didn't pause, that actually continued to drive delivery. So we've had to be quite agile in terms of what we do.
Equally I redirected a lot of resources into accelerating the development of our carbon targets just like any business strategy. At dentsu we're very lucky, we accelerated the rollout of digital collaboration technology and we've been able to continue at pace. It hasn't slowed us down. It's challenging to develop a long-term strategy for sustainability 2030 when these things hit and everybody changes direction. So one of the things that you have to do is set a long-term strategy that's flexible enough to recognise that there are going to be these rapid societal shifts. We can't stay on a fixed route.
The challenges that we're looking to address at dentsu which are climate action, inequality, creating a responsible and healthy media ecosystem. Everything on our planet is dependent on having that because that's what shapes our views and our mindsets. These are really big challenges and they're long-term challenges that we're going to accelerate. That's what we're focused on.
LBB> You've got all these brands around the world with thousands of people working for them. What does your day actually look like doing this stuff?
Anna> Well, I start with Japan and I end with the US. It's definitely following the sun. It is rich, it is varied, it is multicultural, there is never a dull day. Media is young, it's creative, it's innovative, it's exciting. All of that brings challenges. You're always trying to steer people in and bring them to alignment in the same direction. But certainly never a dull day.
LBB> There are hundreds of initiatives, tools and guidelines, if you want to transform a business and make it more sustainable. Are there any parts of the internet that you find yourself directing people towards?
Anna> I think tools and frameworks are great. I work very closely with Cambridge University, CISL, and if you go onto their website they have loads of free-to-download resources on everything from supply chain to leadership behaviour. They also have some fantastic modules, including one that all my team and lots of people at dentsu have done - sustainability management essentials. I think it is really important.
One of the things I would advocate to anybody working on this agenda - which will be all of us soon - is that it's really important to understand what you're trying to achieve because of the law of unintended consequences. If you guide your clients to do something which on the surface seems like the right approach and turns out not to be then clearly that's not a good thing. So we invest in training and education at dentsu to make sure that our people understand the sustainable development agenda and know how to align our capabilities with that.
We at dentsu have developed our own media calculator which looks at transmission, not just consumption - it's the only one in the industry that does. That helps us to really measure the carbon footprint of our client media strategies and understand how we can neutralise or decarbonise. But our view is also to open source as much as we possibly can, because we're a big holding company but there are a lot of small agencies out there that need these tools and frameworks. So where we can we make them available and we share them.
For example, with the new calculator, we're collaborating with DIMPACT on one and we're also working with Ad Net Zero. In the same way the AdGreen calculator's been made available, we'll look at making it available through Ad Net Zero. Tash, my teammate has just recorded a module on media decarbonisation for the new Ad Net Zero training that's coming out soon.
