Why Advertisers Are Returning to Big Oil Despite Net-Zero Pledges

The Paradox of Net-Zero Commitments in Advertising and Marketing

In a landscape where financial services have taken significant strides toward net-zero goals, the advertising and marketing sectors find themselves in a similar, yet paradoxical, situation. Initially leading the charge on emission reduction pledges, these firms now appear to be retreating, eager to court the lucrative business offered by the energy sector. A recent report from the Financial Times highlights this growing trend, indicating that advertisers are beginning to soften their decarbonization messaging on their platforms.

Much like financial institutions, ad agencies are rediscovering their interest in collaborating with energy corporations, driven by a fundamental motivator: profit. The allure of working with the energy sector, which offers substantial financial compensation for advertising services, has overshadowed previous commitments to net-zero initiatives. Advertisers, it seems, are beginning to appreciate that while advocating for climate action is noble, it doesn’t always result in financial sustainability.

The Financial Times referenced data from Clean Creatives, a climate advocacy group, which highlighted a noticeable increase in contracts between advertising firms and energy-related clients over the past year. This shift indicates a growing realization that the noble pursuit of net-zero can sometimes conflict with the practical need to maintain revenue streams—a realization not lost on banks in the previous year.

The turn toward the energy sector isn’t merely a byproduct of President Trump’s anti-net-zero stance or rhetoric; rather, it reflects a more profound economic reality. The unfolding saga began in 2022 when Texas enacted legislation that restricted state agencies from investing in companies that were perceived as boycotting the oil and gas industry. This legislation affected many major Wall Street firms looking to capitalize on the burgeoning energy transition business.

Other states followed suit, taking similar actions against banks and asset managers for their cautious investment approaches. Consequently, financial institutions, while publicly affirming their commitment to net-zero targets, found themselves in a complex position, clinging to their relationships within the oil and gas sectors. Despite promises to withdraw from fossil fuel investments, such moves have been slow and selective.

“The reality is that for quite some time, fossil fuels will be with us,” remarked Barclays’ CEO, CS Venkatakrishnan, in a statement to Bloomberg last year. He elaborated on the bank’s commitment to halt financing for new oil and gas projects, confirming that such fealty to fossil fuels couldn’t be entirely forsaken overnight. The financial industry, as he noted, “cannot go cold turkey” on hydrocarbons.