Quick update on European sustainability reporting & what’s new at the SGA

One of the main reasons the SGA exists is to help make life easier for the European games industry and its reporting obligations under the CSRD. This means understanding and implementing the European Sustainability Reporting Standards (ESRS). I’ve written about how complex I find this system and how ambivalent I am about it previously, but (for a few different reasons) I’ve not really had the time to sit down and write out something approaching a guide for those actually doing it, as a game company.

Well, I’ve started it, and the first part – an high level overview of the whole process, and a detailed guide to the first “stage”, is now up on the SGA website here. I’ve divided the process into 5 Stages – even though the ESRS doesn’t make any formal suggestions about the order of things one should do things in. It really is just a mind-bending complex series of rules and requirements and implementers are expected to read it and just somehow make-do. (There is also EFRAG, which helps but they’re almost as bad) There’s also heaps of “guides” from big consultants and software platforms trying to sell you their solutions, but I’ve never really found them detailed enough, and they’re definitely not specific enough for this weird mix of software and art that is game making. So what we’re calling the ESRS Roadmap aims to fill that gap.

Stage 1 is all about familiarisation – getting report preparers used to a few of the particular concepts new and old that the ESRS introduces (or expands the definition of) and their many, many nuances. I’ve done a few illustrations to go with these explanations, like the one at the top of this post that tries to show the typical groupings of potential “stakeholders” that the ESRS now requires reporting companies to consider from a “double materiality” perspective. This means thinking about them from the perspective of “how are we impacting on them?” as well as “how are they impacting on us?” And not just actually impacting, it’s also potential impacts or risks into the future.

It’s not all negative though, it’s also about opportunities as well. For instance, perhaps there are amazing decarbonisation opportunities within your game through energy efficiency (like eco modes!), or the opportunity to be part of the development of an industry-wide GHG emissions standard for for games. Does anyone know of something like that?

By the end of Feb, we should have a content-complete version of the ESRS Roadmap up on the SGA website as well as links to resources and templates that we’ve developed and iterated on through feedback from SGA members who are already going through this seriously involved process. I think this has the potential to be a useful resource for the European games industry.

Another awesome bit of news is that we’ve secured some government funding, with Business Finland agreeing to put in for half the operational costs of the SGA for the next year, and perhaps even longer. They see the value in enabling industries to work out how to implement sustainability for themselves and recognise that the SGA is a great vehicle to do it.

But here’s the catch – we need to show that the games industry is ready to do its part as well. We need to show that we have the membership base to pull off this task and that the games industry also sees the value in it, and is willing to put the effort in to make the organisation financially self-sustaining (or prove that it at least eventually could be). We only get this amazing funding if we can show we have member contributions to the tune €100K in the bank by the end of March.

So we’re now on deadline – which, as terrifying as it is to have so much riding on a deadline, I actually think is maybe a little bit of a good thing. Either the games industry sees the value in what we’re doing, and helps to make it happen, or it doesn’t. Do games need an independently governed, cooperatively owned organisation to undertake this process of solving the technical and political questions around GHG emissions methodologies, boundary setting, data collecting, accounting and attribution or… not? Do games need a constantly updating and improving series of methodologies for measuring, attributing, and intervening in their climate impact… or not?

If not, then the expertise that many of the largest game companies in the world have developed – the talented ESG reporting experts they’ve cultivated – all that knowledge stays locked inside individual companies. And if everyone decides to go it alone in trying to solve this labyrinthine puzzle that is the ESRS, then individual developers end up paying through the nose for consultants, for however many years into the future.

So here’s what you can do – if you have been thinking about joining the SGA, get in touch, and join before March. If you know the leadership team of a games studio (big, small, whatever!) who has been asking questions like “What can we do about climate change?” or “What sort of environmental impacts are our AI tools having?” put them in touch with us. Not only do we have a real, achievable timeline for developing the SGA GHG Standard this year – starting with gameplay emissions from mobile, console and PC – but we have so much more planned that will help move everyone in the direction of verifiable climate action. We are going to find some incredibly exciting approaches to reduce the impact that gaming has on the planet, but we can’t reduce what we can’t see, and we need consistent, clear methods that everyone can use to enable it.

The ESRS has a big section in it all about sector averages and benchmarking – one of the goals of the ESRS is to enable comparability between companies so that, at long last, the true sustainability leaders become clear, and their efforts recognised. In a post this week about their CSRD journey Wooga’s Comms Director said it was harder than it needed to be because “the absence of industry benchmarks certainly made the rating process more difficult, underscoring the need for collaborative efforts to establish shared standards”.

There have been some suggestions of potential “amendments” to the three main pieces of legislation that govern the EU’s corporate sustainability approach - and I think some are even assuming that it will water down reporting requirements. I think this is a huge risk, and is playing with fire. Civil society does not want the legislation watered down. The ESRS itself is – as a piece of delegated legislation, created mainly by pointy-headed EU technocrats, is agonisingly complex in a way that I genuinely – genuinely – suspect defies the ability to make simple changes without introducing further confusion and uncertainty. Amendments to the ESRS at this stage would be hideously complex. As a result, proposed amendments would (I suspect) only affect timelines, rather than the substance of what needs to be contained in reports.

Okay I’ve gone on long enough for a supposedly “quick update”!

tl;dr –

• Go read the new ESRS Roadmap if you want to get a feel for what is involved in reporting - or if you’re wondering whether it can wait (!)
• Check out our “Introduction to the SGA for prospective members” deck if you want to know more about what else we do, or reach out to us via email.
• And finally, join the SGA if you can! Or tell someone about us if you can’t.

We have never been closer to making this thing a reality, but it only happens if we make it happen.