As gaming operators deal with online sports betting and igaming, responsible gaming, and cashless payment systems, issues related to environmental, social and governance (ESG) might seem to be an afterthought.
But during Wednesday’s Entain Sustain ESG Showcase, a panel agreed that embracing such measures are vital to the holistic well-being of gaming and betting companies.
“(ESG) matters to investors, to employees, and to customers,” said Deutsche Bank Head of Sustainable Finance Trisha Taneja during the discussion Should the ESG Agenda Matter to Betting and Gaming Companies. “And I always say that ESG is sector agnostic… It should be important to every sector.”
The showcase held in London but broadcast online served as a forum for the U.K.-based gaming company’s approach to sustainability, responsible gambling, and community and sporting investment.
One way to view ESG initiatives is through their increasing prevalence in all businesses. S&P Global Ratings Commercial Head of ESG EMA Geert Arlman said ESG considerations used to “be the domain of specialized ESG funds.”
“But they’ve grown tenfold,” Arlman said, noting that ESG can affect a company’s credit rating. “In any investment decision, ESG is a factor.”
Noting that Europe has traditionally been the main market for ESG funds, Taneja added ESG is now a “baseline requirement” for European investors.
“Whether or not an investor labels your ESG risk as ESG, they’re still considering these factors,” Taneja added.
Tiphaine Aries, a consultant with Carbon Trust, said larger companies are seeing more pressure from their boards and investors about the Task Force on Climate-related Financial Disclosures. Guidelines set by TFCD allow companies to identify, quantify, and address climate risks.
While the TFCD ostensibly addresses large businesses, Aries said “We do see smaller companies who are also looking to see how they are going to be impacted, specifically in their value chains, by the changing climate and how can they properly factor that into their investment decisions.”
For gaming and betting companies, however, environmental concerns are often trumped by social and governance matters. Arlman said good governance “does set our heart racing and is an absolute hygiene factor for any investment decision, particularly for accredited investors.
“For this sector where there are perceived negative social impacts of gaming, where there is a high degree of both existing and pending regulation, where there is a licensed system, governance is a necessary condition.”
