ESG claims by gaming companies must be genuine, not just for show. Businesses must demonstrate, improve, and compare their ESG credentials. EU’s CSRD will increase regulations.

The concept of sustainability has been increasingly popular in recent times. We have always been influenced by ESG (environmental, social, and governance) issues. Still, the significance of climate change, the effects of Covid-19, and the recent crisis between Russia and Ukraine have made them more apparent than ever.

Generally speaking, the gaming industry is not considered ESG-friendly by the general public. Some people refuse to work in the gambling industry because they believe it goes against their morals and principles. The efficiency and success of businesses may be affected by these views. But sustainability, when viewed from an ESG perspective, has the potential to make the gaming industry a force for positive change in the world.

How does long-term viability in video games manifest itself?

It’s just one of many subfields within the broader sustainability arena. However, there are some universal concerns shared by the gaming industries worldwide.

Environment

The gaming industry may not have major effects on the environment at first glance. But when we go further, we realize that the need for carbon emissions that gaming generates through data centers and business travel is quite real. Because of this, gaming companies must consider ways to lessen their overall carbon footprint, such as mandating the usage of renewable energy in data centers.

Social

Responsible gambling at sites like betshah and helping gamblers in need are two of the most pressing environmental, social, and governance (ESG) concerns for the gaming industry as a whole. Indeed, this issue is a major one in the industry’s sustainability reports. A significant part of the answer will come from digital technologies that can identify hazardous gameplay and equip users to play securely.

Diversity, equity, and inclusion in the workplace should also be top priorities for chief executive officers (CEOs). While women are making strides in many fields, they still need to be represented in leadership roles.

Even though women make up over half of all college graduates, they are seen as less likely to pursue careers in the gaming industry overall, especially in the rapidly expanding field of online gambling. 1 McKinsey2 found that companies with the most diverse executive teams outperform their sector medians by 25% in financial profitability. This is in contrast to the worst-performing companies in the industry, medians, which have executive teams with fewer women.

Given these numbers, the still-male-dominated sector (with some notable exceptions at the leadership level) can assess its efforts to recruit and retain women and the extent to which its current workplace culture supports women’s professional development and advancement.

Of course, gender parity is just one measure of diversity, and there are other areas in which the gaming business excels.

For instance, companies in the gaming industry in the United Kingdom are more likely to employ persons of non-heterosexual orientation and to have a greater number of people of color and people of different races and ethnicities.

A McKinsey study found that businesses with high racial and cultural diversity levels were 36% more profitable than those with low levels. This means that gaming companies may already be reaping financial gains due to this factor.

Furthermore, many gaming firms already do an excellent job supporting local communities through what was traditionally their Corporate Social Responsibility (CSR) program, for example, by sponsoring sports teams. Since ESG encompasses more than just CSR, these efforts must now be integrated into the corporation’s broader ESG strategy.

Governance

The firm’s economic performance and financial stability are naturally vital to the firm itself inside the governance domain. But the company’s tax contribution is also a great social contribution. By being open and honest about the amount and location of taxes paid, companies may highlight the positive impact they are having by adhering to ESG principles.

Other essential governance factors to keep in mind have ethical considerations, such as the company’s rules and practices to prevent corruption and the necessity to prevent betting and gaming from being used to assist crime. This necessitates, amongst other things, thinking about the legal framework of the places the organization does business and the precautions are taken to prevent money laundering.

In addition to saving money and lowering risks, ESG can be used to build wealth. Credentials in sustainability can help a company win over consumers, investors, and talent. Better communication along the value chain and with regulators are two further benefits. Efforts to increase variety can spark new ideas, which can fuel long-term prosperity. Companies seen as industry leaders in ESG may gain easier access to funding and lower financing costs.

The ESG claims made by a gaming company must be genuine and not just greenwashing. As stakeholder expectations rise, businesses must be prepared to pinpoint, quantify, report, and enhance their ESG credentials, compare themselves to industry competitors, and consider how they might do better. The EU’s forthcoming Corporate Sustainability Reporting Directive is one example of a set of regulations that will increase in stringency (CSRD).

In this rapidly evolving business environment, companies taking the initiative to prioritize sustainability will be in the best position to survive and prosper.