Going the extra mile with ESG

Many leading operators have dived deeply into environmental, social and governance (ESG) initiatives over the years with a sense of giving back to the community. Furthermore, some have set up dedicated foundations to focus on ESG, CSR and responsible gambling (RG) projects and despite these entities operating in different time zones and constantly competing with others, they have taken ESG initiatives to a whole new level in the industry.

In December 2021, a Betting and Gaming Council (BGC) report stated that the Denise Coates Foundation, created by bet365 founder and CEO Denise Coates, made a £10m donation to University Hospital of Northern Midlands, while the Entain Foundation was singled out for its pledge to invest £100m into grassroots sport, RG, health and community projects.

The same report also highlighted a £10m Young People’s Gambling Harm Prevention Programme delivered by GamCare and Young Gamers and Gamblers Education Trust (YGAM), while Flutter backed a £5m project to support grassroots sports clubs affected by the Covid-19 pandemic.

Dedicated foundations

CIS-focused operator Parimatch Tech set up its own international charitable body, the Parimatch Foundation, in 2019. The foundation’s aim is to contribute towards the improvement of society’s wellbeing and health through learning programmes and equality-based sports popularisation among children.

Anzhela Fokina, Parimatch Foundation COO, tells EGR how the charitable body is supporting local communities: “As of now, the foundation systematically supports and develops eight massive programmes: three in Ukraine, one in Cyprus, two in Belarus and two in Kazakhstan. Parimatch Foundation also launched two massive social campaigns in Ukraine aimed at inclusivity in sports and the importance of the coach in an athlete’s life. Over those three years since 2019, more than 45,000 kids have benefited from the foundation’s projects and initiatives.”

Although the Parimatch Foundation and Parimatch Tech work together, both have their own strategies, objectives and focus areas. The Parimatch Foundation is on the lookout for potential partners and initiatives while Parimatch Tech focuses on constantly improving the product itself as well as client experience related to responsible gambling.

Moreover, Parimatch launched a responsible gambling project in September 2021 to showcase the importance of ESG initiatives and involve more employees in the process. Parimatch even brought in heavyweight boxing champion Oleksandr Usyk as its first official responsible gambling ambassador.

Parimatch signed Oleksandr Usyk to promote responsible gambling

The project primarily involves Parimatch Tech’s developers who create the tools to make games safer. “Our analysts build predictive models of customer behaviour that help us identify potential problems at an early stage. If a situation that requires our attention occurs, we initiate live discussion on responsible gambling with the customer, as well as offer advice (and tools) to improve their control over the game,” said Rostyslav Maikovych, chief analytics officer at Parimatch Tech.

The Parimatch Foundation is currently focused on humanitarian aid to assist Ukrainian civilians affected by the Russian invasion. The charitable association has started a fundraiser to buy and deliver food, medicine and other necessary items as well as to organise evacuations for those affected by the conflict.

Meanwhile, FTSE 100 operator Entain launched the Entain Foundation, also in 2019, which is dedicated to the company’s ESG projects globally. The group recently pledged £100m over the next five years including its Pitching In programme that supports grassroots sports and sports people.

The foundation was created to provide a dedicated focus for funding safer gambling and Entain’s broader sustainability-based objectives, explains Jay Dossetter, head of ESG at Entain. “By establishing a charitable foundation under the independent chairmanship of Ed Davis and with its own dedicated board, we have been able to set a clear strategy and bring the required governance standards and rigour to the projects we support.”

In addition, the foundation’s key focus areas have been responsible gambling, sports integrity and gambling regulation research, education and treatment; grassroots, women’s and disability sport; men’s health, with a particular focus on mental health; and projects with a clear link to the local community.

The Entain Foundation recently expanded its grassroots focus as it extended its support to community sports projects in Italy. The foundation partnered with Sport Senza Frontiere Onlus to help underprivileged young people and their families across Italy.

Another charitable body is The Bally’s Foundation, formerly known as Gamesys Foundation, which was set up in February 2020. The original foundation pledged £2.25m to mental health and social isolation charities in 2020 and has since pledged to predominantly fund-registered charities and non-governmental organisations (NGO). The foundation will also consider funding other types of organisations so long as they can prove to have an impact on mental health issues, support and treatment.

Running for four years is French operator Française des Jeux (FDJ)’s Corporate Foundation which recently announced a €25m (£20.9m) budget for another five-year cycle. The foundation has accomplished 580 solidarity missions, which one-third of its employees have been actively involved with. In 2021, the FDJ conducted a survey for the first time to analyse the impact it’s had on the associations and beneficiaries of the projects it supports. The impact study, conducted by Ernst & Young (EY), revealed that for every €1 of support for associations, earmarked by the FDJ Corporate Foundation, the equivalent generated social value was €3.40.

Separating out

There are several reasons as to why a company might set up a charitable foundation completely separate from its main business, according to business consulting firm Valor CSR.

The first of these is that companies can use a foundation to reduce some of its taxable income. By pushing the money towards a charitable foundation, it can reduce its taxable income by the higher amount.

Another reason is that it can help to boost brand awareness. Most foundations are named after the firms that create them. This connects the donations back to the parent company and provides public visibility.

Lastly, a formal charitable structure prevents non-strategic charity giving. In the absence of structure, donations can be made from various departments and from multiple sources. By focusing that into a single structure, it encourages the development of goals and metrics that can be used to measure whether a company’s charitable efforts are having the desired effect.

Some examples of the significant impact gambling foundations have made include the Parimatch Foundation allocating over €885,000 (£752,121) to ESG initiatives in Cyprus, Ukraine, Belarus and Kazakhstan between 2019 and 2021. Each year, the charitable body exponentially increases its funding for social projects and aims to exceed €1m (£849,855) in 2022 alone.

Elsewhere, the Entain Foundation has committed to providing £100m of funding for safer gaming and sustainability initiatives over five years (2021-2025).

A helping hand

The Parimatch Foundation’s key area of focus is creating inclusive and equal opportunities for children to take part in sports and receive quality education in countries where it operates and where the demand from local communities exists.

“We see a critical necessity to expand our existing projects throughout all of Ukraine, Cyprus, Belarus and Kazakhstan, and we intend to make that happen by the end of 2022,” Fokina says.

For the Entain Foundation, the focus is on funding research, education and treatment to promote responsible gaming; supporting grassroots sport; encouraging diversity through technology and supporting projects linked to the communities it is associated with, either as an operator or employer.

Dossetter details Entain’s support of good causes including its $5.5m investment in a research project with the Division on Addiction at Cambridge Health Alliance, Harvard. “Safer gaming is our number one priority and we have the clear objective to provide the safest environment for our customers to play in. The research we are funding – including our five-year partnership with Harvard Medical School’s Division on Addiction – is key to the development of ARC (Advanced Responsibility and Care), our safer gaming programme,” he adds

Going green

Both Parimatch and Entain’s ESG divisions also place a strong focus on environmental measures.

In 2021, Parimatch’s Cyprus HQ was accredited by the EU Eco-Management and Audit Scheme (EMAS) and was granted international certification. “In 2022, we plan to arrange educational programmes on the Go Green topic, increase the usage and procurement of recycled goods, and set concrete targets of the organisation’s carbon footprint reduction,” Fokina explains.

Entain’s head of ESG tells EGR how the operator has achieved BSI ISO14001:2015 Environmental Management System accreditation and its first independent verification of greenhouse gas (GHG) emissions data from the Carbon Trust. “As a major operator, we recognise that we had a responsibility to show leadership on this issue. That is why earlier this year we committed to become carbon net zero throughout our operations by no later than 2035, 15 years ahead of the Paris Agreement target.

“We are developing a comprehensive plan to deliver that objective and have joined the Science Based Target Initiative to set out how we will get there,” Dossetter adds.

The Entain Foundation is also supporting this objective by investing in the planting of one million trees in the Entain Forest, with an aim to capture carbon from the wider environment. The company aims to have completed planting and be carbon neutral by 2035.

As the UK gaming industry will be going through major reform in the not-too-distant future, setting up foundations can be a way to change the public perception of what gambling companies do. Cynical individuals may see these efforts as purely a publicity move but, whichever way it’s viewed, the contributions do make a significant difference to local communities across the globe. So, whatever the reasoning behind operator’s decisions to donate or set up charitable foundations, it’s unmistakably a positive move in the direction of the greater good.