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News Analysis 27 Jul 2021 - 3 min read

As Telstra makes sustainability top priority in consumer brand push, CMO Jeremy Nicholas says zero emissions coming for telco's tech, media, agency supply chain

By Brendan Coyne & Paul McIntyre
Tesltra's this is why campaign puts sustainability front and centre.

Telstra is walking the talk on sustainability and purpose. Ultimately, says CMO Jeremy Nicholas, that agenda will be driven through the marketing supply chain.

Telstra has made sustainability a key plank of its first brand campaign in five years – and it's pushing suppliers to cut their carbon emissions. CMO Jeremy Nicholas says these mandates will ultimately extend to agencies, media and tech providers, so "it's in their best interests" to decarbonise. Four of the five ad holding groups, and some publishers, are already mobilising. Others like Omnicom and TV networks are moving slowly. But as Australia's biggest brands plot similar strategies, everyone will have to follow.

What you need to know:

  • Australia’s biggest advertisers, including Commbank, IAG, Suncorp, Telstra, Westpac and Woolworths are committing to decarbonise their operations – and their supply chains.
  • Ultimately, that includes media owners, agencies and tech providers.
  • “It’s inevitable these targets will push through marketing supply chains,” said Telstra CMO Jeremy Nicholas.
  • Four of the five major advertising holding groups have pledged ‘net zero’ emissions by 2030. Omnicom, which owns Telstra's media agency OMD, has to date published far less substantial emissions reduction targets. 
  • While TV networks, which have huge carbon footprints, are less forthcoming, publishers including the Guardian (100 per cent by 2030) and News Corp (60 per cent) are also committed.
  • Others will have to follow – or lose business.

If media companies, agencies and technology vendors want to maximise their commercial opportunities, it’s in their best interests to [decarbonise] ... I certainly see that change coming.

Jeremy Nicholas, CMO, Telstra

Media agencies, publishers and tech providers could ultimately be cut out of pitches and negotiations with advertisers as an increasing number of Australia’s biggest brands set stringent decarbonisation goals – and apply them to third party suppliers.

Some publishers, and four of the five major advertising global holding groups, have already committed to renewable power and deep emissions cuts. Others will have to follow if they want to retain accounts and ad dollars.

Brands too, or they will ultimately find capital more expensive and consumers opting for competitors with demonstrable decarbonisation goals.

Who's listening?

Globally major brands are queuing up to commit to cut emissions. In Australia, alongside Telstra the likes of Commbank, IAG, Suncorp, Westpac and Woolworths have all set significant decarbonisation targets, which will have implications for their supply chains: When companies commit to reduce what are called 'scope 3 emissions' it includes all of their upstream and downstream emissions. That means they will run the rule over all of their suppliers, ultimately working with those with the smallest carbon footprints.

Some publishers and agency holding groups have grasped the nettle.

The other major holding group, Omnicom, which handles Telstra’s media account, is yet to go that far.

“We are currently establishing new goals and commitments to reduce the carbon emissions produced by our operations,” said CEO John Wren on last week’s quarterly earnings call.

While Omnicom has just hired a new Chief Environmental Sustainability Officer, who will likely oversee a sharpening of its targets, the group for now has committed to reducing energy consumption per employee by 20 per cent and sourcing 20 per cent of its electricity from renewable sources by 2023.

Telstra, one of Australia's largest energy users, is aiming for 100 per cent renewables by 2025 and to halve total emissions by 2030.

“We know businesses that have the scale we do have a responsibility to be good climate citizens, to have a strategy and to set an example for others,” said Nicholas.

Sustainability branding

Telstra is now bidding to drive home its good corporate citizen credentials – and showing customers that it is walking the talk.

Its new campaign, 'Australia is Why', created by The Monkeys (owner Accenture has committed to net zero emissions by 2025) marks the start of a major brand push centred on environmental and social governance (ESG).

“As the country’s biggest telco and a leader on climate action, a principal sponsor of sport and the arts and strong supporter of the communities we serve, we are committed to Australia and to building world-class infrastructure to keep us all connected,” stated Nicholas in launching the campaign, underlining its rollout of 5G and regional coverage, disaster relief packages, sponsorships and “significant progress on [meeting] our renewable energy targets”.

If the campaign lands, Telstra may yet overtake the likes of McDonald’s, Coles and Woolworths in the minds of Australians who often as not cannot name a single sustainable brand, according to OMD’s latest research – or fall for greenwash from the likes of BP, one of the world's largest emitters.

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Brendan Coyne & Paul McIntyre

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