Under starter’s orders: the race to sustainability
With an estimated worth of £4.1bn and as one of the UK’s biggest spectator sports, the British horseracing industry is integral to the UK’s sports market. With its green racecourses, gallops, racing yards and stud farms spread across Britain, the sport is inextricably linked with the environment and the potential effects of rapid climate change have already begun to be felt, with extreme weather events and dry ground contributing to fixtures being abandoned or impacted by withdrawn runners (for example at the recent November Racing Weekend at Ascot). This, alongside the industry’s water usage, waste and current reliance on fossil fuels, presents challenges but also unique opportunities (and motivation) for the sport to galvanise a change in traditional practices and lead the race in sustainability, particularly given the demands of the next generation of spectators, jockeys, breeders, trainers, sponsors and other supporters.
Earlier in 2022, the British Horseracing Authority (BHA) published a summary report and recommendations (the Report) based on an assessment carried out by an independent environmental consultancy. The assessment, commissioned by British racing’s Executive Committee and funded by the Racing Foundation, had the following objectives:
- review British racing’s current progress on environmental sustainability, building an understanding of current and planned activities;
- identify the main sustainability issues, risks, and opportunities for British racing, including potential scenarios and timeframes;
- present an initial assessment of where issues might remain the responsibility of individual organisations / businesses, or where collective action may be necessary; and
- make a series of recommendations about what steps racing could take to start embedding environmental sustainability in its overarching industry and individual business strategies.
This blog post considers – from a legal and regulatory perspective – three of the most interesting takeaways for horseracing to effectively manage risks and take advantage of opportunities.
Good governance as the front-runner
The level of scrutiny on sustainability in sport has increased exponentially in recent years. Indeed, the Report’s first recommendation to “take a planned and strategic approach to sustainability” emphasises the importance of first establishing good governance that embeds environmental considerations into everyday decision-making. Given the variety of stakeholders in horseracing, the industry may benefit from developing an environmental governance code with overarching principles and a commitment to sustainable racing from all involved in the sport.
However, for such a code to be effective in practice, the industry will also need to address the “barriers to further progress” identified in the Report, such as lack of awareness, understanding and expertise as well as time and capacity. British horseracing leaders recently agreed a new governance structure, which includes an Industry Programme Group (IPG) to contribute to strategy relating to environmental sustainability (amongst other strategic areas of focus). To address the barriers outlined in the Report, the IPG may be assisted by establishing a governing forum for groups of key stakeholders with personnel that can provide both leadership and authority as well as competence and expertise in sustainability measures relevant to each stakeholder group. This may require an element of external support, e.g. hiring experts and/or procuring training to help upskill and educate. To be effective in embedding the necessary culture and ensuring a holistic, joined up approach, such a forum must have a clear remit, ensure that it is not operating in a silo within the industry, and be supported with the necessary resources (requiring stakeholders to also consider allocation of funding). The establishment of a Royal Commission, as recently suggested during debate on the horseracing industry in House of Lords Grand Committee on 17 November, may indeed help the sport to develop a robust and holistic plan.
Improved monitoring and reporting
The Report identifies a number of key environmental challenges for the horseracing industry, including its use of fossil fuels, greenhouse gas emissions, water usage, waste, and recycling. Expectations and requirements on sustainability reporting, including on metrics related to these topics, have already increased. This trend is only set to continue, particularly in the EU and UK, as regulators push to improve the availability, quality, and consistency of environmental data.
Both the EU and the UK government are working on new wide-ranging reporting regimes, notably the Corporate Sustainability Reporting Directive in the EU and the Sustainability Disclosure Requirements in the UK. The indirect impact of these regimes is already felt by companies. For example, to obtain financing, businesses are likely to be required to provide greater transparency and data about their environmental impact to financiers, who in turn require this information to comply with their reporting obligations. Should bookmakers, sponsors or other businesses involved in horseracing be caught by reporting obligations themselves, “trickle-down” requirements will likely flow out to the wider industry.
Accordingly, for those not already reporting relevant sustainability information and metrics, now is the time to start investing in measuring and monitoring. This is also a vital part of understanding your own impacts, risks, and opportunities, which will allow you to set and monitor performance against sustainability-related targets and identify and implement improvements. In fact, reliable environmental data should make sustainability focussed decision-making easier, for example in relation to the recent consultation to extend the Cheltenham Festival to a five-day event. A greater understanding of the environmental footprint of a day’s racing (including, but not limited to, data on powering the racecourse, attendee transportation and waste) would allow such a decision to be taken on a more informed basis.
Increased focus on supply chains
Sustainable and ethical sourcing and mitigation of adverse environmental impacts are receiving heightened scrutiny and regulation. The Report recommends that British horseracing should “work to ensure that future commercial partnerships and business arrangements align with, strengthen and do not contradict wider commitments around environmental sustainability” as part of its wider strategy. The first steps in achieving this will involve greater communication and collaboration with prospective and existing business partners and suppliers. The purpose is to increase visibility and understanding of the supply chain in British horseracing, and to embed ethical and sustainable decision-making into procurement processes. For example, clear policies and supplier codes of conduct should explain minimum expectations (alongside related suspension and exit rights) and require transparency from suppliers to better identify, manage and mitigate risks and impacts.
The Report also recommends exploring opportunities to centralise procurement. Currently, purchasing is largely managed by individual businesses but streamlining – to the extent permitted by applicable competition laws – could have numerous benefits, including (i) reduction of costs and reduction of duplication, (ii) a more complete oversight of data reported by suppliers, possibly with the assistance of AI enabled technology to provide tracking and traceability, and (iii) the potential to use British horseracing’s collective purchasing power to influence suppliers to adopt environmental stewardship practices and develop or switch to sustainable products. Further work will need to be done by the industry to identify the priority risk and opportunity areas in the supply chain and consider the most appropriate methods for optimisation.
The Report’s remaining recommendations are similarly sensible and there is no doubt that British horseracing would be well-advised to take up the reins as a trailblazer in sustainable practices, to mitigate climate challenges and maintain its status as one of Britain’s most-loved and well-attended sports. We can only endorse the words of Rob Hezel, Chief Executive of the Racing Foundation, that “We must look beyond our sport to our wider role in society; be brave and tackle the issues in a strategic and co-ordinated way”.
Let the “Bravemansgame” begin…
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