Industry Analysis: Sustainability
Posted on Sep 25, 2024 by Samara Husbands
What is the state of sustainability for M&E?
Sustainability is, ironically, a hot topic in media and entertainment. The Flint’s Neal Romanek digs deeper into where the actual progress – if any – is taking shape
Words by Neal Romanek, editorial director, The Flint
Scientists have been shocked – once again – by how quickly human- produced climate change is accelerating. In January of this year, global warming had exceeded 1.5°C over pre-industrial temperatures for a full year for the first time. The 2015 Paris Climate Agreement was a declaration by the world’s governments that they would pursue efforts to limit warming to 1.5°C and keep the temperature ‘well below’.
Those temperature goals are meant to reflect long-term averages – a single year of 1.5°C doesn’t mean that next year won’t be cooler – but temperature rises are happening faster than most climate models predicted. And fossil fuel use – the principle contributor to planetary warming – is increasing year-on-year, when it needs to drop precipitously over the next decade.
Sustainability is a wide net that encompasses the entire range of practices aiming to future-proof global civilisation against shocks, envisaging new and better ways of working and living that produce the maximum possible benefit to global society. While the term is vague enough to, at times, almost lose meaning, sustainability is being taken seriously by any business looking to thrive in the years ahead. Rapidly incorporating drastic sustainability practices – leading with full decarbonisation – is essential for reducing shocks on the way, and it’s a sane business pathway.
Reassessing priorities
The media industry’s interest in sustainability practices has been, in fits and starts, growing over the past few years, with various organisations taking the lead in certain specific areas. Bafta Albert’s focus has been primarily on production, particularly with UK broadcasters; Greening of Streaming works on sustainability in video delivery; and Music Declares Emergency has been bringing the music industry together, including artists, labels and the concert sector.
“It seems like everyone has this as a topic of discussion, whether its internal, with their customer base or with industry experts,” says Derek Powell, former director at global telecommunications, media and tech consulting firm Altman Solon. “That’s a good sign. It’s very much what we have seen in the past with things like content security or privacy issues. I think once the industry gets its arms around this, then it will be able to work together and come up with some really good solutions.”
In its own research, Altman Solon spotted the sustainability trend as a result of a regular annual assessment it had been doing of the media industry’s priorities. The firm surveyed the media-technology sector to see what topics and industry challenges it should be focusing on most. In the second year of the survey, it included questions on diversity and inclusion to see what processes media companies were developing, if any. Were they creating steering committees? Were there new DEI-specific roles? How did diversity and inclusion affect retention and recruitment?
Most of the questions in the first and second years were focused on technology – virtual production and AI being two of the main topics. But in its conversations, it asked high-level technologists who had their fingers on the pulse of the industry what other topics it should include in next year’s survey. Sustainability came up repeatedly, with the additional information that broadcasters were especially struggling with it.
The company’s first instinct was that sustainability was more about ESG policies than the tech innovation insights Altman Solon was looking for.
“But then we started thinking about it,” Powell recalls. “The IT industry isn’t necessarily known for being super environmentally friendly, and it brings up the question: what are they going to do about it? We started educating ourselves around some of the other trends and influences around sustainability and we saw, with the impeding legislation in multiple places, that we needed to get on this bandwagon, so we added ten or 12 questions to the next survey.”
The questions had a deliberately wide focus to try capturing media- industry sustainability thinking from multiple angles.
“If we were either too niche or too focused in our questions, we thought we might miss out on other areas of the ecosystem that may be making some significant progress on this. We wanted to be able to provide some visibility end-to-end.”
The snapshot provided by the round of sustainability questioning showed that it was appearing in many guises at a variety of levels. Some were grassroots, employee-led initiatives – around, for example, recycling. Other initiatives started in companies’ procurement departments. But the common thread was that to get sustainability to work across a business requires participation by its leadership team.
Strategising sustainably
One of the central questions businesses – and individuals – have around sustainability is where to put the most focus. Recycling is an easy activity to get behind, but as far as lowering carbon emissions – which is the highest priority now globally – it has low impact.
A focus on efficiency and reducing energy consumption inside the business has been a widely adopted pathway toward sustainability. Just about everything we do today incorporates cloud in some degree. There is growing focus on the power consumption of data centres, which is ballooning, especially as AI starts getting incorporated into more tools. Computer power isn’t the only thing consuming energy – keeping thousands of servers cool 24/7 also has a huge CO2 footprint. Water use is enormous in data centres as well. In 2021, Google’s data centres consumed around 4.3 billion gallons of water.
The second big issue is measurement. How do you keep track of your sustainability progress? What benchmarks should you be using to determine success? There has been an explosion of accreditation, ratings and tracking systems over the past few years, of varying quality. These rarely use the same methodologies and almost none are interoperable with each other. Starting a sustainability programme is already daunting for some, but having to choose which methodology to employ and decide which accreditations to buy into is doubly intimidating.
Finally, sustainability is no longer some arcane procurement practice that you can occasionally mention in reports to the stakeholders. It’s something that is going to affect multiple parts of your business. So companies have to be able to convey their sustainability stories, not just to their customers but to their own teams – a challenge when they don’t always know themselves what that story is.
Powell continues: “When people hear about sustainability inside their own business, the first thing they think is; ‘here’s another layer of bureaucracy and data collection I’ve got to do.’ I think that’s short-sighted and it’s not what the business is trying to achieve. Instead, the goal should be ‘sustainability excellence’. It’s an opportunity to look at a process and start thinking about how to insert and integrate sustainable practices that are going to help me get the output I need – as well as scale.
“And it’s not just taking apart what you do and putting it back together. There must be adjacent sectors that have already solved some of these problems, and we can learn from them. Instead of trying to recreate the wheel or learn by trial and error, there are opportunities where we can learn from other industry groups.”
Fields like medical and security are collecting and managing large amounts of data in very complex ways, often with high-resolution image or video components. Companies that work with sustainability in infrastructure are having to deal with scale and complexity that dwarf the problems facing the media industry. Powell thinks it’s essential for the media industry to start outreach and collaboration with specialists outside what is traditionally an insular industry.
Europe in the lead
Altman Solon’s survey confirmed that Europe is leading the way in sustainability action. Though few would seriously suggest that any region is doing enough to head off the environmental crisis, Europe has been the first to give regulatory teeth to sustainability practices. Even Europe’s GDPR privacy standard, introduced in 2016, was a sustainability initiative in that it was aimed at regulating the use of tech to further human wellbeing.
The new CSRD (Corporate Sustainability Reporting Directive) regulation requires all large and listed companies (except listed micro-enterprises) to disclose the impact of their activities on people and the environment, and will have ripple effects beyond Europe. Brexit – as it was intended to do – saves UK companies from having to comply with regulations like CSRD. However, with the EU being the UK’s biggest trading partner, the legislation will have an effect on any UK company that wants to do business with Europe.
The US, where corporations have had much more influence over the legislative process, has a much slower rate of adoption around sustainability. A report from the IEA (International Energy Agency) estimated that the European media industry was about five years ahead of the US industry in adoption of sustainable practices.
But there is still movement; California, which is one of the world’s biggest media hubs, has a far better record than the US as a whole. The Inflation Reduction Act, passed by President Biden’s administration, is a groundbreaking piece of legislation that incentivises investment in low-carbon energy.
“In Europe, the market is a lot more fragmented, so you have more small- and medium-sized companies who can move very quickly and provide the right support to meet compliance requirements,” notes Powell. “In the US, you have a lot of bigger companies where there’s inertia, as well as planning and resource constraints. It’s like moving the Titanic. They are willing to move – it’s just a bit slower.
“Even though we saw some pushback around Scope 3 reporting in the US business community, as well as some legislation being delayed, we still saw companies already making investments. I think that was due to a lot of advocacy at the grassroots level, with a lot of experts advising media companies that this is not an optional exercise. The more they can invest now, the better off they’ll be when the actual compliance rules come down, rather than saying ‘I’m not going to do anything until a law is passed’ and then suddenly you’ve got some huge cash outlays.”
But sustainability, ultimately, is about people and their wellbeing. Altman Solon’s series of industry surveys kicked off with DEI – diversity, equity and inclusion. How have DEI practices developed alongside – or diverged from – sustainability?
Diversity vs sustainability
In the wake of the killing of George Floyd and other high-profile crimes against minority communities, US public anger pushed equality to the front of the conversation. Governments and businesses have since responded with a variety of initiatives to address imbalances in the treatment of their workers and stakeholders.
“But the difference between diversity and sustainability is that sustainability is rooted in regulatory and legal frameworks. Diversity, on the other hand, is not at that level. There isn’t a legal regulatory requirement that says ‘you must be diverse.’ We’re seeing that a bit with board members but, when it comes to the other levels of the company, there’s no mandate for that, and you can’t put a dollar amount to it. A number of studies have shown that, from behind the camera to in front of the camera, it does help our industry – but it’s not a statutory issue.”
Powell points to the rise and fall of diversity officers across US businesses, calling it a ‘mess’. Appointments were made as a reaction to a need, although without having a clear plan or mandate in place. It is an object lesson for sustainability in business, too, with a vague term like sustainability being able to take in so much that it can quickly lose direction – and effectiveness.
One lesson that’s been learnt from Altman Solon’s investigations is that legislation gets results – and quickly. Many sustainability conversations talk about the importance of having an ‘enlightened CEO’ or team leadership which has a sustainability mindset. However, relying on the personality types of the revolving-door C-suite seems like a dangerous and unstable way to deal with a significant threat to public safety. Legislation means the C-suite is on board, regardless of personal feelings.
One of the biggest complaints one hears from sustainability teams is the lack of budget – and therefore power – given to said sustainability teams. Even in the best circumstances – involving ‘enlightened CEOs’ – sustainability is essentially treated like a charity. Solid, intelligently written legislation can change that with a pen stroke, something supported by Powell’s own conversations.
“In talking with several C-level people, even in an environment of constrained spending, if it has to do with legal and regulatory compliance, they will find the money.”
This feature was first published in the Autumn 2024 issue of FEED.
