2.2 Define the business case

Focus on the commercials

If you or your colleagues aren’t already convinced by the scientific and ethical argument for sustainability, then perhaps you never will be. Fortunately, for those that have bought into the scientific and ethical argument for action, the commercial case for sustainability is clear and strong.

The exact details of a business case for sustainability will vary for each agency. Investing time in developing a credible commercial business case for your organisation will give you the foundation to have conversations with board members, shareholders and investors, in order to prioritise sustainability and free up resources to make the investments and changes needed to achieve your sustainability targets.

How to structure the business case

Your business case should cover both the value creation opportunity and the cost savings you can make. The key components to build your business case are outlined below. We would suggest focusing on the strongest three or four components for your agency and putting financial figures to them. These might be cost savings, financial penalty avoidance (including additional taxes) and potential revenue loss/gain.

Supplement the financial figures with other commercial benefits such as how attracting top talent increases the creativity and quality of your outputs as an agency.

The details of your business case will be influenced by the size of your organisation, operational model, client focus and current client base. We encourage you to use templates and processes that already exist within your agency so you can present your business case as any other investment.

Recommendation

You can use proxies or figures from within your organisation to extrapolate and calculate the business case.

Let’s look at three very different examples:

• Client retention. Identify how many of your clients have strong sustainability targets. You can be reasonably certain that the marketing and procurement teams you’re dealing with will soon have their own sustainability KPIs as targets get pushed to all levels of their If you can’t help your clients to hit their KPIs, then you’ll be at risk of losing their business. Calculate the last three years of revenue for those clients and flag the potential future loss of revenue for the agency.
• Operational efficiency. Review the energy bills for your organisation. Calculate what a 15% reduction in energy consumption would mean in terms of cost savings for your business. (15% is a reasonable target for organisations to aim for – see step 3 Take action.)
• Favourable financing terms. If your agency is looking to take on debt financing, then the figures of 5–25 basis points [source: ESG lending momentum is building for the mid market, Grant Thornton] saving on the base rate of interest for sustainability linked loans could be significant. Calculate the interest on the loan size you are looking for and deduct 15% of the interest over the term to reveal the figure you could save by having strong sustainability credentials.

Business case components

Please note: the Opportunity/Risk column indicates whether the component is viewed as a Risk or an Opportunity. The category column shows at what stage in your sustainability journey you’re likely to mitigate the risk or benefit from the opportunity. Note: There’s likely to be some crossover.

For an advertising agency, sustainability is a strategic imperative that offers multiple benefits. It enhances operational efficiency, attracts eco-conscious clients, manages risks, boosts the agency's reputation and fosters employee engagement. By embedding sustainability into its core strategy, an advertising agency can achieve long-term growth, innovation and a competitive edge in the marketplace.

Suggested resources

Resources to kick-start your research to build your commercial business case:

• Carbon Policy Tracker - discover carbon and sustainability-relevant policy, legislations and standards that apply to your business, including taxes and punitive fines for non-compliance (UK and EU focused).
• Carrots and Sticks- a freely available database of mandatory and voluntary policies that shape the ESG impact of businesses.
• Crown Commercial Services – Social Value – if you’re hoping to bid for public sector contracts, then you need to be aware of the Social Value Act and Procurement.
• 2024 Gen Z and Millennial Survey | Deloitte Global - the 13th edition ofDeloitte’s Gen Z and Millennial Survey connected with nearly 23,000 respondents across 44 countries to track their experiences and expectations at work and in the world more broadly.
• Sustainable finance: funding options for eco-friendly small businesses – favourable rates and government grants for companies that show a commitment to sustainability.
• ESG lending momentum is building for the mid market – a survey of over 40 UK- based lenders to understand their ESG lending to mid-market firms.
• Net Zero Economy Index - overview of the sustainability commitments of companies in the FTSE 100, produced by PwC.
• Corporate Climate Responsibility Monitor 2024 – analyses the climate strategies of 51 major global companies, critically assessing the extent to which they demonstrate corporate climate leadership.
• SBTi Dashboard – details of the science-based net zero commitments of over 8k companies.