Marketing Procurement

How can Marketing Procurement contribute to the ESG & Sustainability agenda?

Power to Influence

The responsibility (lies) squarely with marketing procurement as the “make it happen function” to cascade their businesses’ diversity goals and ambitions to their agency partners.

Despite the recent backlash towards greenwashing, addressing ESG (Environmental, Social and Governance) and sustainability considerations has never been more important for consumer brands. Getting it right is simply good business sense, as 57% of all consumers report greater loyalty towards brands that commit to addressing ESG, and this percentage rises considerably amongst younger consumers, (Deloitte Global Marketing Trends Report, 2022). On the other hand, missteps in this area can create significant brand damage, with any number of examples springing immediately to mind.

So, if getting it right can drive the topline, and getting it wrong (or simply ignoring it) is increasingly a risky strategy, what is our role as Marketing Procurement to help our organisations tackle ESG & sustainability?

ESG & sustainability were second only to the impact of GenAI in terms of share of agenda at ProcureCon Marketing Europe earlier this month (London, June 2024), with brands, agencies and industry bodies all hosting presentations, panel interviews, round tables and workshops. Topics covered were wide-ranging, including advertising accessibility, representation in the creative process, supplier diversity, supply chain sustainability, and modern slavery. But it wasn’t just a call to action that was shared: Procurement leaders from household brands like P&G, Diageo, Danone, L’Oreal, Barclays, Suntory, and Reckitt opened up on the challenges and opportunities they see, sharing practical approaches and roadmaps for their peers to take back to their own organisations.

Accessibility in advertising content

First on the agenda was accessibility in advertising content. ISBA’s Bobi Carley, Head of Media and Diversity & Inclusion Lead, noted that in the UK a combined 14 million people, amounting to 20% of the population, are hard of hearing or hard of sight. However, only 25% of UK adverts aired have subtitles, and just 1% are audio described. Reflect on those numbers for a moment. This means that over three-quarters of brand campaigns are not reaching one in five of their potential audience. At a global scale, the total is estimated to be 680 million people, projected to grow to 2.5 billion by 2050 as the population ages. And these numbers don’t consider other groups who rely on subtitles and audio description, such as the neurodivergent community who often experience auditory processing difficulties.

Given this level of social inequity and the spending power of the untapped market segment, Carley observed that accessible advertising “is just good, sensible media planning.” Amy Nicklin, Senior Brand Manager at P&G echoed this, stating “Nearly 100% of adults want clean clothes, nearly 100% want clean dishes, nearly 100% brush their teeth. It makes sense to aim to hit as close to 100% of the essential consumers as possible.” It’s a very high ROI investment, as enabling subtitling is a low-cost addition that can be made in post-production. Audio description can also be applied in post, although to be done well it requires a little more upfront planning to create space for the additional soundtrack.

If accessible advertising isn’t expensive, and the ROI is so high, why isn’t it already the norm? According to Carley, and co-presenter Oliver Forder, Managing Director at Extreme Reach, it’s primarily a lack of awareness. As a result, not all broadcasters are yet able to support accessible content, with more technical work needed behind the scenes. Varying regulatory requirements also play a role, from 100% accessibility requirement in Canada, to no applicable legislation in the UK and USA.

The outlook is hopeful. A slew of industry white papers, guidance documents, toolkits, and working groups have galvanized the change over the last 18 months, with ISBA driving forward the change. Examples of good practice include Diageo’s recent audio-described campaign for Bailey’s, showcased by Isabel Massey, Global Head of Media, Content & Connections Planning, which used audio description to bring the core brand values of indulgence and sensuousness to life. The role of marketing procurement here is relatively simple too: find out if your brand’s ads are accessible, connect your marketing teams with ISBA’s resources, talk to your agencies, and include accessibility in your briefing templates.

Representation in advertising is a closely related topic. WFA’s Alice Tomlinson, Manager Global Marketing Sourcing, and Reckitt’s Efrain Ayala, Global Director for DEIB and Creative Effectiveness, covered the need to include diverse voices in the creative process to create inclusive and effective content. As Tomlinson says, “if there’s not diversity of thought that is happening within the creation of the work, it affects the work.” When brands get this wrong, the impact on the topline can be significant, as several recent campaigns have illustrated all too well. The research backs this up, with 64% of consumers agree with the statement “I am more likely to purchase an item from a brand willing to take a stance on social issues and conflicts,” (AmazonAds study, 2023), and 75% of consumers feel that the portrayal of genders in advertising is disconnected from reality, (Kantar,2019).

How procurement can drive diversity in creative and production

Tomlinson and Ayala placed the responsibility squarely with marketing procurement as the “make it happen function” to cascade their businesses’ diversity goals and ambitions to their agency partners. Ensuring that diversely-owned suppliers and creatives with lived experience are included throughout the production process is the first step. Ayala reports that Reckitt goes beyond this, linking KPIs measuring diversity of talent to agency remuneration models. Including guidelines for handling diverse talent set within contract T&Cs is another measure that Reckitt, and other leading brands, are now taking. A recent Vanish campaign featured an autistic actor and her family and was filmed on a set built to represent their family home, illustrating how far Reckitt is going to walk the talk here.

“Walking the talk” was the title of the session from Intel’s supplier diversity veteran Deaneesha Govender, Global Strategic Sourcing Manager. Govender described Intel’s early struggle to get good data on diverse spend as long ago as 2012, and shared the difficulties of capturing tier 2 diverse spend. In the USA where there are government-mandated diversity targets tier 2 spend capture is a particularly acute issue, as an organisation’s suppliers’ external diverse spend is counted towards it’s targets.

Intel’s supplier diversity program received a very public shot in the arm in 2015, when the then-CEO announced a target of $1bn diverse spend by 2020 at CES in Las Vegas. This was the catalyst for senior leadership support to embed diversity & inclusion across all supply chain policies, and the $1bn threshold was reached in 2019. Intel subsequently grew this to $2bn by 2022, in part due to much better capture of tier 2 spends.

Govender attributes Intel’s success here to several factors throughout the end-to-end supply chain. Intel invested in automated tooling to accurately identify existing diverse suppliers and gain visibility into tier 2 spends. Search functionality embedded in e-procurement tools now allows category managers to find diverse suppliers in their spend areas for inclusion in upcoming RFX events. Not including diverse participants in RFX events requires VP approval, pointing to another critical success factor, that of senior leadership sponsorship. Building KPIs into supplier selection criteria, with a weighting of 10% of the scorecard, has contributed significantly to increasing diverse spend. And finally, linking company-wide performance-based-pay to diverse spend targets has created very high visibility, and a global network of diversity champions.

Embedding sustainability in the procurement process

Sustainability in the end-to-end procurement process was a recurrent theme. Kevin Freedman, Founder & CEO of Freedman International, hosted a round table discussing the concept of ‘muda’ or waste in international marketing processes. Muda is a concept from the Japanese automotive industry and refers to any activity that doesn’t add value to the business. Through this lens, the wastage in global campaigns can be rework, duplication, lost time and diluted brand message. Brands cited common challenges of low uptake of centrally-produced materials, organisational siloes, and lack of communication between teams as drivers of muda in their own organisations.

End-to-end sustainability was also covered in a wide-ranging panel session chaired by Tina Fegent of Tina Fegent Consulting, and featuring speakers from Danone, Suntory, Barclays, and Conscious Advertising Network. The first issue discussed was how to know which suppliers are, indeed, walking the talk. Izzy Safdar, Head of Corporate Real Estate Services, Banking Operations and Marketing Procurement at Barclays raised the issue that whilst requests for NetZero 2030 policies abound in RFX questionnaires, this tick box exercise reveals little beyond good intent. She advocated for asking potential partners to articulate their sustainability milestones and roadmaps, and to assigning appropriate sustainability weighting in assessment criteria – though all panel members agreed that reaching Intel’s 10% of total score was a tough sell internally.

The challenge of developing a sustainability baseline was raised by Louise Deane, Marketing Procurement Category Manager at Suntory, who highlighted that sustainability policy is most mature in direct materials like packaging, raw materials and ingredients, where quantifying and addressing carbon emissions is well underway. The sustainability impact of marketing spend is harder to quantify, although more commoditized spends such as POS materials are a natural starting point to quantify, set sustainability targets and measure progress.

Reaching clarity on the DE&I impact of marketing spends is also challenging, but it is critical, as Jake Dubbins, Co-Founder of the Conscious Advertising Network underscored, saying of the industry’s $1trn+ of media supply chain spend, “we are funding the great stuff, but we are also funding, you know, racism. We are funding white supremacy. We are funding climate denial.” For Dubbins, collaboration across all partners is the key, including brands, supplier partners, UN agencies, and industry bodies, to bring as many perspectives to bear as possible, “… the importance of partnership…bringing the outside in, into marketing procurement and into marketing departments, I think is vital.”

In the panel’s view, procurement has a leadership role to play here to take the conversation on sustainability and DE&I issues to our marketing partners and our suppliers. They identified concrete first steps of establishing baseline data with existing providers through questionnaires and surveys, requiring more transparency from potential partners during RFX processes, and embedding sustainability and DE&I policies within contracts, as Celine Chauffeton, Global Category Sourcing Director for Topline, and colleagues are doing at Danone. And as Deane remarked, it’s important for brands to also have their own houses in order, before approaching suppliers asking for the same.

Finally, Jade Wigmore, Marketing Category Manager at Rank Group, and Caroline Ghost, Senior Sourcing Business Partner at the Atomic Weapons Establishment, shared their insights on tackling modern slavery. This is an issue that affected 50 million people globally in 2021 and is growing rapidly. As Ghost articulated, the first challenge here is that although modern slavery is present in every society, and impacts a diverse range of spend categories, it is still perceived as only impacting far-shore operations. Ghost and Wigmore highlighted merchandise and uniforms, timber operations providing board for POS materials, and cleaning agency services for retail frontage as particularly high risk spend areas.

Therefore, gaining an understanding of the risk is the first step for Marketing Procurement, and both presenters advocated bringing in external third parties to assist with this.

Reflecting on all these discussions, a few themes emerge. The issues at play are complex, interconnected and global. Addressing them may seem daunting, but it is both the right thing and the smart thing to. Doing it well can drive business growth, and not taking action, or doing it badly, are risks in and of themselves. The most proactive brands are already working collaboratively across the industry, with peers, suppliers, industry bodies and NGOs, rather than waiting for legislation (or consumer backlash) to drive them into action. And marketing procurement has a pivotal role to play, regardless of an organization’s current level of maturity.

We can begin with the early steps of asking the tough questions internally and externally, identifying our risks, and seeking senior leaders to act as our sponsors. We can connect our procurement and marketing colleagues to existing networks making change in this space, and share examples of best practices and industry guidelines. We can champion ESG inside and outside of our organisations by including it in our selection criteria, building it into our contract terms, and linking it to supplier remuneration and employee compensation models. And we can progress to embedding diversity, sustainability and other ESG issues into how we design our category strategies, sourcing policies, and end-to-end procurement processes.

About the author

Helen Thompson is a regular contributor to Marketing Procurement iQ. She spent 18 years in marketing procurement roles in pharma, life sciences and consulting, in the UK, Switzerland and the USA. Helen founded her own independent consulting practice in 2022, and now works on strategic change projects with major brands, agencies and production companies.