ESG In Gaming: The Invisible Giant of Potential – The Esports Observer
Kalem Fergusson discusses ESG (Environmental, Social, and Corporate Governance) and how it can be applied to the esports and gaming industries to make the world a better place in the following opinion piece.
I’ve always been a gamer. Whether or not my single mother of five could afford to buy the console that I wanted after playing at a friend’s house, I was always into gamifying everything that I did as a child. The first time I got a console was when my family pitched in for Christmas to buy me a PlayStation 2. I still remember hooking it up to my cheap tube TV and never getting off of it. I remember leaving it on for days because I had to wait until my mom got paid to do my best in convincing her to buy a memory card so that I could turn it off once in a while.
I think we’ve all played games for the same reason – in seeking fun experiences, a sort of escape from the world into a reality where it feels safe to be whoever we want to be. For me, it was a world where I didn’t have to think about a troubled childhood and family dynamic. For so many of us, it is/was therapy. Some of us have met our closest friends online, and made lives and professions out of our love for esports/gaming in an industry with the absolute potential to change the world, and we know that because it changed ours. And while the industry is starting to finally address the much-needed attention to diversity, equity, and inclusion that it’s been missing, there’s still a ways to go – and there’s something else that’s still being missed.
That “something”, being a core focus on ESG (Environmental, Social, and Corporate Governance) within the industry. While working on an initiative and gathering partners and interest over the last while, I’ve noticed just how much it’s missing, and just how we’re collectively missing the point – especially with gaming/esports being the perfect space for it.
What is ESG and why does it matter within gaming and esports?
Put simply, ESG refers to three key components in measuring the sustainability and societal impact of companies and/or investments in them. Following this criteria better helps determine the future financial, social, and environmental performance/impact of companies. Many minds go straight to environmental issues when addressing ESG. This is only an element, and while one of the most important (in my opinion) it’s only a piece. In all, ESG covers social concerns such as a company’s labor practices, talent management, product safety, data security, etc., in addition to the environmental component and overall governance. It’s exciting that more and more, esports/gaming finds itself at the forefront of culture and addressing the social issues, but not so much the environmental issues – until fairly recently.
Why it matters is because gaming/esports has the perfect demographic for the generation with the most potential to change the world and use their voices, and dollars – and they’re highly engaged. The opportunity for the industry is to utilize that engagement as a vehicle to influence them as a force for good, also making it an ideal place for ESG/impact investors to start looking.
Over 60% of the audience is between 18-34 years old, while studies also point towards millennials and gen z being much more likely to make “green” decisions. The reason this is important is because they’re the generations that we want to influence in order to really bring about sustainable change going beyond gaming/esports, and is carried into further generations.
One thing remains the same, and always will: If the earth isn’t sustained, it won’t be habitable. If it’s not habitable, we won’t be here – making it one of the first things to address before social issues including us as human beings – while they’re both equally as important.
It’s beyond just tree-hugging – It’s great for business.
Razer Founder and CEO, Min-Liang Tan, recently wrote in regards to their #GoGreenWithRazer global initiative: “We had our doubts if our customers would want to wear apparel made from recycled marine plastic pollution where the images depicted the pollution itself”, he said, “But we felt it was a message we needed to share – that the oceans are getting more and more polluted with fishing nets, single-use plastics and much more… And we probably shouldn’t have been worried, the limited edition Kanagawa Wave collection was sold out in a matter of minutes.”
This itself points to this not being just a play for the planet and people, but for growth in business as well, utilizing it as a force for good.
This isn’t the only thing pointing to benefit for businesses in gaming/esports. Research also points to ESG funds outweighing conventional funds by 2025, and with many companies dependent on raising capital through funds, with those funds looking for the best opportunities to make an impact, gaming is a perfect opportunity given the engagement and demographic of the audience.
A recent SEC press release also mentions an enforcement taskforce for ESG confirming that it’s not just an opportunity, but essential for businesses as the SEC commits to pursuing misconduct and finding disclosure gaps.
Transparency within the next 5-10 years will become more important than ever, with questioning whether our favourite brands are hurting the planet, or utilizing unethical supply chains that trace back to things like child labor in different countries if they’re not transparent – these being the uncomfortable questions to ask and places to look, and opportunities for us to do better where we can.
Why gaming is a perfect fit and How we can begin taking advantage of both quickly growing industries.
With ESG Fund assets on the rise and not slowing down, investment funds are looking for the best opportunities to deploy their funds in order to make an impact, and gaming is a perfect fit, especially with many organizations dependent on funding.
Great companies are making way into gaming, such as Guayaki with their trademarked ”Market Driven Regeneration Business Model” for social/environmental regeneration – meaning the more of their product we consume, the more of a difference we make. These are the initiatives that are going to bring about more change, and the investment interest of ESG/Impact funds to the esports/gaming market. I asked my contact within the company about what’s behind it for them.
Why Gaming for Guayaki?
“At Guayaki, we recognize that people are increasingly engaging in the gaming world as a means to maintain social connectivity and to come together in community. Yerba Mate often plays the role of a social connector in the communities that have long enjoyed its rich culture.
Some creators, personalities and events are particularly well-suited to bring people together in a time when so many external forces seem to be driving people apart.
We hope to use our brand and our resources to support those that are using gaming as a vehicle to create an inclusive, welcoming space and provide a venue for people to connect.”
The best way to get involved is to begin learning more because we can then be more proactive, and with that, open up funding opportunities within a different sector. Another way to easily get involved is to reach out – I’m available for support and as a resource to anybody who wants to learn more and take advantage of this initiative when it comes to ESG and the gaming industry. Esports and gaming is a grounds for global change that goes much beyond gaming. With the engagement of gaming, and that engagement being used proactively to move in this direction, organizations will see more ESG funds looking their way to further make an impact, making it a vehicle for both positive change and business growth, with newly injected capital driving up the valuations of businesses.
This said, companies that adapt early with implementing ESG initiatives are going to be the companies that ESG/impact investment firms look at first. The companies that really appear to care enough, rather than making changes because it was a fad, or they “had to” and/or because green-washing seems like a good marketing ploy.
I think the final point here is this: gaming is an industry, when paired with ESG, that currently has the most leverage and possibility for long-lasting and sustainable change, and neither are going anywhere, so it’s really about who wants to be ahead of the curve and stand for something with such potential.
Gaming and ESG can, and will, change the world and industry as we know it – That’s why this initiative matters.
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