Sportech PLC

Climate Impact & Sustainability Data (2016, 2017, 2018, 2021)

Reporting Period: 2016

Environmental Metrics

Total Carbon Emissions:6,022 metric tonnes

Carbon Intensity:61.1 (2016)

ESG Focus Areas

Responsible gambling
Community investment
Environmental practice
Employee well-being
Human rights

Environmental Achievements

Reduced CO2 emissions intensity by 14.6% due to reduced use of natural gas, electricity, and motor fuel.

Social Achievements

Bump 50:50 raised $8.6m for sports foundations in the US and Canada.
Contributed nearly £0.5m to GambleAware in the UK.
Contributed over £0.1m annually to promote responsible gambling in Connecticut.
44% of workforce are female, 33% of senior management are female.

Governance Achievements

Board restructured to include relevant industry experience.
Implemented significant operational and technological change in The Football Pools.

Climate Goals & Targets

Environmental Challenges

Decline in popularity of traditional football pools betting and US horseracing pools betting.
Competition from unlicensed illegal internet operators in Connecticut.
Decline in industry handle across the US impacting Connecticut retail business.
Tough trading period in the second half of 2015 for Digital services business.

Mitigation Strategies

Modernising business and expanding product base (Football Pools).
Investing in venues in Connecticut and California with a sports bar concept.
Investing in new and innovative products.
Securing new customers including Penn National Gaming (Digital services).
Seeking support from the State of Connecticut to actively protect the terms of its licence.

Supply Chain Management

Responsible Procurement

Encouraging environmentally friendly suppliers.

Climate-Related Risks & Opportunities

Reporting Period: 2017

Environmental Metrics

ESG Focus Areas

Environment
Social
Governance

Environmental Achievements

Reduced paper consumption through technology
Recycled or disposed of waste materials responsibly

Social Achievements

Bump 50:50 raised nearly $11 million for sports foundations
Launched a bi-monthly employee newsletter and awards program
Committed to equality of opportunity and dignity at work

Governance Achievements

Complied with the UK Corporate Governance Code (with some exceptions noted in the report)
Established risk appetite statement and risk register
Implemented a whistleblowing policy

Climate Goals & Targets

Long-term Goals:

Long-term sustained earnings growth and value creation from technology and business investments

Medium-term Goals:

Expand Venues network in Connecticut to 24 locations
Continued aggressive customer acquisition for Bump 50:50
Diversification into new forms of gaming, including sports wagering

Short-term Goals:

Recruit experienced F&B and Group Sales expertise for Bobby V’s Stamford
Implement renewed digital marketing plan to combat out-of-state ADW operators
Secure a Sportsbook partner in anticipation of regulatory easing

Environmental Challenges

Aging demographic in horseracing leading to revenue declines
Technological changes requiring adaptation of products to mobile devices
Competition for gambling revenues from casino openings and out-of-state digital ADW operators
Illegal competition from unlicensed internet betting operators
Potential negative impact from US Supreme Court repealing PASPA if not adequately prepared

Mitigation Strategies

Innovation and refreshing of products
Development of mobile applications and self-service betting terminals
Lobbying for stricter enforcement of laws against illegal competition
Aggressive marketing and customer rebate programs
Strategic review and Formal Sale Process to streamline operations
Seeking partnerships to expand into new markets
Evaluating a change in reporting currency to USD
Proactive campaign with Connecticut General Assembly for sports betting license

Supply Chain Management

Responsible Procurement

Encouraging environmentally friendly suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code

Third-party Assurance: PricewaterhouseCoopers LLP

Reporting Period: 2018

Environmental Metrics

Total Carbon Emissions:6,510 tonnes of CO2

Carbon Intensity:102.2 (tCO2e/£m revenue)

ESG Focus Areas

Responsible gaming
Environmental impact (energy and paper consumption)
Employee equality and wellbeing
Compliance and integrity

Environmental Achievements

Reduced paper consumption through technology adoption
Implemented online voting for company meetings to reduce paper usage

Social Achievements

Bump 50:50 raised US$17 million for sports foundations
Launched employee newsletter and awards program
Provided almost US$220,000 to responsible gaming agencies

Governance Achievements

Ensured compliance with GDPR rules
Implemented robust data protection policies and staff training

Climate Goals & Targets

Medium-term Goals:

Expand into new markets and diversify revenue streams
Further develop digital initiatives and mobile-first strategy

Short-term Goals:

Roll out strengthened responsible gaming program
Secure sports betting license in Connecticut

Environmental Challenges

Decline in wagering revenues due to weather, race card quality, and competition
Competition from unlicensed out-of-state ADW operators
Challenges in maintaining growth in horserace wagering
Regulatory compliance across multiple jurisdictions
Maintaining competitiveness in technology products

Mitigation Strategies

Cost-saving measures (renegotiating leases, exploring freehold estate options)
Seeking alternative international products to replace greyhound racing
Campaigning for sports betting license in Connecticut
Investing in technology and digital development (Lot.to acquisition)
Developing new sports betting products and mobile applications
Strengthening responsible gaming policies and procedures

Supply Chain Management

Responsible Procurement

Encouraging environmentally friendly suppliers

Climate-Related Risks & Opportunities

Reporting Period: 2021

Environmental Metrics

Total Carbon Emissions:2,402 tonnes CO2e (Scope 2)

Scope 2 Emissions:2,402 tonnes CO2e

Carbon Intensity:104.7 tonnes CO2e per £m of sales (2021)

ESG Focus Areas

Environment
Social
Governance

Environmental Achievements

Reduced carbon footprint from travel due to increased remote work during the COVID-19 pandemic.
Increased use of online voting at company meetings, reducing paper consumption.

Social Achievements

Provided necessary accommodations to protect workers during the COVID-19 pandemic, including remote work, enhanced cleaning, hygiene products, and PPE.
Continued to provide furloughed US workers with health benefits and HR support in accessing government resources.

Governance Achievements

Successfully completed the sale of Global Tote, Bump 50:50, and the LEIDSA contract, generating significant cash.
Moved its London Stock Exchange listing from the Main Market to AIM.
Returned £35.5m of cash to investors through a tender offer.

Climate Goals & Targets

Medium-term Goals:

Move to net cash generation in 2023.

Short-term Goals:

Recover from the pandemic's impact on Venues business and achieve EBITDA positivity in 2022.

Environmental Challenges

COVID-19 pandemic impacted business operations, particularly the Venues business.
Failure to obtain a full sports betting license in Connecticut.
Decline in horserace wagering revenue in Connecticut.

Mitigation Strategies

Implemented cost reduction measures to safeguard the Group and improve operational efficiency.
Secured a 10-year contract with the Connecticut Lottery Corporation to offer sports betting in venues.
Monitoring the impact of sports betting on pari-mutuel revenues and introducing techniques to upsell pari-mutuel products.
Exploring non-gambling opportunities to leverage venues operations.