Carbon Measurement, Compensation & Scope3

So my name is Harvin Gupta, and I head up commercial partnerships at Scope3.

Scope3 is the name another one of these companies, this time based in the UK

We've got people in London, we've got people in the States, and we've got people in Australia.

Now Scope3 as a term you may remember from back in episode 2 refers to the measurement of carbon emissions produced indirectly, such as those all along your supply chain.

And this week Ara got to catch up with Harvin and get his insight on the issues at hand, and what breakthroughs Scope3, the company, is currently going through.

But first a bit of background on Harvin himself.

My background has always been ad tech. So I guess i started my career…

So Harvin evolved through different areas of the industry from publishing, to programming ads, running the solutions engineering team, and all in all getting familiar with how all the complicated little parts of the ad-tech supply chain and industry, all fit together.

And now I'm going to Scope3, where we're really concentrating on sustainability and trying to decarbonize just actually rapidly decarbonize the media and advertising industry.

For me, one of the things that I really think about is thinking about carbon emissions when we make decisions. So whenever we make a business decision in our industry, we always think about things like how much is this going to cost? How much staff are they going to need for this? How much products and engineering resources they're going to need? What's the legal implications? But up until now, I don't think we've ever stopped to think, what impact will this have on my carbon footprint.

It doesn't really matter where you sit in the ecosystem, I think we need to move to a world where carbon is very much factored into our decision-making process. And we make decisions that result in us reducing our carbon footprint in a very deliberate way.

Making this kind of measurement mainstream and transparent, is a first important step that is likely to directly impact consumer behavior. Like when food producers were forced to start labeling the nutritional information on their products for example. 

In that case, according to the American Journal of Preventive Medicine, because of this more transparent labeling, consumers actually reduced their purchase of calories and fats found in supermarket foods by around 6 and 10 percent respectively. It all starts with allowing people to make more informed decisions about the products and services they use in their personal and professional lives.

But what about Green Media specifically? And why is it different from other industries?

Every industry in the world today, is thinking about how they're going to decarbonize. And they're looking at their supply chains. They're looking at their businesses, and they're looking for opportunities to bring down their carbon footprint.

So imagine you're in construction, or you're you're building cars, something like that. optimising your supply chain, to bring down the amount of carbon, it's really hard. It's it's hard to change real world supply chains. 

In our industry, it's not, it's actually quite easy. We've got a lot of infrastructure and data, we're really good at being able to move money around, we're really good at being able to optimise supply chains. And in fact, supply path optimization has been a concept that's been around for many years.

There's a real opportunity within our industry, to rapidly decarbonize to become maybe the first industry the first large scale global industry to say, we've done the work of decarbonizing our industry, we've brought our carbon emissions down to be as low as possible.

And that's where the idea of green media products comes in. There's there's two things at play here. The first thing for me, green media products is it's about shifting spend. So it's about an advertiser being very deliberate about where they invest their ad dollars. And by that I mean, looking at the data, and shifting spend away From high carbon supply sources, and onto low carbon supply sources, so the first thing to say is a green media product is a way for an advertiser to move their money away from high to low carbon. And they need to do that because they need to hit their climate pledges.

As of mid last year, ⅓ of the world's largest publicly traded companies have implemented a net zero target. Often by as soon as 2030.

And that's not far, that's, you know, there's, there's really, we're running out of time now to hit that deadline. So that's what's driving this. And so firstly, what green media products is, it's a way for advertisers to work towards hitting those goals in the advertising part of their business.

Ok so the first phase in the Green Media movement is setting the targets, moving the goal posts and beginning to shift spend from high carbon to low carbon. Goals are all well and good but the next step is to actually figure out how to actually reach them. So the next steps are measurement, and a layer of carbon-compensation.

So here, what happens is, we can use the scope three emissions model to understand the carbon emissions of an ad campaign. And then the seller can choose for that ad campaign to be a compensated green media product. So here we use the scope three data to measure the carbon emissions, and then we ask the seller to contribute $100 per metric tonne of carbon that that campaign emitted, we then invest that money into really high quality carbon compensation projects that remove the amount of carbon that was emitted from the atmosphere. So we're investing in things like biochar, which locks away carbon for hundreds of years. 

In that way, the advertiser can see in their reporting, that that campaign was certified carbon neutral, but the carbon that was emitted from that campaign has been removed from the atmosphere. And that's really exciting, because it's a way for us to actually compensate for the carbon that was emitted. But another reason when it's a really powerful idea is we make carbon expensive, and $100 per metric tonne, we're saying if you're going to be emitting carbon, that's going to be expensive for you. So what we're doing is we're changing the dynamics of the industry, we're trying to make structural changes here. 

Because if we can make it that emitting carbon is expensive, then it makes sense for a seller to say, well, I need to stop emitting carbon as much as I can, to reduce the amount of money it's costing me to compensate that carbon. So we'd much rather the carbon is not emitted in the first place. And by making carbon expensive, we can change the business dynamics to make it good business sense, rational business to reduce the amount of carbon you emit in the first place. So those are the two key concepts behind the immediate products.

So as we have mentioned in the past, and as I am sure our switched on listeners already have a feel for, the world of carbon-offsets or carbon compensation is still a bit on the murky side. There are unfortunately but somewhat predictably people and organisations that take advantage of loopholes, or the fact the regulation is still somewhat new, in order to say they are reducing their carbon emissions, where in reality, its just on paper. More on this next episode.

On the other hand, we do have to start somewhere.

Not all offsets and not all carbon compensation projects are created equal. So you're absolutely right. Like there's some projects that exist that are preventative. So they're looking after forests or rainforests that already exist. They've already been planted, and they're trying Look at a forecast what would happen if we protect this forest in the next 20 years? What's the carbon saving versus that forest being chopped down? I don't necessarily believe in those types of projects.

I'm much more excited about high tech projects. So where we can use technology to actually remove carbon from the atmosphere and lock it away. And a good example of that is what I mentioned before, which is biochar. So I find biochar fascinating because it's a real for me a real breakthrough technology. 

It basically allows you to remove carbon from the air and lock it away into this material. And once it's locked away, it stays locked away for two or three hundred years. And then a nice side effect of this is that farmers can actually use this biochar material to help grow their crops. So it has a double benefit, firstly, you know, being environmentally friendly, and it's locking carbon way. And secondly, it's helpful for farmers, it helps them increase the yield from their, from their crops. Those are the types of projects that I'm much more interested in funding. 

And I think we should try and use the money generated from Green media products to go towards those types of projects. And scope three we use, we have a partnership with a company called carbon direct. And the reason why we chose to work with carbon direct is there are a very good mix of finance people who can manage a complex portfolio of carbon compensation projects, but also scientists and PhDs, who deeply care about the environment and deeply care about finding the right projects to invest in to make sure that we're getting value for money. And to make sure that what we're not doing is just ticking boxes to say, 

Yeah, I've done my bit of paid my I paid my money, I've checked the box, I'm done, but actually doing things that are going to have long term systemic impact on the amount of carbon that's in our atmosphere.

So I think that's a really important thing is that as an industry, we can all coalesce around a set of standards around what we measure how we measure and how we talk about carbon and decarbonisation. So that's one of the key things that we're working on at the moment.

And companies like Scope3 are starting to see success some really successful campaigns.

We're absolutely seeing that across the board. So one of the things that we really saw towards the end of last year was the way spend dramatically increased against green media products. I was looking at the spend graph, and it's like a hockey stick, you know, you get a little a slow start, which I think when we started talking, were shown here is, and then just a huge vertical acceleration. 

We're seeing all across the industry, different types of advertisers, whether they're in retail, whether they're in auto, whether they're, you know, tech, it doesn't really matter. We're seeing brands really super invested into buying green media products, and actually actively reducing their carbon footprint. 

So I think that's something I'm really excited about. It's validating the scope three message, and it's really showing what's possible. We also had a lot of really, like, I think we're starting to become an important part of the industry. We're working with so many of the big platforms, we're working with so many of the agencies powering things like carbon calculators, carbon planning tools to fund to help measure that decarbonisation.

As with any new industry and especially one where there is a sudden and dramatic shift with a lot of money and risk on the table, there are growing pains. But with the general increase in education and regulation around the topic, as well as carbon intelligence companies like Scope3, things are beginning to look quite hopeful.

So I can see a world quite quickly where all of our brands budget is spent on green media. Because the way we think about the world is if you're a brand that needs to hit your climate pledge, if you said, we're going to be net zero by 2030. That means you need to look at your supply chain. 

And you need to bring the carbon in your supply chain to as close to zero as possible. So what we expect is year on year on year, brands will increase the percentage of the amount of budget that they allocate towards green media. And I can actually, very quickly see a world where all spend is on green media. Because if that's not the case, then the brands are going to be asked, well, Han, what about these commitments you made? 

What about the pledge that you made there? That's so important because brands and the advertisers are under scrutiny from all corners. If you're a brand, then your consumers expect you to be doing the right thing by the end environment, regulators are starting to pay attention to this space in a big way. They're expecting brands to be decarbonizing. Importantly, the staff that work for the brands, people want to feel good about the companies that they work for, they want to feel like the company they work for is doing the right thing by the environment. 

So brands are under a lot of pressure to do the work to decarbonize. And actually, like I said, where it's very tangible, it's very, it's like, very possible for them to see very quick results is through their digital advertising supply chains. So actually, I think this move towards, you know, green media products being everywhere. Green media products, being how a brand buys media, is something that should become ubiquitous in a very short amount of time.

So I think that would be my advice to brands and agencies is to really make use of the fact that for the first time, we now have this reporting available. So you've got the tools and the data that you need to actually start to action, decarbonisation in a very real way.

Thank you to Harvin Gupta from Scope3 for giving us his insight today. We are currently working with Scope3 ourselves to help our clients reduce their own carbon footprint all along their supply chain. When all the measurement is done we will then be able to discuss with our partners where to avoid, reduce and compensate to do our part in decarbonizing the industry.

It's a really fascinating exercise to really dig into all these little areas where improvements can be made and really, add up to quite a lot

Hmmm There might be a show in that.