Sustainability, sport and the law – governance and contracts
Climate change is an immensely important issue for our generation, and sport can play an important role in achieving international environmental targets, such as securing global net zero by mid-century (the aim of the UN COP26).
Sports organisations (such as clubs, governing bodies and leagues), brands, broadcasters and individual athletes have the ability to influence millions of people. With its ability to cut across race, gender, age, politics and other divisive characteristics, sports’ powerful platform can be used to raise awareness for climate change and champion sustainable behaviour.
The UN’s Sports for Climate Action Framework sets out five key principles which demonstrate how sports organisations can use their platform to promote a more sustainable future. The five principles are:
- Undertake systematic efforts to promote greater environmental responsibility;
- Reduce overall climate impact;
- Educate for climate action;
- Promote sustainable and responsible consumption; and
- Advocate for climate action through communication.
(the “Principles”).
Setting ambitious and genuine sustainability goals also has commercial benefits for sports organisations, as they can benefit from increased fan engagement, investment and reputation. In League One, Forest Green Rover’s status as “The World’s Green Football Club” has enabled it to punch above it weight and secure long-term deals with “green” brands such as Oatly, Quorn, Bolt and Ecotricity.
In this article we consider how sports organisations can use governance, policies and contracts to implement the Principles and promote a greener future, inside and outside of sport.
Green Governance
Governance and policies can be used by sports organisations to set out their sustainability commitments, confirm the strategy to achieve those goals and detail how the organisation will monitor and report on its environmental impact and progress.
In terms of sustainability commitments, organisations can clearly and effectively demonstrate their climate goals by setting a net zero target and embedding this in their sustainability policy. A net zero target helps push climate issues up the organisation’s agenda and motivates it to implement an effective climate strategy. Various sport organisations, including Arsenal FC, Williams Racing and World Rugby for example, have signed the UN’s Sport For Climate Action Framework which requests signatories to commit to halving their emissions by 2030 and aim to achieve net-zero by 2040.
When it comes to strategy, policies can be used to set out the steps that will be taken to achieve the organisation’s climate commitments. This can cover the organisation’s approach to areas such as travel, energy, recycling, water, facilities and procurement. Chelsea’s Environmental Policy is a good example of an organisation using a policy to set out a clear sustainability strategy.
Policies should also contain a clear process of reporting and monitoring the implementation of the strategy, to ensure that stakeholders are kept informed and updated on the organisation’s progress.
Governing bodies can also use sustainability policies to influence the climate strategy of elite and grassroots clubs. Policies can be used to provide sustainability guidelines and requirements for clubs to follow at all levels, covering points such as minimum standards on green energy, recycling and development, for example.
Before setting climate objectives and policies, it’s important for sport organisations to understand their full impact on the environment. This enables organisations to set policies that address the areas of their business that have the most significant impact on the environment. This is a complex area and specialist advice should be obtained.
Sustainable Partnerships & Sponsorships
Due Diligence
Commercial partnerships and sponsorships are critical for a sport organisation’s revenue, growth and reputation. Sports organisations that are committed to a more sustainable future should ensure that they work with partners and sponsors who have authentic climate goals consistent with, or complimentary to, their own.
The key here is to identify whether the partner or sponsor is genuine in their sustainability efforts and to consider how any such partnership may be perceived. British Cycling and Shell’s eight year partnership, announced in October 2022, demonstrates that identifying a suitable partner can be very difficult, and very controversial. The reaction to that particular partnership shows that even if a partner does have sustainability goals (and a crucial role to play in the reduction of global emissions), a tie-up may still attract negative attention if the partner has a poor history and reputation with environmental issues.
Friends of the Earthit’s deeply disappointing that British Cycling could think it’s appropriate to partner with a fossil fuel giant” whilst Greenpeace claimed that “the idea of Shell helping British Cycling reach Net Zero is… absurd”.
criticised the deal, stating that “
However, on the other side of the debate, commentators argued that British Cycling and Shell are both organisations making genuine attempts to reduce their carbon footprint, and that they can learn from each other through the partnership whilst allowing cycling to grow as a sport.
Whatever your views on the British Cycling and Shell partnership, one thing is clear. Sustainability needs to be considered very carefully when choosing who to partner with. In October 2022, British Cycling’s Chief Executive stepped down from his role due to the controversy caused by the Shell deal, which attests to the significant consequences that sustainability issues may lead to.
Before a commercial agreement is entered into, there is usually a due diligence process which involves the sport organisation’s advisors conducting a detailed review of the prospective partner’s financial and legal position. A prospective partner’s environmental record should also be assessed in the due diligence process, so that the sport organisation can understand whether the partner is progressive and authentic in its approach to sustainability.
Standard Clauses
After selecting a partner or supplier who is aligned to the sport organisation’s climate goals, the organisation should include sustainability considerations in the procurement process and contract.
Standard contractual clauses relating to climate issues (often referred to as “coolerplate” clauses) can be used to ensure that the partner or sponsor is subject to legally binding obligations on sustainability. The inclusion of standard clauses on climate issues also encourages the parties to consider sustainability in their wider commercial conversations, flowing throughout the duration of the contract.
Standard clauses on climate issues might cover, among other things:
- General commitment from the sponsor or partner to reduce carbon footprint wherever possible when performing duties under the contract;
- Agreement for the sponsor or partner to take reasonable steps to achieve net zero targets / sustainability goals that have been agreed between the parties;
- Assurances on the sponsor’s or partner’s existing and historic climate performance; and
- Obligations for the sponsor or partner to report on climate performance and submit independent audits to the sports organisation to review; and
- Termination or suspensions rights if the partner or sponsor fails to comply with its sustainability obligations.
Structure of Sponsorship
In addition to the standard clauses on climate, sport organisations should also consider bespoke ways to structure their agreements sustainably.
Sport organisations should consider receiving non-cash benefits (known as “Value In Kind” or “VIK”) in addition, or as an alternative, to cash. VIK can work well for both parties, especially when budgets are tight. The sponsor or partner is able to obtain rights without needing to have the budget to pay for them in cash. The sport organisation is then able to obtain various benefits from the partner or sponsor, which can be aligned to their climate objectives.
Solar panels, EV charging, environmental consultancy services and renewable energy are all examples of sustainable benefits that could be offered by partners and sponsors for the rights, instead of cash. When dealing with VIK clauses, care should be taken to ensure that the deliverables are clearly defined, so both parties know exactly what is to be provided.
Sport organisations should also consider the duration and termination clauses, to avoid the organisation being tied into long-term deals with no exit option which, over time, may no longer be aligned to the organisation’s climate objectives.
Statements in Sport
Notably, the Principles set out in the UN’s Sports For Climate Framework include:
- Educate for climate action;
- Promote sustainable and responsible consumption; and
- Advocate for climate action through communication.
These principles demonstrate that, as well as focusing on their own climate impact, sport organisations can create a more sustainable future by using their platform to raise awareness for climate issues.
When negotiating sustainable partnerships and sponsorships, organisations should look to agree appearance and accessibility rights with the partner or sponsor, so they can work together to produce content promoting their work on climate issues.
Organisations can also use the profile of their athletes (who often have a far reaching and loyal following) to raise awareness for sustainability issues. Most player contracts, including the standard Premier League Player Contract, require the player to attend and participate in marketing and public relation events. Sport organisations could use these appearances to produce engaging content with their players on climate and sustainability issues.
Conversely, sports organisations should avoid using player appearance clauses to require their athletes to participate in appearances that conflict with their personal views. For example, Pat Cummings, Australia’s test cricket captain and a committed climate activist, decided not to feature in any promotional material for Alinta Energy during the final year of its multimillion dollar sponsorship deal with cricket Australia.
Climate issues are complex and can be difficult to navigate. As a result, sport organisations and athletes should ensure they educate themselves on the fundamentals of climate change, and seek specialist advice if needed, to help them use their platforms to make appropriate, accurate and current statements about climate issues.
How we can assist
Our Sports Team are able to advise on all aspects of sustainable governance, policies and agreements. For more information, please speak to Tom Barnard or Ted Powell.
With its ability to cut across race, gender, age, politics and other divisive characteristics, sports’ powerful platform can be used to raise awareness for climate change and champion sustainable behaviour.”
