Flutter Review - ESG and Sustainability Performance (2024)

ESG Summary

Transparency			Flutter Entertainment scores a 5 for transparency, with comprehensive and detailed insights provided through sustainability reporting and governance practices.
ESG Strategy			The company earns a 4 for its robust ESG strategy, with initiatives like the “Positive Impact Plan” reflecting a commitment to responsible gaming and diversity.
Sanctions			Flutter’s score is 2, reflecting challenges with past regulatory fines. However, its proactive approach and improvements indicate a positive trajectory.
3rd Party Rating			With a score of 4, Flutter Entertainment maintains a positive public reputation and has received industry recognition for its efforts.

Company Overview

About the Company

Founded in 2001, Flutter Entertainment PLC (formerly Paddy Power Betfair), headquartered in Dublin, Ireland, is a global leader in the online sports betting and gaming industry. Operating some of the most recognizable brands such as Betfair, Paddy Power, and FanDuel, Flutter has a significant presence in key markets worldwide.

Licensed in multiple jurisdictions, including the UK, Ireland, Australia, and the US, Flutter plays a pivotal role in the economies where it operates, contributing substantial tax revenues and creating thousands of jobs. With a strong emphasis on ESG principles, Flutter has achieved a notable 80% ESG ranking percentile among 32,244 companies assessed by CSR Hub, underscoring its commitment to sustainability and responsible business practices.

As a publicly traded entity on the London Stock Exchange and a component of the FTSE 100 Index, Flutter Entertainment is committed to transparency, sustainability, and responsible business practices. According to its 2023 Annual Report, the major shareholders include:

• Capital Research & Management Co.
• Caledonia (Private) Investments Pty Limited
• Parvus Asset Management Europe Limited
• BlackRock Inc.

Key Performance Indicator (KPI) Ratings

Key Performance Indicators (KPIs) for Flutter Entertainment PLC based on the Full-Year Results for the fiscal year ending 31 December 2023.

Financial Metrics Table

Flutter Entertainment PLC, a global leader in the online betting and gaming industry, demonstrated robust financial performance in the fiscal year ending December 31, 2023. With reported Group revenue of $11.8 billion and an improved Adjusted EBITDA of $1.7 billion, the company experienced significant growth driven by its strategic expansion efforts and technological innovations. Notably, Flutter’s proactive approach to customer engagement, market expansion, and regulatory compliance has solidified its position as a key player in the industry​

ESG Overview

In this section, we explore the Environmental, Social, and Governance (ESG) practices of Flutter Entertainment. Understanding a company’s ESG commitments is crucial for investors, stakeholders, and the general public to assess its impact on the environment, society, and governance structures. We delve into Flutter Entertainment’s initiatives, strategies, and performance in these key areas, shedding light on its sustainability efforts and social responsibility. To learn more about ESG in the context of the igaming industry, read our post Understanding ESG and iGaming.

ESG Strategy

Flutter Entertainment’s robust ESG strategy, anchored by its Positive Impact Plan, targets net zero carbon emissions by 2035, with interim goals of reducing Scope 1 and 2 GHG emissions by 45% by 2030. The company’s “Play Well” strategy promotes responsible gambling, aiming for 75% of customers to use at least one tool by 2030, supported by increased investment and innovative tools like Real Time Intervention. Commitment to diversity and inclusion is evident through goals such as having 40% of leadership roles held by women by 2026 and initiatives like the Global Advocacy Programme. Governance is reinforced by stringent policies and oversight committees, ensuring sustainable and inclusive growth across all operations​

Environmental Impact

In this section, we delve into the company’s efforts towards environmental sustainability and its initiatives to reduce its carbon footprint. To learn more, read our post about the about the environmental pillar of ESG in the context of iGaming.

Environmental Performance

Emissions

Flutter Entertainment is dedicated to minimizing its environmental footprint, with a strong focus on reducing carbon emissions across its operations. The company has set ambitious targets to achieve net zero carbon emissions by 2035, demonstrating a steadfast commitment to sustainability and climate action. To achieve this goal, Flutter has identified key areas of focus:

• Commitment:
  • Flutter Entertainment is dedicated to achieving net zero carbon emissions by 2035.
  • The company has set interim targets to ensure progress towards this goal, including significant reductions in Scope 1, 2, and 3 emissions.
• Total Emissions (2023):
  • The total emissions for 2023 were approximately 487,220 metric tons of carbon dioxide equivalent (tCO2e), encompassing Scope 1, 2, and 3 emissions.
  • The increase in emissions was primarily driven by business expansion and increased operational activities.
• Scope 1 Emissions:
  • These include direct emissions from sources owned or controlled by Flutter, such as company vehicles and onsite fuel combustion.
  • In 2023, Scope 1 emissions totaled 4,518 tCO2e.
  • Strategies to reduce these emissions include efficiency improvements and the adoption of alternative energy sources.
• Scope 2 Emissions:
  • Scope 2 emissions are derived from purchased electricity, heating, and cooling.
  • For 2023, Scope 2 emissions were reported as zero due to the purchase of Energy Attribute Certificates (EACs), which equated to 9,200 MWh of renewable energy.
  • This demonstrates Flutter’s commitment to sourcing renewable energy and reducing its indirect emissions.
• Scope 3 Emissions:
  • Scope 3 emissions account for about 99% of Flutter’s total carbon footprint.
  • These emissions include those from the supply chain, business travel, and purchased goods and services.
  • Managing and reducing Scope 3 emissions is a significant focus for Flutter, given their substantial impact on the overall emissions profile.
• Emission Reduction Targets:
  • Flutter aims to reduce absolute Scope 1 and 2 GHG emissions by 45% by 2030 from a 2022 base year.
  • The company has also set a target to achieve a 90% reduction in Scope 1 and 2 GHG emissions by 2035.
  • These targets align with the Science-Based Target Initiative (SBTi) and are pending validation.
• Supplier Engagement:
  • Recognizing the importance of supply chain emissions, Flutter is working closely with its suppliers to encourage emission reduction initiatives.
  • The company aims to collaborate with suppliers committed to sustainable practices, with a goal to allocate a significant portion of its procurement budget to such suppliers by 2025.
  • To enhance environmental reporting and performance tracking, Flutter is implementing comprehensive data management systems, including Salesforce Net Zero Cloud and the EcoVadis platform, to streamline environmental data management and supplier engagement on sustainability​.

Social Performance

In this section, we explore the company’s initiatives related to social responsibility, employee engagement, and community involvement. To learn more, read our post about the social pillar in relation the iGaming industry.

Social Impact

Internal Social Initiatives

• Employee Well-being Programs: Flutter values its employees and supports their well-being through comprehensive programs, including mental health support, wellness activities, and access to health resources. In 2023, the company introduced the “OnHand” app to make volunteering easier and saw nearly 2,000 employees volunteer for various activities. This initiative contributed significantly to community development and demonstrated a high level of employee engagement and satisfaction.
• Diversity and Inclusion: Flutter is committed to fostering a diverse and inclusive workplace. In 2023, the company’s workforce included over 23,000 employees from more than 90 nationalities. Initiatives such as the Global Advocacy Programme and the Gender Affirmation Policy in Australia highlight Flutter’s dedication to inclusivity. The company also introduced training and development programs to support career growth, with a particular focus on underrepresented groups.
• Training and Development: Flutter invests heavily in employee training and development. In 2023, over 5,000 hours of training were provided globally, focusing on professional development, mentorship, and continuous learning. Specific programs like the Career Management for Women and Inclusive Leadership Program aimed to enhance skills and career prospects for female employees and other minority groups.

Community Engagement

Flutter actively engages with local communities through various corporate social responsibility (CSR) initiatives and community outreach programs. The company aims to make a positive impact beyond its business operations and contribute to the well-being of the communities where it operates. Community engagement efforts include:

• Charitable Donations: In 2023, Flutter contributed over £8.3 million to more than 300 causes worldwide, improving the lives of an estimated 1.1 million people. This marks an increase of 181% from 2022. Significant initiatives included partnerships with The Tour 21 – Cure Leukaemia and International Mixed Ability Sports, as well as disaster and emergency relief efforts.
• Volunteer Programs: Flutter encourages its employees to engage in community service by offering paid time off for volunteering. In 2023, the company’s employees volunteered over 10,000 hours in activities such as community clean-ups, food drives, and mentoring programs. The introduction of the “OnHand” app facilitated employee participation in local community projects.

Responsible Marketing

Flutter adheres to responsible marketing practices to ensure ethical and transparent communication with its customers. The company promotes responsible gambling and consumer protection through its marketing campaigns. Responsible marketing initiatives include:

• Promoting Responsible Gambling: Flutter promotes responsible gambling through its “Play Well” strategy, which includes tools like deposit limits, activity statements, and time-out facilities. In 2023, the company invested £81 million in responsible gambling measures and saw a 10.6% increase in the use of safer gambling tools among active online players.
• Consumer Protection: The company ensures its marketing materials are transparent and compliant with regulatory guidelines. Flutter’s responsible marketing practices include clear communication of terms and conditions, age verification checks, and promoting responsible gambling messages to build trust with customers.

Employee Feedback

• Internal Surveys: Flutter conducts regular employee surveys to assess satisfaction levels and gather feedback on workplace culture. In 2023, these surveys revealed a high level of employee engagement with an overall satisfaction rate of 78%.
• Open-Door Policy: Flutter maintains an open-door policy, encouraging employees to share their ideas, concerns, and suggestions with management. This fosters an environment of open communication and collaboration.
• Performance Reviews: The company conducts performance reviews to provide feedback to employees and support their professional development. In 2023, over 2,000 performance reviews were conducted globally, contributing to employee growth and career advancement.
• Glassdoor Ratings: With a Glassdoor rating of 4.0 out of 5 stars and an 85% recommendation rate, Flutter receives positive feedback from employees, reflecting a generally favorable perception of the company’s workplace culture, leadership, and opportunities for professional growth.

Overall, Flutter’s social impact initiatives, both internal and external, highlight its commitment to promoting employee well-being, supporting local communities, and fostering a positive workplace culture. By implementing these initiatives, Flutter not only provides opportunities for personal and professional growth for its employees but also encourages them to make meaningful contributions to society .

Governance and Compliance

For any organization, governance forms the backbone of its operations, shaping its transparency, integrity, and regulatory compliance. It encompasses the structures and processes through which companies are directed and controlled. To delve deeper, read our post on the governance pillar of ESG within the iGaming industry.

Governmental Performance

Flutter Entertainment plc upholds stringent governmental performance standards, frameworks, and policies to ensure responsible and transparent corporate governance. These frameworks are designed to align with regulatory requirements and promote ethical business practices.

Frameworks & Policies:

• Corporate Governance Policies: Flutter Entertainment maintains regular updates on legal, regulatory, and governance enhancements. The company ensures compliance with the UK Gambling Act Review and other market regulations, and routinely reviews and approves key governance policies and frameworks​.
• Diversity and Inclusion Policies: The company actively monitors diversity targets and initiatives across the organization, ensuring diversity in Board composition and senior management roles​
• Safer Gambling Policies: Implementation of safer gambling initiatives and compliance measures is a key focus. Flutter regularly responds to regulatory changes and conducts ongoing evaluations of these policies​.
• Financial Policies: Flutter ensures sound financial management and oversight of its capital structure, approving major financial decisions and investment strategies to maintain financial health and transparency.

Organizational Setup:

• Chair (Gary McGann): Leads the Board, ensuring effective governance, overseeing strategic direction, and facilitating stakeholder engagement and awareness​​.
• Chief Executive Officer (Peter Jackson): Guides strategic development and innovation, holds overall responsibility for Group performance, and leads the Executive Committee and operational management​​.
• Chief Financial Officer (Paul Edgecliffe-Johnson): Manages financial affairs, supports strategic objectives, proposes sound financial policies, leads M&A activities, and is responsible for investor relations and financial reporting​​.

Oversight:

• Non-Executive Directors: Provide external perspective, advice, and challenge decisions constructively. They scrutinize management performance, review financial information, and ensure the system of internal control and risk management framework is appropriate and effective​​.
• Senior Independent Director (Holly Keller Koeppel): Acts as a liaison with shareholders in key matters, leads the Chair’s performance review, and offers support​​.

Committees:

• Audit Committee: Ensures financial reporting integrity and risk management, reviews internal controls, and evaluates external audit performance​​.
• Remuneration Committee: Sets Executive remuneration policies, reviews industry trends, and monitors wider workforce remuneration and diversity​​.
• Nomination Committee: Oversees Board composition, succession planning, and diversity, and advises on Board and Committee effectiveness evaluations​​.
• Risk and Sustainability Committee: Reviews reputational impact, safer gambling strategies, and sustainability, monitors cyber risks, betting integrity, and data protection​​.
• Market Disclosure Committee: Ensures compliance with market regulations and disclosure obligations, and oversees information disclosure to stakeholders and regulatory bodies​​.

Sanctions, Controversies, and Concerns

Flutter Entertainment plc has encountered regulatory challenges resulting in fines and settlements, notably with the UK Gambling Commission and Gibraltar Authorities. These incidents underscore the importance of continuous improvements in social responsibility measures and regulatory compliance.

Regulatory Penalties and Responses:

May 25, 2023: Flutter fined £490,000 by UK Gambling Commission for erroneous promotional push notifications to self-excluded Paddy Power customers.

CEO Ian Brown expressed regret, affirming Flutter’s dedication to leading in safer gambling.

Involvement in UK Government Gambling Act Review (GAR):

• April 27, 2023: Embraced GAR as pivotal for industry reforms and customer safeguarding.
  • • Active engagement in consultations, advocating for evidence-based approaches.

Emphasis on Responsible Gaming Initiatives:

• Play Well Strategy:
  • Implemented deposit limits for customers under 25.
  • Reduced online slot stakes.
• Committed 1% of revenue to Research, Education, and Treatment (RET).

Financial Impact and CEO Statements:

• Preemptive Measures:
  • Eliminated £150 million in annual UK business revenue.
• Estimated £50-100 million impact from proposed GAR measures.
  • CEO Ian Brown (May 25, 2023): Acknowledged error, swift corrective actions.
  • CEO Peter Jackson (April 27, 2023): Supported GAR, stressed constructive engagement with regulators.

Flutter Entertainment plc remains committed to enhancing social responsibility, compliance measures, and responsible gaming practices.

UN Sustainable Development Goals (SDGs)

Flutter Entertainment’s commitment aligns with several UN SDGs, including:

	Through initiatives like Play Well, Flutter focuses on responsible gambling and mental health.
	Transitioning to renewable energy tariffs demonstrates a commitment to sustainable practices.
	Internal initiatives promote employee well-being, professional development, and a supportive work environment.
	Work Better initiatives emphasize diversity, equity, and inclusion within the company.

Awards and Ratings

Flutter Entertainment has garnered recognition for its commitment to excellence and social responsibility, receiving prestigious awards such as:

• The 2023 SBC Awards: Employer of the Year, Gold Award: Acknowledged for outstanding practices in employee satisfaction and workplace culture.
• The 2023 Global Gaming Awards: Social Responsibility of the Year, Runner-Up: Recognized for proactive initiatives and impactful contributions to responsible gaming.

These accolades underscore Flutter’s dedication to fostering a positive work environment while prioritizing social responsibility within the gaming industry.

See more operator reviews: Bet365 | ProgressPlay

Conclusion

Overall Summary and Verdict

Flutter Entertainment, a dominant force in the global betting and gaming industry, showcases a commendable commitment to sustainability, responsible gaming, and transparency. The company’s diverse portfolio of brands, including Paddy Power, Betfair, and Sky Betting & Gaming, positions it as a leader catering to varied consumer preferences. Flutter’s robust ESG strategy, highlighted by its “Positive Impact Plan” initiatives and dedication to diversity and inclusion, aligns with industry trends towards heightened player protections and customer well-being.

While Flutter Entertainment has faced regulatory challenges and fines, such as those with the UK Gambling Commission, its swift corrective actions and proactive engagement reflect a commitment to rectifying errors and enhancing social responsibility measures. Positive ratings on platforms like Glassdoor and prestigious awards, including the 2023 SBC Awards for Employer of the Year, indicate a favorable perception among employees and stakeholders.

Answering Initial Questions:

• Transparency: Flutter Entertainment scores a 5 for transparency, with comprehensive and detailed insights provided through sustainability reporting and governance practices.
• ESG Strategy: The company earns a 4 for its robust ESG strategy, with initiatives like the “Positive Impact Plan” reflecting a commitment to responsible gaming and diversity.
• Sanctions and Concerns: Flutter’s score is 2, reflecting challenges with past regulatory fines. However, its proactive approach and improvements indicate a positive trajectory.
• 3rd Party Rating: With a score of 4, Flutter Entertainment maintains a positive public reputation and has received industry recognition for its efforts.

Verdict & Scorecard

• Final Score: 4 (Good – Nice choice! Go have fun!)

Strengths:

• Transparency: Flutter’s detailed reporting provides comprehensive insights into sustainability efforts and corporate governance.
• ESG Strategy: The company’s initiatives, like the “Positive Impact Plan,” demonstrate a strong commitment to responsible gaming and diversity.
• 3rd Party Rating: Positive public ratings and awards validate Flutter’s efforts, reflecting a favorable perception among stakeholders.

Areas for Improvement:

• Sanctions and Compliance: Continued focus on compliance and social responsibility measures to avoid future sanctions.
• ESG Strategy: Ongoing monitoring and updates to ensure effectiveness and alignment with recognized standards like GRI.
• Public Reputation: Seeking additional awards and recognitions could enhance Flutter’s public perception and industry standing.

Flutter Entertainment is on a positive trajectory towards sustainable and responsible gaming practices. Continued efforts in compliance, transparency enhancement, and maintaining a robust ESG strategy will further solidify its position as a leader in the global betting and gaming landscape.

Note: This scorecard is based on BWC’s rating system, providing an assessment of Entain PLC’s sustainability performance across transparency, ESG strategy, sanctions, and public rating. It offers a snapshot of the company’s sustainability practices for stakeholders and investors.

Disclaimer data: This analysis is based on publicly available information, and future reviews will delve deeper into ESG reporting and potential improvements through interviews with company representatives.

Source Material: Refer to the provided hyperlinks for detailed sources.