WEBVTT

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The Unique ESG Approach in the Gaming Industry

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Hello, I'm Sung-hoo Moon

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Today, I'll talk about the unique ESG approach in the gaming industry

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Defining ESG and Sustainable Development

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Before ESG

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let's start by looking at what sustainable development is

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Sustainable Development

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We often talk about this

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but what really is sustainable development?

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Sustainable development

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first appeared in a UN report

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called Our Common Future

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that was published in 1987

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According to it, sustainable development

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meets the needs of the present

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without compromising the ability of future generations

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Here, the act of compromising

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is done by the present generation

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Meanwhile, the current generation meets their own needs

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That's how they define sustainable development

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Let me repeat

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The development that meets the needs of the present

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without compromising the ability of future generations

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to meet their own needs

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That is sustainable development

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When we talk about sustainable development

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we often talk about the future generation

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This is because, only when the current generation

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sustains the present, not compromising the environment or resource

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of the future generation, they can also continue the cycle

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and be sustainable

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So sustainable development

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has been a major focus for the future generation

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At the UN, our proud BTS

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talked about sustainable development and the future

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The Sustainable Development Goals (SDGs)

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are the goals announced by UN in 2015

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These goals are divided into 17 categories

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Let's take a look at them

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First is No Poverty

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Two, Zero Hunger

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Three, Good Health and Well-being

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Four, Quality Education

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Five, Gender Equality

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Six, Clean Water and Sanitation

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Seven, Affordable and Clean Energy

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Eight, Decent Work and Economic Growth

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Nine, Industry, Innovation, and Infrastructure

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Ten, Reduced Inequality

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Eleven, Sustainable Cities and Communities

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Twelve, Responsible Consumption and Production

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Thirteen, Climate Action

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Fourteen, Life Below Water

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Fifteen, Life on Land

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Sixteen, Peace, Justice, and Strong Institutions

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Seventeen, Partnerships

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for the Goals

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When these 17 goals a re fulfilled

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it achieves the SDGs

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The result of which

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is the sustainable humanity

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The official advocate of the SDGs

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is BLACKPINK from South Korea

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BLACKPINK and BTS

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talk about the sustainable development at the UN

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And they're doing a great job promoting the UN's sustainable development goals

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Because they are the future generation

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they promote the sustainable development goals

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that the UN is urging for globally

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They're also encouraging people to take action

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17 years later, in 2004

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UN publishes another report

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The title of the report

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was Who Cares Wins

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This report is where they talk about ESG for the first time

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ESG stands for

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Environmental, Social, and Governance

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Let's pause and think about it

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We know that ESG stands for environmental

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social, and governance

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But why the adjective?

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Why environmental, social and governance?

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All three concepts can be interpreted

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as relating to governance

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So why the adjectives?

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Here's the original phrase

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In the original report

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after these three words

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the word issue follows

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So while we talk about ESG a lot

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but they are followed by issue

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meaning a problem to solve

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Therefore, ESG is not some simple

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even ethical virtue

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ESG is an issue for the industry and the community

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It is a problem to solve

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Even now, ESG yields a lot of issues

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and many problems to solve

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If you ever study ESG or apply it to your business

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please remember that the word ESG

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started as an issue to be resolved

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When one runs a business

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there are people called stakeholders

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Stakeholders are further categorized to five groups

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Society, partners, investors, customers, and employees

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Who are the stakeholders?

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They are either impacted by, or influences

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the management performance of a company

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organization, or enterprise

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Does the society influence the performance of the company? Of course

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The society includes the government, for example

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The government does influence the company's business

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Simultaneously, companies influence governments, society, and municipalities

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How do they achieve this?

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By paying taxes

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Partners influence the company's quality by a lot

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Similarly, the company impacts their growth

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Investors, the company influences the profits

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earned by the investors

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They also influence the company

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based on their investment amount

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Customer, of course

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The more customers, the more profit the company earns

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The less, the less profit for the company

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Inversely, the customers can experience a high-quality service

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and product produced by the company

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And that could improve the quality of their lives

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Next, employee

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The employees are surely impacted by the performance of the company

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Also, based on their performances

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the company's performance may vary

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In this sense, the employee and the employer exchange performance

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and influence

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These are the representative five groups of stakeholders

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Society, partner, investor, customer, and employee

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ESG is a management value and strategy

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that emphasizes the importance of stakeholders

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and seeks to grow together with them

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Importance of ESG and Its Relation to Games

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Is ESG actually important?

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Global consulting firm McKinsey

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released a report

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Let's start with the word externality

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What is externality?

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It is where the actions of one economic entity

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have a positive or negative impact on another economic entity

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yet no monetary transaction

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compensation, or payment is made for it

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In other words, if the company

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generate profits when it negatively impacts

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other stakeholders or economic entities without offering compensation

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externalities arise

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If a company creates externalities

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without proper accountability

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it risks losing its social license

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meaning it can't sustain itself anymore

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ESG is important

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because it eliminates these externalities

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and fosters mutual growth with various economic entities

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that affect and are affected by the company's performance

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It also aligns with the core value

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of growing together with stakeholders

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This McKinsey report claims

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that ESG will never disappear

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In other words, ESG

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tells companies, organizations, and business owners

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to act as both top achievers and model citizens

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In the past, companies avoided criticism

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as long as they made money

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But today, ESG demands

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that companies not only generate revenue and profits

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but also fulfill social and environmental responsibilities

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as the model students

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ESG is closely linked to innovation

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Why is that?

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The logic of ESG challenges

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traditional management strategies and practices

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In the past, companies simply needed to earn money

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despite minor issues arising in the process

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As long as they achieve something

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and investors are compensated

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there was no problem for them

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However, ESG goes beyond financial performances

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ESG requires that companies

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address social and environmental responsibilities

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while ensuring transparency in decision-making

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ESG monitors and requires all of this

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Therefore

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the business owners who are accustomed

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to old business models are confused by it

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Up until now, they just needed to make money and be a good student

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Nothing much else mattered

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However, ESG has introduced new requirements

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where companies must balance revenue generation with accountability

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The principles of management has changed

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The business strategy has changed

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What should businesses do now?

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For the new era of ESG

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they are now responsible for both performance and accountability

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To achieve these ESG goals

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companies have only one option

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It is innovation

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As I already mentioned

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the UN's SDGs emphasize innovation

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It claims that without innovative management and progress

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humanity cannot achieve sustainable development

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ESG has transformed the principles of management

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In this new principle

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businesses must adopt ESG-aligned innovations

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These innovations impact various industries

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including the gaming industry

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In the gaming industry, ESG values

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and performances are making great contributions

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Due to climate change, industries worldwide

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are required to reduce greenhouse gas emissions

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and energy consumption

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This has led all businesses to directly respond

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to their influence on climate and environment

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In particular, video game, media, and entertainment companies

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require a lot of energy

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for their powerful computers, fast internet

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and cloud-based technologies

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Therefore, to secure this much energy

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video game, media, and entertainment companies

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now need to explore alternative solutions

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A study has estimated that gaming worldwide

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consumes as much energy as 50 million cars

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According to the UN Environment Programme, gaming consoles and computers

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contribute to 50 million tons of electronic waste annually

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with only 20% being recycled

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Case Studies: ESG Practices in Gaming Companies

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Let's not talk about

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how major gaming companies

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are already implementing responsible ESG practices

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First is Activision Blizzard

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In its ESG report

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is highlights several initiatives

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First is talent development

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In this category

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they set a target to increase the percentage

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of female and non-binary employees by 50% over five years from 2021

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To achieve this, they have invested $250 million

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in providing opportunities to diverse talent

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It also appointed executives responsible

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for diversity, equity, and inclusion for the first time

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They also appointed an inclusive game design director

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so that games reflect characters and stories

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from various backgrounds

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Second is the actions on the environmental front

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Activision Blizzard set an ambitious goal

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of achieving carbon neutrality by 2050

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They transitioned 61% of its energy consumption in data center and offices

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to renewable energy in 2022

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Next, let's look at Take-Two

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Take-Two focuses on diversity and inclusion

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for its employee welfare and industry

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For sustainable game development, they optimize resource usage

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They're also actively improving their data center efficiency

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to protect the environment

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In addition, they are investing in various programs

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promoting equity and diversity among employees and communities

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Finally, let's look at the ESG strategies by Sony

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Sony is very active

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in its ESG activities in the gaming industry

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First, its environmental goal by 2050

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is to reduce greenhouse gas emissions to zero

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called Road to Zero

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In 2022, they expanded the use of renewable energy

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As for social responsibility

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they've undertaken projects to enhance

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the accessibility and inclusiveness of the gaming content

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This enables players from diverse backgrounds

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to enjoy the products

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produced by the company

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Three, they also focus on sustainable product development

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They promote eco-friendly designs

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They're also reducing plastic usage

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in product packaging

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The case of Forbidden West by Sony is interesting

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This game is set in the 31st-century western region of Earth

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where humanity and ecosystems are recovering

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after a collapse caused by conflicts with mechanical creatures

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By addressing ESG-related themes

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this game narrates the journey

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of environmental restoration

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In conclusion, these gaming companies

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demonstrate their commitment to addressing environmental

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and social challenges through their ESG efforts

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fostering a more inclusive and sustainable corporate culture

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These actions show hoe the gaming industry

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can contribute to building a better world

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As digital content creators

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I invite you to consider

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how you can contribute to ESG initiatives

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Thank you

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Defining ESG and Sustainable Development

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Sustainable Development
Progress that does not compromise the ability

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of future generations to meet their own needs

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ESG
ESG started as an issue to be resolved

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It's now a management value and strategy for growth alongside stakeholders

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Importance of ESG and Its Relation to Games

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Why ESG Matters
Eliminates corporate externalities
Enables mutual coexistence among stakeholders

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ESG and the Gaming Industry

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The gaming and entertainment industries

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require significant energy for computers, internet and cloud-based technologies

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They contribute to 50 million tons of e-waste annually, with only 20% recycled

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Case Studies of ESG Practices in Gaming Companies

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Activision Blizzard

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Talent Development
More women and non-binary employees, executives responsible for diversity, equity, and inclusion

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Inclusive game design director

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Environmental Protection
Transition 61% of energy used in data centers and offices to renewable energy sources

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Take-Two (T2)
Optimized resource usage for sustainable game development

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Improved data center efficiency

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Invested in programs promoting equity and diversity
among employees and communities

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Sony
Road to Zero, to achieve carbon neutrality by 2050

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Launched projects to enhance accessibility and inclusivity in gaming content

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Promoted eco-friendly designs and reduced plastic use in packaging