AfterClimate, a research and consulting firm “on a mission to decarbonise the gaming industry,” this week released the findings of its “Net Zero 2022 Snapshot of the Gaming Industry,” a report that takes a detailed look at how Most of the world’s largest video game companies are responding to the impending climate crisis. The good news is that some are doing a lot of work! The bad news is that some are doing nothing, while others won’t even release their numbers.

The report was written by Dr. Ben Abraham of AfterClimate, author of the book Digital games after climate change. It basically takes a set of “net zero targets, ESG (Environment, Social & Governance) disclosures, and other sustainability programs and achievements” released by video game companies and tech giants with gaming interests and ranks them, assigning them to one of four categories based on how committed they are to limiting global warming to an increase of 1.5 degrees Celsius above pre-industrial levels.

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The first group, those doing the most work, are labeled as “Ambitious”. These are described by the report as:

Each of these companies (or their parent company) has set ambitious targets and presents compelling evidence that it has taken steps to actively reduce emissions. There is still a lot of work to be done to achieve these goals, but they are moving in the right direction.

These industry leaders are setting the pace and showing what kind of ambition and action is possible in the gaming industry.

Some of the companies that have earned this praise are Microsoft, Ubisoft, Apple, Google, The Embracer Group, Tencent and Riot.

After comes the “Base line” group, described as:

This group of companies is already acting, but without the same speed and urgency as those of the ambitious group. This is the minimum acceptable standard and can still be improved.

Among the companies in this rank are Sony, Activision Blizzard, Konami, Sega and Bandai Namco. As you can probably guess from the fact that we are already at the “minimum acceptable standard” and are only halfway there, the following is not enjoyable reading.

The third group are companies that need “Increase”.

These companies are increasingly aware of their environmental footprint, with some even taking experimental steps to reduce it, but have yet to set a target for net zero corporate emissions.

With strong leadership and careful planning, these companies could quickly jump the baseline and join the ambitious group.

The companies that need to catch up are Nintendo, EA, Take-Two, Zynga and NetEase. The fourth and last group are in the “Non-compliancebucket, the lower tier and the companies that absolutely need to do better

These are the gaming industry’s under-performers. These companies are exposing themselves to significant risk (physical and transition risk) from climate impacts, as well as threatening their brand integrity and social license to operate in an increasingly green world.

Sadly, some of these companies seem to have failed to consider the environmental impact of their operations at all. There is simply no excuse in 2022 to overlook ESG information. Stakeholders, investors and even gamers themselves are already starting to expect more.

Companies getting this down grade include Square Enix, Roblox, and Nexon. It’s important to note when naming, shaming (and praising!) all these folks that two of the biggest video game players on the market, Valve and Epic, can’t even be categorized as they release absolutely no data or information about their climate impact, nor did they promise to address it in the future.

It is this group below (and the two main absentees) who are by far the biggest concern, because there is such a gap between their actions (or lack thereof) and those above them. “My approach has always been ‘what actually has to happen? profound,” says Dr. Abraham Kotaku.

“The groupings themselves emerged somewhat organically from the net zero dates everyone had set, and really the difference between the top three groups (ambitious, grassroots and recovery) is mostly due to their net zero goals. The biggest gap is among those companies in the non-compliance group, because most of them have yet to start thinking about ESG factors. Bringing a corporate culture to the journey towards net zero and sustainability is a mammoth task, and it cannot be done overnight. It requires building buy-in from the top down of the organization.

Dr Abraham thinks the margins are so close that many of the second and third group companies could be at the top within the next year, including Sony, which just pushed the date for achieving net-zero emissions by a decade. Which is much harder to achieve for a company like Sony, which also makes millions of physical products, than some of the software-only game companies mentioned elsewhere in the report.

This graph from the report shows that a company's size (by number of employees) doesn't have to match how fast they're trying to decarbonise.

This graph from the report shows that a company’s size (by number of employees) doesn’t have to match how fast they’re trying to decarbonise.

It is important to note that what is contained in this report is only a general and general picture, which is already outdated (as it is based on data from 2021) and which cannot take into account the progress that some companies have made since then.

An example of this is the changes Microsoft and Nintendo have made to their supply chain, which had previously been outside the margins of most of the company’s environmental commitments. “Some of the good news can be found in the deals that big companies get any vendor (usually a slightly smaller company) that works for them to sign,” says Dr. Abraham. “Think about how Foxconn makes iPhones or game developers making (or working on) games for another developer: Huge amounts of work in the Gamedev Triple A space are done on a contract basis. For example, you might get some 3D environmental artwork made by a team in China. So these supply chain policies set expectations for those companies’ standards of behavior – usually covering basics like ‘don’t break the law’, ‘treating employees fairly’ but increasingly we are seeing them used as well to get these companies to measure and take action to reduce their greenhouse gas emissions. So Sony has one that does this now, Nintendo has one with an environmental focus (probably for companies that make Switches), Microsoft has a really strong one that I just heard about the other day that doesn’t allow companies to use purchased offsets to achieve net zero. All good stuff.”

“What’s exciting is that it can potentially have a cascading effect and spread throughout the industry,” says Dr. Abraham. “For example, Sony’s supplier code of conduct requires the companies it works with to also ask their suppliers to accept and comply with Sony’s supply chain code of conduct. So you can imagine how far that sort of thing could spread. Who in the gaming industry is more than 2 degrees apart from Sony? Not many, I guess! It’s the space to watch in the coming year, I think, and this is where game developers will likely be caught off guard. Because at some point if you want to sell games on PS or Xbox you have to be carbon neutral or there could be consequences.

While there’s a lot to commend here, especially from larger companies like Microsoft, I was also curious about the possibility of corporate backlash, with a report like this specifically highlighting someone’s performance on a specific and very important topic. , potentially damaging a company’s reputation.

“I think there is some insecurity about these issues at some of the companies included in the snapshot, and not just those who currently treat ESG as a joke,” says Dr. Abraham. “The explanation I’ve heard is that a lot of companies just aren’t sure what to do — they’re all in a learning process and this journey to net zero, trying to figure out what that really means. I try to be fair but firm in my assessments, so I expect not everyone will agree with them, or say I’m not considering everything I might, but ultimately my loyalty is first and foremost to the planet. I keep saying it because it’s true: we must become partisans of what is necessary, not just what is possible. I hope the snapshot tells the industry a few things it didn’t know before, encourages those who need encouragement, and points out the latecomers who perhaps need to reinforce the point for them that corporate sustainability is not an optional extra on a planet that it is rapidly warming up. Investors, gaming industry workers, gamers and the press will be demanding more. There are real consequences to ignoring these things.

To that end, AfterClimate is encouraging more employees and companies to help shape next year’s report. And if you’d like to read this year’s report, you can find it here, along with links to a spreadsheet containing the full set of data used to generate it.

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