Getty Images
There is no denying sustainability is a hot topic in sport right now, just as it is in the wider world of business.
More and more organisations across the industry are beginning to speak up and take action to reduce their carbon footprint and encourage their fans, customers and communities to do the same – and some are starting to see the financial upside as a result.
One oft-cited example is English soccer side Forest Green Rovers, who have long been held up as the poster child of sports sustainability. According to chief executive Henry Staelens, the newly promoted club has seen its commercial income skyrocket in recent seasons – with partnership revenue purportedly growing five times in the last three years alone – despite putting purpose before profit in just about every organisational decision it makes.
And yet, for all the talk of sustainability strategies and carbon reduction pledges coming from across the sports industry, many organisations still appear content to make excuses, arguing that implementing more sustainable business practices is too expensive or too complex. At a time when short-termism continues to reign supreme, there remains an apparent reticence in many quarters to ‘go green’ and drive meaningful change, regardless of the growing weight of evidence to suggest carbon reduction initiatives can and do lead to commercial success.
With all that in mind, SportsPro asked three leading experts in sports sustainability to make the commercial case for reducing carbon emissions and to explain why investing in achieving net-zero status makes good business sense.
Meet the panel
Henry Staelens, Chief Executive, Forest Green Rovers
Dan Reading, Head of Sustainability, Right Formula
Claire Poole, Founder and Chief Executive, Sport Positive Summit
SportsPro: What do you make of the way in which sport, as an industry, is approaching the challenge of reducing carbon emissions?
Poole: It varies dramatically. Many professional and grassroots sports organisations globally are well on their way to tackling the carbon emission reduction challenge through operational efficiencies within their properties, by considering their travel footprint and that of their fans, as well as connecting with stakeholders to reduce emissions in supply chains. However some sports organisations are still at the early stages of their efforts and need to ramp up efforts very quickly now.
The climate crisis is deepening with every passing year, and sports organisations, alongside other sectors, businesses, cities, government and other stakeholders need to play their part in reducing emissions.
Reading: There have been some encouraging innovations, partnerships, and commitments in the last year, and I am extremely optimistic about how the sports industry can uniquely reduce emissions whilst engaging and influencing wider society to do the same.
That being said, and to coin a sporting expression, I think the sporting industry has been making marginal gains when it is giant strides that are needed.
The launch of the United Nations’ Sports for Climate Action Framework at Cop24 was certainly a watershed moment. A significant recent milestone has been the introduction of mandatory reporting and request for climate action plans, which was announced at Cop26 to the 300 participating sport organisations.
As an industry, we need to see past the token press release and ensure we deliver on our carbon reduction commitments. Done in the right way and as such a fertile area for attracting investment, there are certainly multiple strategic partnerships to be secured.
Staelens: Too gently, in my opinion. In many cases, it still feels like a bit of a PR exercise when I see initiatives from various sports associations and teams – authenticity is the key to making sustainability work, both short and long term. It has to be followed up on a daily basis.
Of course, there are exceptions to that, including lots of organisations that reach out to us looking for support (including the EFL), which has led to some good work happening. But in general it feels like people overcomplicate sustainability and then de-prioritise it. It’s a bit like a diet – it’s far easier to explore the idea briefly, and then say, “I’ll start tomorrow”.
Businesses who invest time and resource in ‘going green’ are only going to benefit financially, staying ahead of competitors as the rest wake up to the importance.
Henry Staelens, Chief Executive, Forest Green Rovers
What are some of the key financial benefits for rights holders who are investing in achieving net-zero status through comprehensive, organisation-wide sustainability strategies?
Poole: By looking for environmentally friendly alternatives, money can be saved in the long run. For example LED bulbs are more expensive initially, but only use a fraction of the electricity consumed compared to traditional incandescent bulbs. They are cheaper to run than fluorescent lighting and can last for up to 50 times longer.
By using a borehole to water facilities instead of mains water, you can save money, use a greener source of water and add value to the property. By working with local suppliers, you can reduce emissions caused by travel miles from global shipping, and support and invest in your local economy and community. Lastly we can see many clear examples of sports organisations that have a sustainability strategy attracting new sponsorship revenue streams.
Reading: I have worked with a variety of rights holders and can confidently say that organisation-wide strategies strengthen commodities, reduce the bottom line, increase asset lifespan, and can lead to a more engaged and competitive value chain.
We advise brands on their investments in sport and increasingly, sustainability performance is a key component (often the most significant). So with that in mind, a rights holder with a credible sustainability strategy, pitched correctly, can secure more income.
From my time working at an international sports federation, the sustainability initiatives were cost positive with exponential investment (and that is not considering better stakeholder relationships and promotion of the sport).
Staelens: Some say we are at the crest of the sustainability wave, but I think we’re still at the beginning. Consumers are only going to become more conscious about environmental matters, and will make choices based on which organisations they see as doing ‘good’ – again, people can tell when something is authentic or not, so gimmicky campaigns aren’t the answer.
Businesses who invest time and resource in ‘going green’ are only going to benefit financially, staying ahead of competitors as the rest wake up to the importance.
We’re not preachy in how we operate – it’s just a way that we believe an organisation can be run, without damaging experience or profit (actually it’s the opposite). If that gets people talking, or following, or debating, at least it starts conversations.
Where have you seen evidence of greater profitability – not only cost reduction but also revenue increase – as a direct result of investing in carbon reduction?
Poole: Forest Green Rovers is a great example, named by Fifa as the greenest football club in the world. During 2020, in spite of many sports organisations being negatively financially impacted by Covid-19, they managed to double their commercial sponsorship revenue due to brands wanting to align with the ethos of what Dale Vince and the team have built.
We also hear many other examples of rights holders attracting sponsor organisations that otherwise may not have invested if sustainability credentials weren’t present; their commitment to the environment is what attracts new brands, in other words.
Staelens: Our club has been sustainability-driven since Dale Vince took ownership back in 2010. Since then, mission has been put before money on every decision – but ultimately profit follows, which has been shown over the past few years. Rare in football, but it shouldn’t be.
Easy examples to reference include: partnership revenue growing by five times in the last three years, hospitality trebling during the same period as fans enjoy vegan dining (which is still novel in the football world) and the emergence of around 120 International Fan Brigades (over 40 per cent of our retail sales are overseas).
Looking at a longer period, since 2010 attendances have almost quadrupled. All of this growth combined means we continue to build a financial platform to fund our ambition of competing in the Championship.
Reading: In general terms, direct revenue will centre around purpose partnerships where climate and/or sustainability is a new category of sponsorship. There are some examples of teams integrating carbon costs to their merchandise which passes the burden from the team to the consumer, which can result in additional revenues being realised.
With surging energy costs, reduced consumption can lead to significant cost reductions and energy efficient equipment will have a much shorter ROI. I worked with a club where zero capital expenditure resulted in a UK£280,000 rebate.
It is hoped that Forest Green Rovers’ recent promotion to League One, the third tier of English soccer, will help amplify the club’s message of sustainability
How are the terms inserted into commercial agreements, such as event hosting contracts and sponsorship deals, changing to reflect the evolving discourse around sustainability?
Poole: They are starting to creep in now much more. Terms can include minimum sustainability criteria, purpose-driven activations, a mix of investment and value in kind to support or scale sustainability efforts.
Reading: From a rights holder’s perspective, I have integrated sustainability requirements into sanctioning and local organising committee’s commercial contracts ranging from World Cups to the America’s Cup. I am always an advocate of collaborative contribution to a more sustainable event, but it helps to outline the expectations contractually.
When supporting brands assessing rights holders for partnerships, a key aspect of the work we do is to review and project sustainability opportunities linked to the relationship, whilst integrating key milestones and KPIs linked to sustainability performance, into the sponsorship deal.
This process ensures alignment with the brand’s corporate strategy, an area to activate around, and the rights holder benefits from investment and often specialist expertise in delivery.
Staelens: I can’t speak for other clubs, but we’ll only work with brands who are genuine in their sustainability efforts. The practice of ‘greenwashing’ (throwing money at campaigns to appear ‘green’) is something we avoid – we work with organisations that have at least started their sustainability journey, and if we can help them along the way then that’s great.
To what extent is sustainability now part of the due diligence process when rights holders and brands assess who to partner with?
Poole: I don’t think that we can say that it is the norm in global professional sports yet, but it’s increasing. Right now we probably see more visible scrutiny of rights holders when they align with brands that are less than environmentally friendly, especially when they have a sustainability strategy or have made an emissions reduction commitment.
For example, Tennis Australia recently ending it’s multi-year sponsorship deal with gas giant Santos after just one year following a campaign by 350.org, or campaigners’ reaction to Uefa’s climate efforts in light of the Champions League being sponsored by Gazprom. Rights holders working hard on reducing their own direct environmental impacts will lose credibility and their efforts will be undermined by partnering with organisations whose ethos opposes this.
We are also starting to hear more about potential sponsors and investors doing ESG due diligence on sports organisations that they are looking to align with.
Reading: Due diligence has certainly evolved to consider broader risks to the partnership. One of our most popular resources used by brands is a sophisticated tool called PETRA that uses thousands of data sets to identify optimal partnerships based on demographics and reach.
We were not involved with the Mercedes and Kingspan sponsorship, which was billed as a ‘sustainability partnership’, but this certainly acts as a reminder that due diligence work can be critical for all concerned. For those not aware, the Kingspan sponsorship began with good intentions, but the partnership was terminated as soon as it began after attracting widespread criticism regarding links to the Grenfell tragedy.
Staelens: We have to believe that brands are genuinely invested in sustainability – they don’t need to be the finished article, but they do need to be progressive and authentic in their efforts.
Gazprom’s sponsorship of the Uefa Champions League was the subject of heavy criticism from environmental groups well before Russia’s invasion of Ukraine put paid to the deal
How should sports organisations go about identifying where best to invest their resources in becoming more sustainable? What data or resources are available to them today?
Poole: The first step for any sports organisation on the road to being more sustainable is to truly understand where its actual impacts are – across scopes one, two and three emissions – and to do a materiality analysis. There are many products, calculators, organisations and consultants that can easily be found to help with this.
Regional associations can advise and signpost reputable organisations to collaborate with, too: check out the likes of Green Sports Alliance, BASIS, SandSI, and Sports Environmental Alliance. People can attend events like our Sport Positive Summit to understand more deeply how their peers have undergone this process, and to connect with organisations that can help. They can also make a commitment to UN Sports for Climate Action Framework to access a global peer group of organisations on the same journey to access that support.
Reading: In terms of carbon reporting, I would recommend investing in training for the finance team to help them with integrated reporting. This would assist with carbon literacy and act as a diagnostic to help with what comes next regarding policy changes and which areas to prioritise. In some cases, strategic partnerships can enable the use of partner resources and reporting frameworks to reduce the burden.
Organisations such as BASIS and the UNFCCC (United Nations Framework Convention on Climate Change) Sports for Climate Action Framework offer opportunities for organisations to learn from each other and discuss shared challenges and I would encourage rights holders to participate.
Staelens: Sustainability gets delayed by organisations for two main reasons, from what we hear. Firstly, it’s deemed to be ‘too expensive’, which is a bit of a cop-out. Lots of changes drive down costs, and drive up profits, but it’s an easy excuse to make. A simple example (but there are plenty of others) – the margins on vegetables vs meat.
Secondly, it’s ‘too complex’ or ‘we don’t know where to start’. Our guidance for that is to start today by doing something/anything. It gets the journey moving and there are so many quick-wins that can be done within a matter of hours, so it doesn’t drag staff away from their pre-existing responsibilities.
‘Profit’ can seem like a dirty word. However, from a brand perspective, we aim to cultivate purpose to drive profit, and this is critical to drive investment in this area.
Dan Reading, Head of Sustainability, Right Formula
To what extent are sports organisations considering the triple bottom line (social and financial as well as environmental) when devising their sustainability strategies?
Poole: To a great extent. There is more of a focus on environmental sustainability right now (which is our focus) as this is a part of the ESG effort that has fallen behind, and the climate crisis is deepening year on year. The majority of sports organisations have extensive community and social programmes, and financial sustainability is the lifeblood of sports business.
When we talk about the environmental sustainability effort more specifically, it is not to say that the others aren’t equally as important to an overall sustainability strategy – there is just more of an onus on getting environmental efforts up to a similar standard as the other two pillars.
Reading: I think sports organisations have been working on these areas in silos and so often, when working with one of these organisations, I start with an appraisal of the different buckets and look to consolidate as part of an ESG strategy.
Some sports have more mature social initiatives whilst others are taking the time to carry out a baseline assessment on which areas they are performing well in, and which areas they need to focus on.
Staelens: It’s not a term we use, or hear much about – I guess it happens naturally in the way that we operate, but I’m sure some other sustainability-focused organisations are using it for measuring success.
Related posts
There are more and more examples of commercial success from carbon reduction initiatives, so why aren’t more brands and rights holders prioritising similar initiatives and what are the biggest hurdles being faced?
Poole: From our constant conversations with rights holders and brands it is not because of lack of interest or intent. Although it’s such a hugely important topic, unfortunately it can slip down the agenda when other shorter–term issues must be tackled.
Covid-19 is a big example of this. Like many other industries, some sports organisations didn’t continue with planned carbon reduction initiatives due to reallocating resources (both people and financial) into other places to ensure the organisation survived during the pandemic.
More broadly, a true effort to ensure long-term sustainability requires systems change within an organisation, as big decisions probably aren’t made with environmental sustainability in mind. Whilst we all need to reduce our carbon footprint and there are clear examples of why this is beneficial, a hurdle is that doing it properly isn’t a quick and simple fix, it’s an ongoing effort and commitment that will pay huge dividends but requires a serious change to the way we do things.
Reading: Fundamentally there is a skills gap. Traditionally, the brand and rights holder marketing and sponsorship managers (or agency) coordinate the structure of the relationship and it is rare for a brand’s sustainability department (and in some cases rights holder sustainability department) to be involved in that discussion. There is certainly a symbiotic relationship between these departments as communication is key to spotlighting carbon reduction achievements.
For a successful partnership I believe there should be an agreement on sustainability milestones linked to funding. I often see sponsorships where the objective is to highlight a brand’s carbon credentials but the rights holder is unable to authentically bring this to life which should be discussed before any agreement is undertaken. In general, I think brands are concerned about coming across as contrived, so to be able to help them navigate messaging and create an overall strategy is something we are being asked to do more of.
Finally, in this space ‘profit’ can seem like a dirty word, however from a brand perspective, we aim to cultivate purpose to drive profit, and this is critical to drive investment in this area. The winning-at-all-costs mentality is, I believe, not a fit-for-purpose proposition for a rights holder.
Redefining the purpose of a sports organisation can help brands identify how they can work together. After all, how many commercial companies openly state ‘profit at all costs’?
Staelens: How an organisation chooses to prioritise, and how it acts, is driven by those at the top. So I’d presume that the companies who aren’t focused on environmental issues have boards/senior executives who continue to practice the way they always have – rather than looking for another way of doing things. It comes down to short-termism, in my opinion.
