One of the points made by ex Coke man James Williams, in his excellent interview for Unofficial Partner Episode #301 was to argue that the IOC should be more pro-active in setting a progressive framework to enforce improvements in Olympic sustainability in Games delivery.
We’ve always recognised huge value in host cities using their bids to accelerate positive infrastructural change and so we’ve tended to shy away from the perennial OlyPara bid city debate – the one in which critics of the Games point to the death of the Olympic movement when bid cities drop out. And we’ve been – and remain – strong advocates of the TOP programme, judged on its commercial performance, the quality of the partners it’s attracted and the longevity of the deals. But in both areas we’re being forced to rethink.
And it’s down to sustainability.
Let’s start with TOP.
Environmental sustainability and TOP
Although the IOC runs one of the world’s largest sponsor programmes, it’s in the same bind as every other rights holder : how does it green its partnerships or justify partnership with any business whose environmental performance is lacking?
Broadly up until 2012, it was easy for the IOC to make the case of values alignment with its partners because, and this is the beauty of the IOC brand, there are no shortage of positive values for partners to identify with. But in 2012, the value of Olympic sustainability itself started to shine through.
LOCOG’s sponsorship pratfall of selling the title of Sustainability Partner to BP and EDF was aggravated by the IOC with Dow in particular, currently the IOC’s Official Carbon Partner. Sustainability can’t be owned by specific sponsors. If the IOC offers de facto endorsement of businesses as sustainable, it needs to set very high standards.
The IOC's Official Carbon Partner
In Dow’s case it claims to (and surely does) bring ‘innovation and carbon expertise to tailored mitigation projects in building energy efficiency, packaging and recycling, and industrial applications’. But it’s not quite so simple.
We’re familiar with this category as we explored it in some depth on behalf of BASF. Dow, like BASF, is most often a small but important part of an extremely long supply chain. Its products, as Intel’s famous brand campaign told us, are generally on the inside (except coatings, of course!).
Dow has no magic wand to wave. It can agitate for change, it can develop products which deliver better environmental performance, but it can’t change entire supply chains. In the words of Neil Hawkins, Corporate Vice President and Chief Sustainability Officer and steeped in environmental sustainability, cited here in Reuters : ‘Some of the most difficult issues are those outside our direct control.’
To grant it the designation of Official Carbon Partner is extremely generous – the IOC is bending over backwards with that one.
Climate change is different
The IOC has a pretty well-developed public affairs nose. Over the last 20 years it has broadly done a good job of staying gently ahead of public opinion. At times it makes controversial decisions, but it generally does them in full awareness of the likely reaction. For many years, Coke and McDonalds were the lightning conductor for values protests : anti-obesity campaigning was an annoyance, but little more and easily offset by investment in grassroots sport. But climate change protest is of a different order altogether. Climate change is provoking existential angst. Extinction Rebellion doesn’t threaten anyone with an Eton Mess.
Within the duration of a typical TOP term – eight years, two cycles – public opinion shifts. But businesses like McDonalds’ and Coke are already reacting to public opinion in their product range : with salads and stevia. Eight years of climate change however takes us past 2030, the IPCC’s deadline to cut carbon emissions by 45%. A partnership which is acceptable now can quite easily be totally unacceptable in 2030. Meanwhile, Coke is now more under siege for its environmental performance. The mid-term reputational risks are real. The IOC has found itself on the wrong side of public values before – and it wasn’t pretty.
The IOC TOP programme faces essentially the same three choices as any other rightsholder :
- It can create a transparent framework for engagement with corporates, and a plan for measured and achievable progress
- It can choose to accept only partners with strong credentials in environmental sustainability. It would be a brave decision because it jeopardises US$200M annual revenue but arguably the IOC could afford to devalue its partnership packages to secure businesses with strong environmental credentials.
- Or it can continue to follow the classic Public Affairs playbook: up-weight the sustainability performance of any given partner to provide a defence, take a broad view of sustainability to down-weight the environmental component and … rely on consumer apathy. But the IOC, for better and worse, is not any business : it has to know that while we consumers may be apathetic, IOC hypocrisy is a juicy storyline to media all around the world
A framework for Partner engagement
The first is actually lowest risk. It’s no more than what is required of any sustainability strategy (for the time being) – a plan for measured and achievable progress. And here are some starters for ten:
- a transparent, published and live commitment to sustainability specifically minimising their own carbon footprint which tracks against the frameworks established by the Paris Agreement
- less than 30% of the Partner’s core business to come from the top 5 high polluting industry categories, unless it can demonstrate clear commitment to reducing carbon emissions in advance of the Paris framework
- no egregious examples of greenwashing in last five years
- upper quartile ESG ranking within its category
- acceptance of an IOC framework for partner activity such as :
- a plan to monitor and reduce TOP carbon impact at each Games in line with the Paris Agreement (or better)
- caps for long-haul hospitality invitations
- allocating Games tickets according to geographic bands to reduce travel
- commitment to the public transport options of the Organising Committee for 90% of guest and employee travel
It would be easy to add more. It would be easy to appoint an independent panel to determine the necessary points of reference. It would be easy to manage. It would relatively easy to negotiate. The point is – it’s not difficult.
And leadership by example in this case would empower every ISF, every NGB to do the same.
(For ref, see our post on getting sponsorship top net zero.)
Environmental sustainability and hosting
So that’s TOP. So far as hosting is concerned, Olympic sustainability is a multi-dimensional challenge – as this graphic shows.
The actual environmental performance of each Games isn’t even shown in the graphic but can again be addressed through a framework which increases expectations over time. Although the IOC sets high ambitions for minimising environmental impact and no doubt encourages OCOGs to aim as high as possible, the approach is left to the whim of the Organising Committee. In James’s words : ‘If the IOC really wanted to make fundamental changes in sustainability, you want to write a ten year plan that takes in all of the Games in that ten years and goes, each year we’re going to reduce our plastic by 25% every single Games.’
Paris has promised to cut emissions by 50% from London, but what happened in Rio, Pyeongchang, Beijing and Tokyo?
In terms of new construction, the IOC has been able to pivot quickly, with Tokyo, Paris and Los Angeles looking to use existing infrastructure to reduce the carbon impact of construction.
But scale – tickets and accreditations – is the biggest challenge to address because it talks directly to deeply held beliefs.
We’re back to the frightening question of how we balance our responsibility to the planet and our children with maintaining our living standards. The prospect of an uncertain future. For most businesses, and most people, the aspiration of healthy growth and improvement is baked into our notion of living standards.
The IOC funds growth in sports participation, at every level, but increasingly the question is what constitutes sustainable / healthy growth? The challenge of scale can’t be addressed by any framework, it requires brave thinking and active product development : what will the Games look like in 2040?
From an environmental perspective, the Olympic and Paralympic business model – and that of most mega events – is intrinsically flawed, because tourism and ticketing are a fundamental source of projected value to host cities, an intrinsic part of the hosting investment model. Whether tourism actually increases during the Games is a moot point but business models for the investment to host look to the economic impact of a massive influx of people and increased tourism legacy.
- rotate the Olympics among the same cities so all required infrastructure will already be in place, and the Olympic Games can be hosted with minimal social and ecological disruption and at minimal cost.
- greatly downsize the event to reduce resource requirements. This will diminish the carbon emissions by visitors and bring down the ecological and material footprint by reducing the size and cost of any new infrastructure required.
- improve sustainability governance by creating or mandating an independent body to develop, monitor and enforce credible sustainability standards. This action will improve the current situation, where each Olympic host city sets its own sustainability goals and remains unaccountable when not achieving them*.
These recommendations look extremely naïve from the perspective of growth = bigger.
But perceptions of growth depend on the metrics we use. Media consumption is the key growth driver for IOC revenue and a sharper focus on the TV event could successfully reduce one component of the Games’ carbon impact. Increasing sophistication in content delivery clearly has a role to play in improving video consumption, as does web 3.0. Reducing accreditations, to some extent, is doable, if painful.
And FIFA, of all people
And perhaps there’s a lesson to learn from FIFA, of all people. it is easy to imagine a model close to FIFA’s Fan Festival execution with Bud this year to allow a de-escalation. Official licensed venues, supplied with Olympians, heavy TOP and host city engagement – shifting as we did with Lloyds from taking the people to the Games to taking the Games to the people. TOP Partners redirecting the millions they would have spent in Olympic Pavillions.
The Fan Festival model in fact has many advantages. It increases the assets of the IOC, it offers national focal points, it spreads the spirit of the Games and the idea of global celebration – as well as reducing international travel and environmental impact. It’s not the same as a ticket to the Games – it can’t be. But can the IOC create experiences for consumers around the world which provide a substitute? It has to try.
Downsizing does not have to reduce the emotive impact of the event. Games programmes which, like Tokyo and Paris, are more publicly accessible help infuse the Olympic spirit across the host city. Smaller capacity venues limit ticketing revenue but also generate cost savings.
The IOC's role in managing process
The bigger question that James raises is about the role of the IOC in managing progress.
The IOC has embraced transparency to a large extent in its major policy-making. In the coded language of diplomacy, it respects the autonomy of its ISFs. But at the same time it doesn’t gladly suffer dissent. Major decisions, such as whether or not to allow Russia and Belarusian participation is devolved to the ISFs. But the IOC’s position is clear, the ISFs depend heavily on the IOC and there is a strong pressure within members and ISFs to demonstrate solidarity. In other words, the IOC minimises the apparent control it wields over the policies of international sport.
The IOC has taken a positive lead in Olympic sustainability, its Sustainability Strategy has provided a helpful framework for the Olympic Movement, and just recently it became a founder signatory to Sports for Nature Framework. But it has chosen not to seriously incentivise improvement in environmental performance of its ISFs. This study, dated July 2021, shows the poor environmental performance of Olympic ISFs – only four at the time had published a sustainability strategy. Yet the IOC has the resources to accelerate and fund sustainability strategies, to part fund sustainability managers, and tie elements of ISF funding to improvements – to drive the change that is needed – not just for the environment, but to be market ready for a new generation of sponsors.
Not radical, just progressive.
Just last month saw 400 athletes call for greater climate action from FIS, including a strategy to live up to its commitment to the 50% emissions reduction it made on signing up to the UN Sports for Climate Action framework. These athletes are just the tip of the iceberg – athletes are responding as humans to the climate crisis in a way that most GBs can’t. And increasingly they will demand environmental accountability.
Regulation or leadership?
Matthew Campelli, who produces The Sustainability Report, which brilliantly covers the subject of sustainability in sport, recently asks if it’s time for an environmental regulator in the UK – in the context of the UK Government’s white paper on club ownership.
To the three proposed criteria for new owners and directors – namely, tests of integrity, honesty, financial soundness and competence; legitimate source of wealth; and robust financial plans for the club – Matthew floats the additional criteria of assessing the carbon impact of the underlying business, the legitimate source of wealth. With Man United likely to be sold to either the oil and gas connected Qatari billionaire Sheikh Jassim bin Hamad Al Thani or Sir Jim Ratcliffe, founder of INEOS, Man United looks set to be a front for the petrochemical industry before too long.
But Matthew’s using a rhetorical device to call for more regulation and top-down direction. In his words : ‘The bigger question is not about a regulator but about regulation… How we address (or fail to address) the climate crisis in the present and upcoming years will have a significantly material impact on the health and viability of sport.’
Self-regulation is fine but isn’t exactly a recipe for change
Self-regulation is fine but isn’t exactly a recipe for change. Self-regulation ultimately depends on a free market model working for activism – depending on people to build a business model on supporting climate action. But activism has little value in a free market – the only disruption the markets like is redistributive. (Although see this about Margaret Klein Salamon’s work to match philanthropists with radical activists.)
We don’t need government regulation. Our ISFs clearly have the power to regulate. NGBs enact constitutional changes to incorporate anti bribery, athlete representation, human rights with the encouragement, support and scrutiny of their ISF.
As we’ve shown above in the case of the IOC – clear and achievable targets and frameworks for Olympic sustainability can be set.
We’ve just seen the launch of the IPCC’s Synthesis Report – and it’s pretty bleak. IOC, ISFs, FIFA, EPL – the time to lead is now.