The landscape of Australia’s clubs sector is undergoing a notable shift, driven by the increasing focus on Environmental, Social, and Governance (ESG) reporting. This shift is primarily propelled by evolving regulations, particularly in relation to climate-related financial disclosure legislation, as well as a growing awareness and demand for ESG reporting among stakeholders. Many larger clubs across Australia started their ESG strategy and reporting journey over the past three years, often prompted by questions from their bank, directly from members or with a proactive board of directors.
With gaming regulation becoming a key focal point for policymakers and local authorities, clubs are now turning to ESG reporting, particularly in the form of Social Impact Reports. These reports aim to showcase the economic and social benefits that local communities derive from clubs, highlighting what they would miss out on if the industry ceased to exist. Contrary to common misconceptions within the industry, ESG encompasses more than just environmental sustainability, with the social and governance aspects arguably holding greater significance within the clubs sector.
The ESG reporting expectations are coming faster to clubs due to the perceived high-risk nature of the industry to external stakeholders. By 2026/2027 all large clubs will face mandatory ESG reporting requirements (noting the expected approval of draft legislation); this will increase some overheads with additional data required covering carbon emissions, human resources policies, governance procedures and climate change risks.
In anticipation of these requirements, it is imperative for club executives to engage with their financial institutions and insurers to understand their expectations regarding ESG reporting. Some clubs are already experiencing limitations in accessing funding for development projects due to their inability to meet these expectations.
Developing an authentic ESG report that meets the expectations of the Australian market is a time-intensive process, often taking over two years to complete. However, the potential benefits for clubs are significant, including an enhanced social license to operate, a stronger sense of purpose within the community, and improved staff engagement with the club’s mission, vision, and values.
Understanding ESG reporting expectations
Adhering to stringent environmental standards, managing community impact, and maintaining transparent and ethical governance structures pose significant challenges. Balancing financial viability with these heightened ESG requirements adds complexity to club operations, calling for innovative strategies to ensure compliance without compromising the core offering, services and experiences the club can offer to members and the community.
Good ESG performance includes:
- Modern Slavery and Human Rights assessments in the supply chain reporting
- Measuring of Greenhouse Gas Emissions
- Strong governance in the form of policies and procedures
- Human Resources
- Occupational Health & Safety
- Compliance and Risk Management
- Environmental Management
- Data Privacy and Cyber Security
- Staff training
- Incorporation of ESG into Risk and Audit Committee
- Transition to a low-carbon economy by implementing energy efficiency upgrades, better waste management and water management
- Climate change risk assessments (flood, fire, heatwaves and storms)
- Imbedding sustainable design and construction into new development projects, or property management processes
- Efficient resource use, working with suppliers and the community to create a business model that consumes less, integrates circular economy principles and produces less waste
The ESG reporting expectations will vary depending on a club’s size. An outline of the best approach for each club category is outlined below.
Implementing effective ESG strategies
Although not mandatory, small clubs are also commencing their ESG reporting journey. This has helped differentiate their clubs from competitors, connect to younger generations and assist in recruitment.
An effective ESG strategy can be achieved/designed over three critical milestones:
- Laying down the groundwork – ESG strategy establishment, ESG stewardship and project ideation.
- Pathway to reporting – Enhanced reporting, public disclosure and transparency.
- Continuous Improvement – Meet goals and targets, advance KPIs, and seek innovation
