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Organisations of all kinds are publicly talking up their values, ethos and commitment to sustainability, with most now focused on improving their performance against environmental, social and governance (ESG) metrics. Such efforts are influencing everything from career choices to investment and purchasing decisions across many industries, and sport is no exception.
As more major brands reconsider how they treat people and the planet, their work with suppliers and business partners is being more closely scrutinised than ever, both internally and externally. That includes their investments in sport, where the prevailing talk of purpose and a growing focus on sustainability and ESG have shifted the dynamics of brand-rights holder partnerships.
While the onus has always been on both parties to do the requisite due diligence before signing off on partnership contracts, organisational purpose is now high on the agenda. Amid instances and accusations of ‘sportswashing’, ‘greenwashing’ or, increasingly, ‘purpose-washing’, the two sides of any negotiating table must be as sure as possible that one another’s brand values genuinely align, and that tangible action is being taken to walk the talk.
Introducing the Sports Partner Score Card
Knowing that front offices in sport do not typically have the skills in-house to assess the sustainability credentials of a prospective partner, 5T Sports Group set out to create an agile ‘triage tool’ to assess potential pairings. As such, the Vancouver, Canada-based sustainability consultancy – which advises major professional teams, leagues and events – devised the Sports Partner Score Card, a scoring framework through which the sustainability efforts and ESG-related commitments of more than 60 global brands across 15 sponsorship categories have been assessed.
Feeding into a comprehensive due diligence process, the framework can be viewed as a kind of ‘scouting report’ for identifying the strengths and weaknesses of a potential partner. It is intended for sports rights holders seeking suitable sponsors, but it can also be useful for global brands looking to communicate their values and sustainability efforts through their various sports investments.
Designed to address the full scope of socially responsible business in concise, plain language, the Score Card aims to create a standardised, data-based framework for both parties to identify areas of shared focus and common strengths, as well as any critical gaps that might represent reputational risk. Incorporating both quantitative data and qualitative insight, it strives to provide constructive guidance whilst setting the foundations for genuine impact campaigns.
How does it work?
As shown in the graphic below, the Sports Partner Score Card grades companies across four ‘ESG lenses’ – People, Planet, Prosperity and Partnerships – which are each composed of five ‘impact levers’. Each of those levers comprises three scores pertaining to Actions, Verification and Collaboration, giving each assessed organisation 60 different score components.
The total possible score for each lever is ten. A score of seven or more on an issue typically indicates a strong and balanced approach, likely embracing one or more best practices, collaboration and transparency in reporting.
A score of more than 120 is where strong ESG-driven brands emerge, but an overall score of 100 or better is deemed an acceptable performance. Lower than this may indicate poor performance, inadequate communications of efforts, or simply a relatively nascent ESG approach. Only a review of the qualitative information will reveal the actual situation.
A balanced approach to the four ‘lenses’ is considered essential to meeting sustainability challenges adequately. A ‘balanced approach’ breaks down as follows:
- People 25%
- Planet 30%
- Prosperity 25%
- Partnership 20%
A healthy, holistic effort in ESG will reflect a ratio of 50/30/20 among the three performance elements – Actions, Transparency and Collaboration – when they are totalled together.
The Score Card in action
To illustrate how the Score Card works in practice, researchers at 5T took a deep dive into Heineken’s data and that of three of the Dutch brewing giant’s most high-profile sports partners: Uefa, Formula One and Formula E. Heineken was chosen for this case study due to its global footprint and visibility, as well as the international nature of its sports partnership portfolio.
Heineken itself is a top performer by ESG standards, employing many global best practices and innovative programmes. According to 5T’s research, this is a company that understands its business foundations rely on natural resources, labour and logistics, and operating under current social and climate conditions requires it to operate soundly and ethically. It successfully applies standards and gathers data across its highly distributed operations with many cultural differences, and is particularly strong in areas such as diversity, equity and inclusion, carbon reduction, energy and innovation.
*Average Score for the 62 global brands assessed in the 5T Sports Group ESG Score Card
Like many prominent sports organisations, Uefa, Formula One and Formula E now publish annual sustainability reports that detail their objectives and efforts. Each of those entities has developed balanced strategies that are strongly linked to ESG principles and metrics, and those strategies are generally well-aligned with that of Heineken.
The charts below illustrate the ‘balance’ of focus of each organisation’s sustainability strategy among the four lenses that comprise the Score Card. While there are some variations in the scope and activity mix, the analysis indicates that there is no significant ‘misalignment’ between Heineken and any of these partners. Perhaps the only noticeable difference between the partners, according to 5T’s research, is that Formula One and Formula E are prioritising environmental sustainability, while Uefa puts particular emphasis on the ‘People’ lens through initiatives like its anti-racism campaign.
“Uefa’s somewhat higher priority focus on ‘People’ factors is logical,” says Aileen McManamon, the founder of 5T. “As an association of member organisations, as well as an organisation centred around ‘human-powered sport’ and responsible for health, wellness and development, the ‘materiality’ of human issues is high.”
Effort equals action
As McManamon explains, the best insight into values alignment between sports partners is currently gained by comparing their ‘Actions’ scores. These scores reflect the scope, number and quality of programmes, policies and business processes that are in play or have been outlined publicly.
As sports properties are newer to public reporting of their ESG data, their ‘Transparency’ scores are likely to remain low for several reasons. Building understanding and expertise in global ESG reporting standards takes time and there remains an absence of reporting requirements, especially for private entities like sports clubs (with those in Germany’s Bundesliga being notable exceptions). Similarly, tools for reporting are still being adapted to make them suitable for smaller organisations.
“Many organisations ‘got religious’ around triple bottom line business thinking in 2020,” says McManamon. “The concurrent conversations around equity, social justice, community, the climate crisis and economic hardships brought bolder sustainability and ESG strategies.
“Sports properties took advantage of the ‘time out’ to draft their responses – many for the first time – and the result was more broad-ranging, specific and aggressive goals than we have seen previously, when strategies were more incremental.”
Heineken and Uefa: The perfect match?
Based on the quantitative data analysis, Heineken and Uefa – whose partnership dates back to 1994 and now includes dedicated support for Uefa’s women’s properties – are generally on the same page. While much of Uefa’s goals are self-defined as ‘aspirational’ versus ‘operational’, the governing body has outlined a well-rounded plan that looks to address all that is within its control, whilst also stating that the organisation hopes to influence its 55 national association members to adopt.
Dutch beer brand Heineken is a longstanding partner of Uefa
This early assessment of Uefa’s recently published 2030 strategy provides Heineken with a preliminary view of the scope and balance of its partner’s sustainability plans. Moving forward, McManamon suggests that there are numerous ways in which Heineken could support Uefa to achieve its goals, perhaps by offering expertise and educational resources to Uefa member associations, or by incentivising the adoption of and adherence to ESG standards through partnership contracts.
Similarly, Uefa’s Sustainable Event Management System, which is currently in development, could offer a template for Heineken to deploy with other partnered events to ensure its principles are followed wherever the brand has a presence. Uefa’s stronger social strategy also offers a broad and varied platform for Heineken’s social responsibility messaging beyond responsible alcohol consumption.
A deeper dive into the scores and activities at the ‘impact lever’ level shows both partners have a common strength of focus on areas like:
- Diversity, Equity & Inclusion
- Social Innovation
- Waste
- Standards Elevation
- Public Sector
Closer collaboration in these areas could help both partners advance their own and one another’s agendas, and campaigns grounded in these topics will be on firm footing.
Heineken and Formula One: Driving the green transition
Formula One’s high score in the quantitative data analysis stems from a particularly aggressive, well-defined, and broad-reaching ESG strategy, as well as the series’ first ESG progress report, published in February. Formula One has notably outlined plans to become carbon neutral across its operations by 2030 and is relying on its various stakeholders, not least its teams and commercial partners, to achieve that ambition.
Formula One, which is also a Heineken partner, has plans to become carbon neutral by 2030
Heineken has similar green ambitions of its own. Through its ‘Brew A Better World’ sustainability strategy, announced in April 2021, the company is striving to decarbonise production by 2030 and to achieve net zero status by 2040, among a raft of other stated targets.
For Heineken, then, Formula One represents a credible platform on which to showcase its efforts before a broad global audience. Eco-friendly initiatives like its Heineken Greener Bar, which aims to help create more sustainable events by reducing waste, water, emissions and energy usage, have been rolled out across the series to do just that, as well as Formula E races and Uefa tournaments.
More broadly, given that beverage production and motorsport are two industries in transition, the Formula One and Heineken partnership offers an opportunity for both parties to strive towards bold, aggressive targets, with internal and external programmes and messaging leveraged to highlight ongoing efforts in their respective sectors.
Indeed, there are numerous areas in which Formula One and Heineken align. A deeper dive into their respective Score Cards and activities at the ‘impact lever’ level shows both partners with common strength of focus on:
- Diversity, Equity & Inclusion
- Carbon – especially Scope 3 Emissions
- Transportation
- Suppliers
- Investment
- Innovation
- Standards Elevation
Heineken and Formula E: Showcasing innovation
Based on 5T’s quantitative data analysis, Heineken and Formula E maintain a closely matched partnership overall. Formula E’s efforts in sustainability are slightly more centred on climate-focused initiatives, while it is somewhat more selective among the impact levers. Comparatively, Heineken’s overall focus is more balanced among the various topics under each of the lenses.
Heineken’s commitments in motorsport now extend to Formula E
McManamon notes that Formula E’s status as a privately held entity made evaluation of internal programmes and policies more difficult. While the series’ reporting on climate matters is more advanced than that of many other sports properties, largely due to its fundamental focus on climate transition solutions, there remains a lack of transparency on ‘People’ issues. As such, McManamon advises Heineken to steer clear of activations in this area with Formula E for now.
Still, there are obvious areas in which Heineken can leverage its partnership with the series to further amplify its efforts in sustainability. As a younger property – certainly far younger than Formula One – Formula E represents a fresh platform to bring future-focused and positive messaging to life, as well as showcasing the transition from an old to new economy. Specifically, as a city-based event series, the all-electric series is nicely positioned to deliver campaigns that position Heineken’s aspirational ‘Brew a Better World’ strategy before urban audiences.
A deeper dive into scores and activities at the ‘Impact Lever’ level shows these partners have common strengths in:
- Carbon
- Waste
- Energy
- Transportation
- Innovation
- Standards Elevation
- Public Sector
Conclusion
5T’s analysis enables Heineken to gain insights and assurance that its sports partners’ approach and priorities on ESG topics are aligned with its own. As neither partner’s marketing or commercial representatives are likely to have the expertise or familiarity with these issues, this additional insight enables the company to continue the three partnerships with confidence as the scrutiny around these areas continues to rise.
As well as supporting one another’s efforts internally and externally, Heineken can work with its partners to explore authentic joint programmes or purpose-driven campaigns that credibly address the expectations of consumers and other stakeholders.
“With this information in hand,” says McManamon, “imagine the opportunities that might emerge if Heineken were to convene these properties to discuss how their respective goals might be reached together – through event operations, with suppliers and in messaging and activations for fans?
“That would truly take sports partnerships to the next level, while benefitting us all – even those who never enter the stands.”
