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While digital advertising isn't nearly as big a polluter as other industries like manufacturing, big brands are looking for ways to reduce their carbon footprint anywhere they can.

Sustainability is quickly becoming a priority for corporations to court the next generation of consumers and avoid "greenwashing" backlash. Eighty-eight percent of Gen Z consumers surveyed said that they will decrease their spending with brands that don't meet sustainability requirements, according to data from Adobe.

Companies are now working with a new group of adtech startups that specialize in calculating carbon data and finding ways for advertisers to invest in more sustainable practices and campaigns.

Some of these startups, like Scope3 and Good-Loop, have gotten investment dollars in a tough fundraising environment by convincing investors about the long-term importance of sustainability in the digital ad industry. Others are not-for-profit initiatives spearheaded by trade organizations.

These firms are taking on challenges like reducing the carbon footprint of production shoots or replacing decades of adtech infrastructure that powers billions of spend across the open web. They promise not only to help marketers produce less greenhouse gases, they also claim to help digital ads load faster, cut down on ad fraud, and help premium publishers increase ad prices.

Not everyone in the industry fully buys into what these firms are selling, however, because advertisers can't verify the methodology behind the sustainability claims.

"There's a bit of sustainability Wild West going on with people making claims," said Ben Riley, general manager of adtech firm SeenThis. 

Insider identified six firms driving the push into sustainability for advertisers, using our own reporting and recommendations from experts in the industry.
 

AdGreen

Clients: More than 130 companies like Unilever, Adam&Eve, and Havas registered to use the tool when it launched in 2021.

Backing: A free calculator offered by UK trade group Advertising Association.

What it does: AdGreen's product calculates how much carbon emissions come from producing commercials.

Shooting commercials can have heavy environmental impacts. Unlike longer productions like TV and films that have more time to prepare for production shoots, "the commercial industry is an emitter of quick, fast, and easy," said Emily Plunkett Fleischer, US director of AdGreen.

Traveling to shoots creates the most carbon emissions, but wasted food and improper disposal of materials like lumber also add up, she said. Other practices that contribute to high carbon emissions include hotel accommodations, callbacks for talent, and buying props and clothes instead of renting them.

Advertisers and production companies input all information about a shoot into AdGreen's calculator, and the calculator spits out an estimate of how much carbon emission will be produced from the shoot.

"It's trying to change the lens that people are looking at with sustainability and production," Fleischer said.

AdGreen is currently not-for-profit and its calculator is free to use, but the firm recommends that advertisers and production companies donate an additional .25% of the cost of production to support the initiative.

Fleisher was named US director of AdGreen in May as the group expands from the UK to the US. She is also CEO of production consulting firm Maidstone.

 
Adlook

Clients: More than 50 clients including brands like CVS, Outback Steakhouse, and ad agency IPG Mediabrands.

Backing: Owned by adtech group RTB House.

What it does: Adlook recently rolled out in the US after operating in Europe and Latin America.

Ad buyers set up campaigns on Adlook's demand-side platform using a tool called Greenpath to determine the maximum amount of carbon emissions they want to use. Adlook's technology then analyzes which publishers' placements use the least amount of carbon data, said VP and head of US ad sales Patrick Gut.

Adlook makes money by charging advertisers a fee for using its tool.

The idea is to cut down on carbon emissions that are passed between adtech companies by directing campaigns to publishers that have legitimate traffic and lower-carbon ads that don't bog down website loading times.

"There's so many players in the space and a lot of clutter," Gut said. 

Adlook's technology can also use key words to identify sustainability-related content, then package and sell it to advertisers, Gut said.

Adlook says that its technology also cuts down on ads that run on made-for-advertising (MFA) sites — websites that are designed solely to display ads, with little regard for quality content or user experiences. These websites tend to have higher carbon footprints than other websites because they run a massive amount of ads.

Gut said that advertisers that use Adlook's Greenpath tool have reduced their total emissions by 40% and cut CPM prices — the cost to reach 1,000 people — by 18%. Those efficiencies come partly from Greenpath's ability to steer ads away from MFA sites. 

 
Good-Loop
 

Clients: More than 80 clients including adtech firms Brand Advance and Captify.

Backing: Raised $6 million in Series A funding in 2022, led by Questus Capital Management.

What it does: Seven-year-old startup Good-Loop's original product are digital video ad formats that use less carbon than other video ad formats because it uses less processing power. The ad format also encourages consumers to donate to charity.

Good-Loop has since expanded with measurement technology that calculates how much energy digital ads use. Good-Loop charges advertisers a fee for that service.

Good-Loop also sells tools that help advertisers reduce the energy used in digital supply chains by helping them make low-carbon creative, like static images and smaller file sizes. The startup also packages up publishers' inventory that uses less data, and therefore less carbon, and sells it to advertisers.

In one example, removing five to ten websites from a programmatic campaign reduces that campaign's carbon emissions by 20% to 25%, said Ryan Cochrane, chief operating officer at Good-Loop.

"Advertisers don't have to change that much — what you have to do is make tiny, incremental differences that make huge changes," he said.

Cochrane said that Good-Loop is also interested in expanding beyond sustainability into areas like diversity, equity, and inclusion where its tech could help advertisers vet the diversity of publishers and creative.

"Sustainability means a lot of different things," Cochrane said. "It means more than just carbon — it means funding equal-living content and funding high-quality climate journalism."

Good-Loop raised $6.1 million in Series A funding led by private equity and venture capital firm Questus Capital Management in 2022.

 
Scope3

Clients: More than 40 clients including the ad agency GroupM, Microsoft, and Vox Media.

Backing: Raised $20 million in seed funding in 2022 from investors including Rucker Park Capital and Venrock Partners.

What it does: Scope3 wants to help advertisers, publishers, and adtech firms measure the carbon footprint of digital ads, specifically focusing on "scope 3" emissions, which usually come from a company's partners in a supply chain.

Scope3 uses an open-sourced methodology to measure carbon emissions coming from programmatic, social, and audio ads and is working to provide similar measurement for digital out-of-home ads, cofounder and chief operating officer Anne Coghlan told Insider.

"There needs to be a complete understanding across all media buying of carbon emissions," she said.

Scope3, which uses companies' and academic research to determine how much carbon comes from a digital ad, calculates emissions by looking at the supply-side platforms, demand-side platforms, and ad servers that companies work with to determine how much carbon a company uses. The firm also pulls data from sustainability reports that are published by some adtech firms, like Criteo. 

Publishers and adtech firms use Scope3's data to lower the processing power and data they pass to other companies. The firm also bundles lower-carbon ad space and sells it to advertisers. And advertisers use the data to shift their budgets to legitimate publishers, and away from MFA publishers that are plugged into 100 to 200 vendors while most publishers plug into 10 to 15.

Coghlan said that there's a direct correlation between high-carbon ad inventory and low performance, meaning that it benefits advertisers to shift spend towards low-carbon inventory.

 
SeenThis

Clients: More than 1,200 clients including Molson Coors and Coca-Cola.

Backing: Privately owned with an undisclosed investment from Swedish private equity firm QNTM.

What it does: The Swedish firm SeenThis sells ad-serving technology that lowers the carbon footprint of digital ads.

While traditional ad servers have to download files to serve ads, SeenThis streams those ads, which uses less carbon, said company general manager Ben Riley. Ads only stream when they are in view on a screen, so publishers' web pages aren't cluttered with heavy ad files. 

"Our premise is that we're reducing data waste," Riley said.

Advertisers pay to use SeenThis, and publishers also pay to incorporate its tech into their own ad offerings. These publishers are usually larger, because small publishers don't have the in-house sales teams needed to pitch SeenThis, Riley said.

SeenThis also works with Scope3 to validate that its technology uses less carbon emissions.

Riley previously worked at adtech firms like OpenX, Magnite, and AOL.

 
Cedara

Clients: More than 4o clients like PepsiCo and healthcare company Sanofi.

Backing: Raised $2.7 million in 2022 from undisclosed angel investors and private equity.

What it does: Cedara wants to help companies track carbon emissions even beyond advertising.

The two year-old firm sells software that helps companies hit net-zero goals both with advertising and with broader climate initiatives like how their products are produced.

Cedara's platform collects carbon data from publishers, adtech firms, and agencies who use the company's products to track their sustainability efforts. This data includes how much office space companies have, employee travel, and office supplies used. Then, it models out the emissions created from campaigns and identifies ways for brands to offset carbon emissions. 

Cedara's ability to track all carbon emissions makes it unique, said CEO David Shaw, who cofounded the company with ad industry veteran Andrei Baragan.