IPA urges agencies to demonstrate ESG values for competitive edge
Demonstrating Environmental, Social and Governance (ESG) values and actions to brands could give agencies a marginal gain over their competitors, IPA president Julian Douglas will tell attendees to the IPA Business Growth Conference today.
The rallying call follows IPA-commissioned research, which reveals one in five marketing and communications leaders in the financial services, FMCG and food and drink sectors hardly value the importance of ESG. Meanwhile, more than four in five (84%) of these marketers believing it will become increasingly important in day-to-day practices.
According to Douglas, this presents an opportunity for agencies to "walk the talk" when it comes to demonstrating their commitment to their brands' and their own ESG credentials.
“Brands look to us for effective, creative solutions coupled with great chemistry as our fundamental offering but increasingly we need to have all this coupled with a leading advantage in the field of ESG to have that vital competitive edge,” he said.
The research, carried out by Opinium, shows that brands currently prioritise core hygiene factors over ESG credentials.
When asked about the factors they consider when hiring an agency for any given campaign, brands prioritised the following:
- demonstrating effectiveness (15.3%);
- offering creative solutions (15.3%);
- providing relevant services (14.9%) and experience (14.2%) and strong chemistry (14.1%);
- sharing the same values as the brand (7.9%);
- an industry-wide reputation (6.7%);
- similar brands in portfolio (4.6%);
- offers a competitive price (3.2%);
- shown proof of commitment to ESG values-based initiatives (2.1%);
- has famous/award-winning ideas (0.9%);
- it is a global brand (0.8%).
For optimal future success, the report advises agencies to get under the skin of the brand to provide value-added content and to make ESG part of the conversation and demonstrate its relevance.
Fredrik Kinge, global CEO of media auditor and pitch consultant ECI Media Management, agrees. He told Mediatel News: "We are witnessing a trend towards more focus on ESG requirements. However, not so much as a specific KPI in pitch processes yet.
"It's currently rather more a hygiene factor included in agreements but having said that, cultural fit and people are always evaluated as a key KPI in pitches."
Marc Nohr, IPA Commercial Leadership Group chair and group CEO of agencies at Miroma, said: “ESG is not just an issue for agencies, it’s an issue for businesses, governments and society. A moral imperative is becoming a commercial necessity and the agencies that put this at the heart of their strategy for growth will be well positioned in the future.
"But we must do more than pay lip service to it. And that will mean asking ourselves some tough questions about where our responsibility to society and the planet begins and ends."