Going for green: ESG in sport

For the last few weeks, we’ve been on the edge of our seats following the Team GB athletes ‘Go for Gold’ at the Paris 2024 Olympics and Paralympics. But it’s not just the athletes that have been hungry for top prize: Paris 2024 endeavoured to be the greenest Olympics in the event’s history. It pledged, among many things, that it would halve the event’s carbon footprint compared with the average of London 2012 and Rio 2016 and would incorporate sustainable travel and food choices. 

Why is being green so important to the Paris 2024 organisers? Most sports organisations acknowledge that sport’s contribution to climate change is considerable and sport itself is increasingly threatened by climate change. There are existing ESG sports standards organisations may wish/have committed to comply with and questions are increasingly being asked of our favourite sports organisations on what they are doing to ‘Go for Green’.

Frameworks and standards on sport and ESG

The impact of sport on the climate is complex and differs by sport but is undeniable. Travel to/during events, resource use, construction of stadiums and sponsorships of high-carbon products, are all contributing factors in the sector’s contribution to global emissions.

In December 2018, the United Nations Framework Convention on Climate Change (“UNFCCC”) and the International Olympic Committee (“IOC”) co-launched a Sports for Climate Action Framework which aims to help sports organisations reduce emissions and leverage the worldwide popularity of sport to engage fans in the climate effort. Organisations are invited to adhere to five guiding principles, including undertaking efforts to promote greater environmental responsibility and reducing overall climate impact. Signatories must commit to reaching net zero by 2040, set climate targets, issue plans to meet those targets and publicly report on progress every year.

There are over 200 signatories to the initiative, including the International Federation of Association Football (“FIFA”), a number of UK football clubs, and Sport England (see the list of signatories here). The EU Commission’s Green Sports expert group has also endorsed the Framework.

The Sports for Climate Action Framework focuses on climate, but there are others which deal more broadly with sustainability (e.g. ISO 20121 and Global Sports Impact Project). There are also sports-focused alliances producing resources to support sustainable sporting events (e.g. Sustainable Event Alliance).

Organisations may also be required to report on ESG matters under general corporate reporting laws. For example, many football clubs in the UK are privately held companies and may need to comply with the climate-related financial disclosure requirements in the UK Companies Act. Others with a European presence may also end up caught by the more onerous EU Corporate Sustainability Reporting Directive. Even where not caught directly, the potential for indirect impact, the high-level of scrutiny of such topics and clear evidence of impact on sport may drive voluntary reporting.

What can sports organisations do to enhance their ESG profile?

Some sports are showing impressive leadership on ESG matters but others are falling behind. Researchers at the University of Birmingham analysed the published sustainability strategies of 34 international sporting federations and found that some have strategies with measurable targets on carbon emissions or recycling and have publicly committed to reporting on their progress (see here). Athletics, biathlon, hockey, rugby, sailing, skating and skiing/snowboarding were rated as the strongest sports on several sustainability-related measures, whilst tennis, basketball and gymnastics were amongst sports rated the lowest due to there being negligible public evidence on those sports’ engagement with sustainability.

There are various ways sports organisations can enhance their ESG profile, with some points unique to the sports sector, and others relevant to all businesses facing pressure to act on ESG matters:

• Set sustainability targets. These can be aligned with global benchmarks, national standards, or sport-specific initiatives. Targets help raise the profile of ESG matters internally and can enhance reputation externally. For example, Wimbledon aims to reduce emissions from operations to net zero by 2050 and be a more resource-efficient organisation by 2030.
• Think about policies. Policies can set parameters around organisations’ engagement on ESG matters. Due diligence policies on the assessment of business partners, human rights policies on standards for the organisation and its supply chains, and environmental policies addressing travel, energy and water use, facilities and event management are all good examples. Governing organisations can also set standards at organisation level.
• Make ESG a board matter. The Sports for Climate Action Framework explicitly states that climate should be a board issue and the board should be involved in developing sustainability strategies. Whilst the Framework only applies to signatory organisations, making ESG a board matter can help an organisation identify and address the risks and opportunities presented by ESG matters to ensure the long-term viability of the organisation.
• Consider partnerships and sponsorships. Be mindful of how commercial partnerships and sponsorships affect ESG performance and reputation. The public and key stakeholders are paying closer attention to partnerships. Associations with controversial partners can harm an organisation’s reputation and lead to financial losses. Incorporating ESG due diligence into commercial transactions can go some way to mitigating risk in this area, whilst incorporating ESG into contracts can help manage such risks on an ongoing basis.
• Check for greenwashing. Public statements should be fair, clear and not misleading. Regulators and courts globally are cracking down on greenwashing across sectors and sport is no exception. For example, in June 2023, the advertising regulator in Switzerland held FIFA had misled consumers by claiming the Qatar World Cup in 2022 was carbon neutral. Organisations should ensure they have a consistent ESG narrative and be able to substantiate ESG claims.
• Prepare for reporting. More sporting organisations are making their ESG strategy, aims and progress public (e.g. English Football Association 5-year strategy Playing for the Future and UEFA’s Euro 2024 ESG Strategy). Organisations should consider what reporting peers are doing, any requirements to report and consider their approach going forward.
• Engage with education and advocacy initiatives. A unique feature of sport is its ability to reach and educate huge numbers of fans. The Sports for Climate Action Framework requires signatories to promote awareness on climate change by mobilising resources to support action, such as broadcasting channels, social media, and partnerships. When negotiating broadcasting agreements, commercial partnerships and star contracts, organisations should consider how they can jointly promote ESG matters and align on ESG goals.

Conclusion

As the race to ‘green’ accelerates, sports organisations should think carefully about how they wish to position themselves. From setting ambitious ESG targets to forming responsible partnerships and avoiding greenwashing, there are many ways sports organisations can enhance their ESG profiles and score points for both the planet and the future of sport.