No misinformation: CFO helps ad giant deliver on ‘social’ part of ESG

The “S” in “ESG” takes on an outsized role for Ellen Johnson, CFO of Big Four advertising stalwart Interpublic Group (IPG).

Traded on the New York Stock Exchange, IPG is a global provider of advertising solutions whose leaders are mindful of the impact their content can have on public sentiment. IPG is headquartered in New York City, has a market cap of $10.6 billion and employs 56,800 full-time workers globally.

As CFO, Johnson is the executive sponsor of environmental, social and governance (ESG) programs across IPG. Johnson worked in corporate finance at Revlon prior to joining IPG in 2000, and also served as a senior accountant at PwC predecessor firm Coopers & Lybrand.

Finance leaders and accounting professionals everywhere are contributing to strategies that help their organizations serve as responsible stewards of the environment and important contributors to their communities. At IPG, the social part of ESG is especially important for Johnson because of the role the company plays in the information ecosystem.

“We have to be concerned about the misinformation and disinformation that’s out there,” Johnson said.

In response to these concerns, IPG’s media and marketing division, Mediabrands, developed and released in 2020 its 10 “Media Responsibility Principles ,” which promote distributing factual information, transparency in advertising, responsible data collection, representing diverse people in content, eliminating hate speech, promoting respect and protecting people.

A company brand safety officer, who is a senior executive at Mediabrands, is charged with monitoring these issues and making sure the company’s content is free from bias and stereotypes that are inconsistent with IPG values.

“I’m really passionate about the role that we can play given the unique business that we’re in,” Johnson said. “We understand the impact we can have because of our reach, and we take that seriously.”

Leading on DEI

Diversity, equity and inclusion (DEI) on the board and staff also are priorities for IPG. The company board has a policy that requires it to look at candidates with diversity in experience, backgrounds, gender and ethnicity. IPG was the first in the industry to tie the compensation of senior executives to diversity hiring, promotions and representation, and continues to do so.

IPG’s Inclusion Awards celebrate their people who bring diversity and inclusion to life, and the IPG CEO Diversity Council serves as a forum for leaders of IPG companies to share best practices. Meanwhile, the company sponsors employee business resource groups that are designed to provide support in the workplace for employees who identify as women, LGBTQ+, Black, Hispanic/Latino and Asian.

“Our DEI programs are what is right from a human perspective, as well as a business perspective. Having a diverse workforce leads to diversity of thought, it leads to collaboration, it leads to outsized results,” Johnson said. “You need inclusion as well; otherwise diversity doesn't work because you have to not only be able to recruit the people, but you have to retain them and ensure that there is a sense of belonging. We work hard to make sure this happens throughout our compnay.”

Johnson’s stewardship related to these issues shows the importance of the role that CFOs and finance professionals hold in delivering on ESG issues. CFOs’ focus on data, process controls and making sure there is accountability makes them ideal stewards of ESG for their employers.

In addition, Johnson said, the management and governance experience that finance professionals possess helps them keep a company’s values and actions aligned, driving positive results. CFOs can work with their CEOs to set strategy, manage capital allocation and investment decisions, and design incentive plans that motivate progress.

“For all those reasons, a CFO is accountable for driving results, and I think that’s why it’s really important for CFOs to lean into this, because ESG is an important business imperative,” she said.

Focus on environment

While IPG’s business sector provides an opportunity to lead on social issues, the company has devoted considerable efforts toward protecting the environment as well:

• IPG has committed to reaching net zero across its operations by 2040, has submitted its science-based targets to the Science Based Targets initiative, and will source 100% renewable electricity by 2030. To achieve these goals, IPG is working on behavior change at all of its offices.

• The company has updated its travel policies to encourage smarter, more sustainable travel. IPG regularly works to reduce its energy use and has reported on its greenhouse gas emissions since 2015.

• IPG was the first company globally to publish a Sustainability Accounting Standards Board report using the standards for the advertising and marketing industry, and now reports into the Task Force on Climate-Related Financial Disclosures as well. IPG’s 2021 report received limited external assurance engagement on certain greenhouse gas emissions metrics and certain diversity metrics.

• IPG supports the United Nations Sustainable Development Goals and has focused on SDG 6, access to water and sanitation, working for years with charity: water to support such access. Programs the company has supported include a drilled well for an entire community in Tigray, Ethiopia, and a biosand filter and sanitation program at a school in Cambodia.

“When it comes to reducing our footprint, travel is an important lever,” Johnson said. “We give people choices about smarter ways to travel and make them really consider whether they should travel or if there is a more sustainable way to accomplish a business objective. Then in our real estate, which is a very centrally managed function for us, we're making sure our buildings and how we operate in them are as sustainable as possible.”

These efforts helped IPG land on the Dow Jones Sustainability Index for North America in 2021 for the second year; the index recognizes the top 20% of the 600 largest U.S. and Canadian companies based on sustainability performance.

As CFO, Johnson also monitors the impact of the ESG initiatives on the company finances. She said this issue is best measured over the long term. She said the company gets better talent and productivity because of the diversity and inclusion in its workplace, as well as its broad and deep focus on issues that affect IPG’s communities.

The scrutiny of travel and office operations for environmental improvements will lead to cost savings, as well as environmental benefits, she said. And the media responsibility principles will instill better business practices. In the end, she said, everybody benefits.

“The work we are doing around ESG will accrue to better business results. We are stronger partners to our clients, we operate more responsibly and our governance practices are in line with our values. Ultimately, that's going to accrue to our shareholders as well.”