UPDATED – Are there economic benefits of sustainability in the independent music sector? Impala thinks so
Impala issues report on economic benefits of sustainability in the independent music sector
UPDATE: Impala reached out to us and gave extra input and feedback, this has been added to this article.
Impala, the Independent Music Companies Association, has published the findings of its first survey examining the economic advantages of adopting sustainable practices within the European independent music sector. According to the survey there are multiple benefits for labels that implement sustainability measures, including cost reductions, enhanced innovation, and improved brand perception.
Let’s have a detailed look at what they communicate. You can download the business case right here. But first this…
Danger of Greenwashing
Below you can read what Impala indicated as being ‘sustainable’ practices. But, in some cases you can actually wonder if it’s not about greenwashing, because the cost for instance of producing lightweight vinyl is lower but the prices in retail will often remain the same. So, it could often be a cost element that plays, and not really the sustainable idea.
Impala reacts to us by saying that they strongly refute that assertion: “First, it is important to highlight the goal of the business case itself, which is to promote action among our members and in the supply chain. IMPALA is committed to aligning with climate science and works closely with expert advisors to ensure our approach is appropriate.
Furthermore, the report and IMPALA as an organisation don’t promote making sustainability claims without scientific backing, which is detrimental to both climate action and the organisation’s reputation. Should any companies want to display their commitment to the cause, it’s great to know that there are organisations like B Corp working on providing certified credentials.”
Greenwashing is when companies mislead stakeholders about their environmental practices to appear more sustainable than they are. Greenwashing can undermine genuine efforts, erode trust, and misguide consumers and industry stakeholders.
No Sign of the Famous Unplayed Catalogue Tracks Server Cost
Strangely enough we don’t see any mentioning of the huge cost that comes with unplayed tracks on Spotify. As we reported, Spotify will not be paying royalties for songs with fewer than 1,000 streams in a year.
But the deeper issue is the cost related to tracks that never get played. Nearly 25% of the tracks on streaming services had no streams at all. With the constant growth of the music catalog, unstreamed songs are predicted to reach a whopping 100 million by 2028.
The cost of maintaining these platforms has increased dramatically, from $35 million in 2019 to more than $130 million in 2022. So removing the unplayed tracks from Spotify would be a real sustainable move as it would mean less energy use to keep servers up with unplayed tracks.
In a reaction Impala says this: “Regarding streaming, IMPALA has had a position on the scope of responsibility for a while now, which we included in our ‘standards’ report published early last year. In a nutshell, while we’re working closely with DSPs to encourage greater transparency and support them towards measuring and reducing the impact of streaming, their emissions are excluded from the responsibility of labels, who we represent.
You can find the full report here, and I’ve also included the relevant text below. We’ll also include this in our business case report to avoid future misinterpretation. Thank you for bringing that to our attention.”
This is the relevant text that we were sent by Impala:
Standardising the sector’s approach on streaming is vital. The group reviewed the whole chain and reached a key set of conclusions related to the scope of responsibility concerning digital distribution.
Emissions from downstream digital distribution (the distribution of digital recordings through Digital Service Providers [DSPs] and consumption by fans through streaming services or digital download) are excluded from the responsibility of labels for the following reasons:
- Scope of responsibility – labels do not own or control DSPs which are the responsibility of third parties who are already taking responsibility for the relevant emissions.
- Influence – record companies have no direct control over the distribution of digital files once they have distributed to DSPs, or influence over emission reduction programmes.
- Size – due to a lack of available data, it’s not possible for the recorded sector to estimate with accuracy the size of emissions from digital distribution. The necessary data is controlled by DSPs and their downstream partners. Some DSPs are working towards gathering data from their operations and are establishing emissions calculation methodologies. We refer to this, as availability of data is part of the GHG protocol, but as noted above, scope of responsibility and lack of influence mean that DSP emissions (including subscriber emissions) are not counted as record company emissions. (This is the same as for other downstream areas of activity in the music market, such as physical retail.)
Digital distribution is a vital part of our industry and makes up a significant portion of income for our members. We’re therefore working closely with DSPs to encourage greater transparency and will support towards measuring and reducing the impact of streaming. As part of the Music Climate Pact and our own Climate Charter, we call on DSPs to work collaboratively to share data and knowledge on this issue.
Here is what Impala says in its current version of their business case regarding sustainability.
- Financial Savings and Environmental Impact Reduction:
- Companies reported important savings in manufacturing, distribution, energy, and travel costs. For instance, labels like K7! Music have reduced costs by opting for green vinyl (PET), which cuts energy consumption by 70-80% compared to PVC.
- Internal Innovation:
- Embracing sustainability has driven internal innovation. For example, some companies have optimized logistics by shifting from air to sea freight and encouraged remote meetings, maximizing staff efficiency. The introduction of new formats, like 140g vinyl instead of 180g, has proven cost-effective with minimal impact on audio quality.
- Supply Chain Improvements:
- Sustainable practices have led to operational efficiencies and cost savings. Local sourcing and just-in-time inventory management have minimized excess stock and lowered storage costs. For instance, labels reported benefits from using lightweight materials, reducing transportation and packaging costs.
- Strengthening Supply Chain Relations:
- Enhanced transparency and collaboration within supply chains foster positive changes. Suppliers publishing their sustainability data and collaborating on certification systems have presented new opportunities for large-scale sector improvements.
- Competitive Position and Brand Awareness:
- Sustainability has bolstered companies’ competitive positions. Labels such as Secretly Group and Beggars Group have seen improved brand perception and competitive advantage through their sustainability efforts. For instance, public engagement and recognition as sector leaders have enhanced their visibility and appeal.
- Regulatory Compliance and Financial Resilience:
- Proactive sustainability measures help companies stay ahead of regulatory changes. By implementing tools like the Impala Carbon Calculator, companies can prepare for future regulations and tax incentives, ensuring long-term financial resilience.
- Attracting and Retaining Talent:
- Sustainability initiatives have positively impacted employee recruitment and retention. Companies noted that a focus on sustainability fosters a purpose-driven work environment, attracting younger generations who value social responsibility.
- Attracting Artists:
- Labels with strong sustainability reputations attract more artists. Artists increasingly engage with labels on sustainability practices, contributing to positive public perception and industry leadership.
Survey Methodology
The survey was conducted through ‘qualitative interviews’ with selected Impala member labels from different territories, sizes, and stages of their sustainability journey. Research projects from entities such as Music Declares Emergency, British Phonographic Industry (BPI), and Key Production supported the survey findings, showing that music fans prioritize climate action and are willing to pay more for sustainable products, so Impala claims.
Impala itself offers tools like the Carbon Calculator to help members track and report their carbon footprint. The program aims to halve greenhouse gas emissions before 2030 and achieve net-zero emissions before 2050. It encourages members to take action by measuring their carbon footprint, reducing emissions, and investing in environmental projects.
About Impala
Established in 2000, Impala represents over 6,000 independent music companies across Europe. Known for their innovation and artist discovery, these companies produce more than 80% of all new releases and account for 80% of the sector’s jobs.
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