Havas says it experienced 'negative publicity' and 'reputational harm' for taking fossil fuel client

Advertising agency Havas has warned investors that it experienced "significant negative publicity and corresponding reputational harm" for taking on a client in the fossil fuels sector.

"The group has faced, and is likely to continue to face, negative publicity based on the identity of its clients and the public’s (or certain segments of the public’s) view of those clients, irrespective of the nature of the group’s services to those clients," said Havas in a prospectus listing. 

In the same prospectus listing, Havas said that the group may fall short of stakeholder expectations relating to ethical, environmental, social and governance considerations in ways that materially adversely impact the group's business, financial condition, results of operations and prospects. It added that such negative publicity and reputational harm may negatively impact the group’s ability to attract and retain clients, employees, suppliers and other partners.

Don't miss: Havas' B Corp certification revoked over Shell deal

"Additionally, the group may face pressure to not do business in certain industries or sectors that are viewed as harmful to the environment or are otherwise negatively perceived," said Havas. 

It added that four of the group's agencies lost its B Corp certification in July 2024 due to other, unrelated agencies within the group providing services to the client. 

While the loss of such accreditation has not resulted in any material adverse effect on the group's financial performance, the group experienced significant negative publicity and corresponding reputational harm.

In addition, the group may therefore face pressure to implement corporate social responsibility criteria in client onboarding processes, adding that any such criteria could consequently restrict the ability of the group’s agencies to work for clients operating in certain industries or sectors that are viewed by the public as harmful to the environment or are otherwise negatively perceived.

"The group may also be subject to reputational harm by virtue of its delivery of crisis management services, particularly where such services are delivered in the context of a controversial event that is negatively perceived by the public or certain segments of the public," it added. 

In response to the prospectus, Duncan Meisal, executive director of activist group Clean Creatives said: "Havas' decision to become Shell's media agency has been a disaster for their reputation and finances because working with fossil fuel polluters is not good for business. Shell knew its products caused climate change in the 1970s and lied about it, and continues to have its ads removed from broadcast for misleading consumers. Responsible agencies do not work with companies with such a long history of dishonesty, or whose products cause billions of dollars worth of damage to the planet. Havas made the wrong decision, and its shareholders have paid the price."

Havas has declined to comment. 

While Havas did not name the fossil fuel client, it was reported that B Lab has revoked Havas' B Corp certification in July this year over its Shell deal. 

"This decision follows pressure from 27 B Corps in the Clean Creatives network, as well as many other professionals and creatives advocating for urgent climate action across the advertising and PR industry," said Clean Creatives in a separate statement on LinkedIn. 

"We want to thank B Lab for making the right call to protect their standards from agencies that want to use the certification as cover for greenwashing. We hope to see similar decisions made for other B Corp agencies that continue to work with fossil fuel polluters," it added. 

When MARKETING-INTERACTIVE reached out earlier in July, Havas said in a statement that it has "cooperated in good faith throughout B Lab’s investigation, while simultaneously preserving the integrity of confidential client information. Whilst the investigation recognises that our certified agencies (Havas London, New York, Lemz and Immerse) do not have a relationship with Shell, we accept the ruling and they will cease to be B Corp certified."

That said, Havas said it will be continuing its commitment towards sustainability.

"Our level of commitment towards sustainability remains unchanged, as evidenced by Havas’ receipt of the gold medal by EcoVadis - the world's most trusted provider of business sustainability ratings – earlier this month, the validation of our decarbonisation trajectory by the science-based targets initiative in March 2023, and the deployment of the Havas Carbon Impact Calculator across all our agencies to promote eco-designed solutions," said Havas in a statement.

"We are proud to support our clients in their transformation for the future and remain focused on progressing towards the highest levels of social and environmental performance, with more to come in the coming months and years," it added. 

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