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Sector Reports - 14/02/2019

Amidst the #MeToo movement & ongoing digital transformation of the media industry, how do Broadcasting & Advertising companies perform on ESG?

Despite weak overall sustainability commitments and climate scores, some European companies are beginning to embrace renewables.

This new report analysing 94 companies from the Broadcasting & Advertising Sector presents Vigeo Eiris’ exclusive opinion on sector vulnerabilities, controversies and emerging risks, as well as strengths, innovations and CSR best practice. The report highlights sector ESG challenges and emerging issues, providing performance scores and advanced indicators on critical issues such as business ethics, human rights (including discrimination), human capital, governance, executive remuneration, the level of sustainable products & services, and contribution to the UN Sustainable Development Goals.

Key Findings:

  • The Broadcasting & Advertising sector is composed of 94 companies, headquartered in 23 countries, that operate as Broadcasters and/or Advertisers, Outdoor Advertisers and Satellite Operators.
  • Broadcasting & Advertising companies generally display a weak performance towards sustainability commitments and related risk management. Vigeo Eiris awarded an average overall score of 29.4 to companies in this sector, on a scale of 0 to 100.
  • The sector’s performance has increased by 1 point since our 2016 analysis, resulting in an improved sector ranking from 29th in 2016 to 24th in 2018, out of Vigeo Eiris’ 39 sectors.
  • The sector’s top 5 performers (TF1, Vivendi, JCDecaux, Publicis Groupe and WPP) are concentrated in Europe, whilst laggards are mostly located in the Asia Pacific region.
  • The sector’s reporting rate stands at 52%, slightly below the universe average (55%), with European companies showing a higher level of accountability on ESG issues (71%), followed by Emerging Markets (52%), North America (46%) and Asia-Pacific companies (39%).
  • ESG risk mitigation scores are limited in relation to Legal Security (32/100) and Reputation (33/100), and weak in relation to Operational Efficiency (28/100). In terms of preventing and mitigating risks related to Human Capital, Broadcasting & Advertising companies display a weak average score (24/100), below the universe average (26/100).
  • The willingness and commitment of Broadcasting & Advertising companies to address climate change and support the transition to a low-carbon economy remains weak (19/100) and is lower than the overall universe average (22/100). European companies lead the sector in their efforts to support a low-carbon economy: for example, the sector’s top five performers all use renewable energy in their operations, therefore reducing their carbon footprint. ITV and JCDecaux report that more than 50% of their total energy comes from renewable sources.
  • Vigeo Eiris has identified 101 controversies affecting Broadcasting & Advertising companies, 19% of which are of serious severity, 12% of significant severity and 6% of minor severity. The most recurrent controversies primarily relate to business ethics (responsible customer relations, corruption and anti-competitive practices), followed by the societal impact of products and services.

Key Takeaways:

  • In the wake of the #MeToo movement which was sparked by allegations of sexual misconduct within the media industry, a spotlight has been placed on workplace behaviour and the equal treatment of women in the Broadcasting & Advertising sector. Although the sector’s average performance in the ‘Respect for human rights standards and prevention of violations’ criterion has improved by 2.4% since our 2016 review, efforts to address this fundamental issue remain limited (39.5/100), indicating the need for a more proactive approach to design and implement commitments that ensure an environment free from abuse and harassment.
  • The Broadcasting & Advertising sector is rapidly changing with the widespread use of on-demand video and internet-based broadcasters. The negative societal impacts of the Broadcasting industry’s products and services – for example the consequences of inappropriate or violent content on vulnerable audiences such as children – is becoming a pressing issue and increasing numbers of companies face controversies in this regard. For example, Netflix has been involved in controversies over a show that allegedly glorifies suicide in the eyes of teenagers, which reportedly contributed to the suicide of two teenagers in the United States.
  • In a highly competitive industry, responsible management of reorganisation remains one of the sector’s major challenges. Poor management in this area can harm company reputation as a reliable employer, reduce the ability to attract skilled employees and result in social conflicts. The sector achieved a weak average score in this area (23.8/100), reflecting an overall lack of reporting on comprehensive strategies to responsibly manage reorganisation. In contrast, some companies such as TF1 and Vivendi display good performance in this area and provide employees affected by reorganisation with significantly higher levels of compensation and outplacement services.
  • Corruption is one of the most controversial topics within the Broadcasting & Advertising sector, demonstrated by the high number of controversies companies face on this issue. Over 10% of total controversies in the sector relate to corruption practices such as bribery and fraud. Involvement in such controversies can expose companies to legal risks affecting their reputation, brand recognition and social acceptability.

Best performing areas:
• Respect of shareholders rights
• Respect of fundamental human rights
• Integration of ESG factors into audit & internal controls

Worst performing areas:
• Social dialogue
• Waste
• Use and disposal of products (outdoor waste)

Top Performing Companies:
• Europe : TF1 (66/100)
• North America : Walt Disney (40/100)
• Asia Pacific : oOh!media (33/100)
• Emerging Markets : Astro Malaysia Holdings BHD (35/100)

Companies making best progress since 2017:
• Europe : RTL Group ; Eutelsat Communications (+13)
• North America: Charter Communications (+4)
• Asia Pacific: No Progress
• Emerging Markets: Grupo Televisa (+14)

To view an excerpt of our 2018 Broadcasting & Advertising sector report, download the document below.
To enquire about accessing our sector reports, please contact the relevant team below:
If you are an investor:
If you are a corporate entity:
If you are an NGO or a university:
If you are a journalist:

Download :
icon-download-34x36 Key Findings_Broadcasting_Advertising_Nov_2018
Keywords : ESG