Investors and sponsors will significantly impact the future Olympic Games by driving improvements in ESG practices through their influence

Environmental Impact and Sustainability Goals:

The environmental footprint of the Olympic Games is substantial, involving significant energy consumption, construction of sports venues, waste generation, and transportation logistics. With growing awareness of climate change and sustainability, the future Olympic Games must become models of environmental responsibility. The environmental footprint of the Olympic Games is significant, and addressing it is crucial for both the International Olympic Committee (IOC) and its corporate sponsors. For the IOC, showcasing sustainability efforts is essential to maintaining the Games' global reputation and aligning with increasing public and regulatory demands for climate action. Corporate sponsors, who are increasingly prioritizing ESG (Environmental, Social, and Governance) factors, also stand to benefit by associating with the Olympics' commitment to sustainability. This alignment helps brands appeal to eco-conscious consumers, improve their own sustainability credentials, and mitigate reputational risks tied to environmental impact.

The Paris 2024 Olympics

The Paris 2024 Olympics are considered a significant first step in the right direction toward making the Games more sustainable. The event’s organizers have committed to ambitious environmental goals, including reducing the carbon footprint, using more sustainable construction practices, and ensuring the Games have a positive impact on the environment. Key initiatives include:

1. Sustainable Venues: Paris 2024 has focused on using existing venues or temporary structures, which reduces the need for extensive new construction and minimizes waste.
2. Carbon Neutrality: The Games aimed to be carbon-neutral, with plans to offset emissions through renewable energy and carbon credits.
3. Sustainable Transport: The Games has promoted sustainable transportation, including electric buses and increased use of public transit.
4. Circular Economy: Efforts were made to reduce waste by reusing materials, such as using recycled materials for Olympic infrastructure and offering eco-friendly merchandise.

While Paris 2024 still faces challenges in fully achieving its sustainability goals, it represents a promising model for future Olympic Games, integrating ESG principles into the planning, operation, and legacy of the event. It sets an important precedent for other cities and sponsors, showing that large-scale events can adopt sustainable practices and reduce their environmental impact.

Sponsors incorporated already ESG Standards in Paris 2024

Sponsors of the Paris 2024 Olympics have already started to incorporate ESG standards into their partnerships. The organizing committee and sponsors are aligning their efforts with the Olympic Games’ sustainability goals. For example, some sponsors, like energy companies and technology providers, are focusing on reducing carbon footprints, promoting energy-efficient solutions, and supporting green infrastructure.

Key sponsors have committed to sustainability initiatives, such as providing eco-friendly products and services, minimizing waste, and adopting sustainable supply chains. Additionally, the International Olympic Committee (IOC) and Paris 2024 have integrated ESG-related criteria into sponsorship agreements, encouraging corporate partners to align with environmental and social responsibility standards, which further emphasizes the importance of long-term sustainability in the event.

Future Olympic Games

The future Olympic Games present both opportunities and challenges in terms of ESG for the IOC and its sponsors. As sustainability becomes increasingly crucial, the Games must evolve to meet growing expectations in environmental, social, and governance areas. In the following, we will explore the challenges the Olympic Games are likely to face in the future and highlight what investors and sponsors should demand to ensure continuous improvement and alignment with ESG principles.

Key Areas of Environmental Focus:

Carbon Footprint Reduction: The Games are under increasing pressure to reduce their carbon footprint and move toward carbon neutrality. This involves:

• Carbon Offsetting: In addition to reducing emissions, organizers will need to invest in carbon offset programs to balance any remaining emissions.
• Renewable Energy: Future Olympic Games will likely be powered entirely by renewable energy sources, including wind, solar, and hydropower.
• Energy-Efficient Infrastructure: Stadiums, facilities, and transport systems must be designed and operated to minimize energy consumption and carbon emissions.

Waste Management and Circular Economy: The Olympics are notorious for generating massive amounts of waste. A circular economy approach will focus on:

• Recycling and Reuse: The Games will need systems in place to ensure that all event-related waste is either recycled or reused. This could include efforts to reuse materials in the construction of stadiums and facilities.
• Sustainable Materials: Products used for temporary venues, merchandise, and promotional materials should be made from biodegradable or recyclable materials.
• Zero-Waste Goals: Future Games should aim for zero-waste operations where the majority of waste is either composted, recycled, or repurposed.

What Sponsors and Investors Should Consider:

• Sustainability in Event Merchandise: Sponsors should prioritize merchandise made from sustainable materials and ensure that the production process adheres to environmental standards.
• Packaging: Investors should request that all packaging, both for goods sold at the event and for promotional materials, be biodegradable, reusable, or recyclable.
• Waste Reduction Innovation: Encourage the use of innovative technologies for waste reduction, such as waste-to-energy systems or smart waste bins that help optimize recycling.

Social Equity and Diversity, Equity, and Inclusion (DEI):

The rise of social justice movements and the growing demand for corporate responsibility mean that the social impact of the Olympic Games will be closely scrutinized. Future Olympic Games must reflect inclusivity, respect human rights, and address community impacts.

Key Areas of Social Impact:

Diversity and Inclusion (DEI): The Olympics, as a global event, provide a platform to promote diversity, equity, and inclusion. Future Olympic Games will need to:

• Inclusive Representation: Ensure that athletes, coaches, and staff represent diverse backgrounds, including gender, race, and ethnicity.
• Accessible Infrastructure: Design facilities and transportation systems that are accessible to people with disabilities and from disadvantaged socioeconomic backgrounds.
• Global Reach and Cultural Sensitivity: The Games should reflect global diversity by promoting cultural exchange and tolerance.

What Sponsors and Investors Should Consider:

• Diversity Metrics: Sponsors should request that the organizing committees provide data on the gender, ethnic, and disability representation in all levels of the Games.
• Inclusive Sponsorships: Investors should focus on companies that promote diversity in their own operations and align with Olympic values of inclusivity.
• Community Investment: Sponsors should demand that the Olympic organizers invest in local communities, with a focus on marginalized groups, education, and equal opportunity programs.

Human Rights and Labor Standards: The Olympics must adhere to strict labor standards, ensuring that workers in construction, security, and hospitality are treated fairly. The potential for exploitation in these industries is high, particularly in host countries with less stringent labor laws.

What Sponsors and Investors Should Consider:

• Supply Chain Transparency: Investors and sponsors should demand full transparency in the supply chain, ensuring that workers are paid fair wages and work in safe conditions.
• Human Rights Due Diligence: Sponsors should require organizers to conduct thorough human rights assessments in all countries and regions involved in the Olympic preparations.
• Supplier Standards: Sponsors should ensure that their own supply chains align with Olympic human rights standards, including requiring ethical practices from suppliers.

Governance and Ethical Standards:

Strong governance will be central to future Olympic Games, with transparency, accountability, and ethical behavior expected from organizers, sponsors, and participants. This will involve everything from anti-corruption measures to ensuring the integrity of the Games.

Key Areas of Governance Focus:

Anti-Corruption Measures: The history of corruption scandals within the Olympic movement calls for a rigorous governance structure. Future Games must ensure:

• Transparent Bidding Processes: The selection of host cities and contractors should be transparent and free from political influence.
• Audits and Oversight: Independent audits should be conducted regularly to ensure that funds are spent ethically and in alignment with sustainability goals.

What Sponsors and Investors Should Consider:

• Ethical Oversight: Sponsors and investors should push for the implementation of independent oversight bodies to monitor the entire Olympic process, from bidding to execution.
• Strict Anti-Corruption Clauses: Sponsors should include anti-corruption clauses in their sponsorship agreements, ensuring that they are not associated with unethical practices.

Transparency in ESG Reporting: As ESG expectations grow, sponsors and investors will require detailed, transparent reporting from the Olympic organizers, including:

• ESG Metrics and Targets: Clear, measurable goals for environmental impact, diversity, community engagement, and governance.
• Regular Updates: Annual reports on ESG progress, with independent verification of claims made by the organizers.

What Sponsors and Investors Should Consider:

• Accountability: Sponsors should demand that the Olympic organizing committees publish regular ESG performance reports and provide third-party verification of claims.
• ESG Clauses in Contracts: Investors should ensure that sponsorship agreements include detailed ESG clauses that require sponsors to report on their own contributions to sustainability and social goals.

Conclusion: What Investors and Sponsors Should Demand in the Future

The future of the Olympics will be increasingly shaped by ESG factors, with growing expectations for environmental stewardship, social equity, and robust governance. Investors and sponsors will play a pivotal role in ensuring that the Olympic Games align with global sustainability goals and reflect the ethical values of the broader public.

To support this shift, investors and sponsors should:

• Demand Transparency: Seek clear, credible ESG metrics and third-party verification of claims.
• Push for Sustainable Practices: Encourage the use of renewable energy, sustainable infrastructure, waste reduction strategies, and circular economy models.
• Ensure DEI and Ethical Practices: Prioritize diversity, equity, inclusion, and fair labor standards in every aspect of the Games, from athletes to construction workers.
• Support Long-Term Impact: Encourage the Olympic Games to leave a positive legacy in host communities, with a focus on education, infrastructure, and sustainable development.

By taking these steps, investors and sponsors can ensure that the Olympics remain a global symbol of excellence while driving forward the global agenda for sustainability and social responsibility.