For this week’s Decarb Digest, join us on an inquisitive journey to understand the decarbonization process of North America’s sports industry. The omnipresence of sports on a global level cannot be underestimated. To date, 2024 has been particularly action-packed in terms of major sporting events, especially following the conclusions of the The 2024 Wimbledon Championships, 2024 UEFA European Championships and the 2024 Copa América, and with the 2024 Paris Olympic Games to immediately follow. It is also worth noting that the decarbonization revolution has undoubtedly reached the sports industry globally. For example, the 2022 Beijing Winter Olympics was a major sporting event that was committed to carbon-neutral projects and decarbonization efforts. Therefore, this piece will not be enumerating some of the most important decarbonizing strategies capable of yielding significant green impact in the sports industry, nor will it be dissecting what said impact means for the world of tomorrow. In lieu, this article will be a canvas for open thoughts on whether the world’s most conventional accounting measuring systems has the ability to adequately grade North America’s sporting industry, in all its multi-layerdness.
Year after year, North America is home to a seemingly endless list of major sporting events. Whether by default or by design, the overarching sports industry in North America is multifaceted through the variety of sports it covers, including auto racing sports, basketball, combat sports, golf, hockey, American football, and tennis, among many, many more. These sports are often further categorized by seasonality, whether taking place during a specific period or throughout the year; by geographic location, with one or multiple hosting cities/countries; and different terrains, with options ranging from hardwood flooring to water. Additionally, sports can be even further sorted by the participant’s profile, which may include different genders, people with disabilities, without forgetting sports involving animals, which together testify to the multiplicity of the sports industry. Point being, so many different sports in several different forms are consistently—or rotationally—hosted in North America alone.
The Business of Sports… In a Nutshell
The North American sports industry today is evidently not what it once was, with a 2023 valuation of the industry market size standing at US$83.1 billion compared to a US$56.4 billion in 2013. Several contributing factors serve as growth vehicles of the sports industry. For example, American football, basketball, baseball, and hockey each have colossal fan bases throughout the continent, which culminate to high viewership rates, ticket sales for live attendance, merchandise purchases, as well as advertising revenue. Somewhat of a new phenomenon, media rights also constitute a sizable revenue portion of North America’s sports industry. Specifically, televising and digital streaming rights for the continent’s major sports leagues transact in highly-valuable deals as broadcasters and streaming platforms pay billions of dollars for exclusive rights to broadcast games and events. Although previously mentioned, both ticket sales and merchandising remain significant revenue sources in their respective rights, with the former carrying the advantage of being marketed as a hospitality package for premium pricing and the latter appealing to fanbases’ emotional connection to their favourite teams and players to drive profit.

There are several additional revenue streams that transcend beyond those directly associated with sports. Firstly, technology and innovation—by leveraging mobile applications, social media, fantasy sport leagues, and sports betting—has enhanced fan engagement and created new revenue opportunities through digital advertising and subscription models. Secondly, the sports industry in North America has historically benefited from government support through public funding for stadiums, arenas, and sports facilities; modern facilities and venues increase revenue potential via enhancing fans’ experiences. Thirdly, the cultural and social significance of sports in North America is emphasized through its power to bring people together; cultural significance also subsequently fuels continued financial investment in the industry. Fourthly and as important, particularly due to revenue growth, media exposure, and a vibrant digital economy, the value of sports franchises has skyrocketed over the years; the appreciation in franchise values hints at the overall profitability and attractiveness of the sports industry in North America.
Sports and Climate Change: A Bidirectional Relationship
The crossover between the sports industry and environmental matters is more evident that one may think. In fact, it can be described as a bidirectional relationship. On one hand, the sports industry has encountered climate-related speed bumps in recent times, with extreme heat and forest fires causing poor air quality at sporting competitions. As a result, athletes’ health were put at risk as they competed in difficult conditions, with the majority of sports being inherently affected by the natural environment. On the other hand, event organizers have the pressure and incentive to host sporting events year-in and year-out, and have historically opted for innovative solutions to that end, like the 2022 Beijing Winter Olympics becoming the first of its iteration held on 100% artificial snow. This set the precedent to instrumentalize technology and innovation to tweak weather conditions and optimize the chances for sports events to occur as planned, and for the sports industry’s economy to prosper. While the resort to artificial climate could be attributed to the warming climate, the water usage and energy consumption required to host a whole competition of that magnitude had a significant carbon footprint, approximately 1.306 million tonnes. North America is scheduled to host the 2026 World Cup, the first of its kind to host 48 teams. The greater the number of teams, the higher the number of fans that will require more venues, infrastructures, and hospitality establishments, among others. In conjunction, a higher population also theoretically predicts higher carbon emissions to be recorded for the event.
Sustainability Reporting Standards for Sports
Thus far, we have acknowledged the range and variety of sports in North America. We have also outlined some of the revenue lanes that contribute to its industry's profitability. Therefore, we now have an idea of how expansive the industry is and how economically profitable it may continue to be. In the true spirit of decarbonization, we have also inferred one of the ways in which the sports industry interacts with the environment and we also anticipated more carbon emissions coming our way for the next major sporting event hosted in North America; namely the 2026 World Cup. That said, and also considering that the 2030 Sustainable Development Agenda is right around the corner, we must ensure that reporting standards for sports can adequately assess the sports industry, despite its new multidimensional and ‘corporatized’ look.
The most widely used international accounting tool, the Greenhouse Gas Protocol, measures carbon emissions through three scopes by differentiating how said carbon emissions were produced. Scope 1 refers to direct emissions from processes owned or controlled by an organization; scope 2 pertains to emissions generated by electricity, steam, heating, and cool that is purchased by an organization; and scope 3 covers all emissions associated with processes and consumption in an organization’s value chain. Within the context of sports organizations, these may include purchased goods and services like sports and office equipment, spectator travel, and waste disposal. We must also remember that global heating is produced by other gasses than just carbon dioxide (CO2), most notably methane, which has a much greater heating effect than CO2e if measured molecule per molecule (1 tonne of methane = roughly 4 tonnes of CO2).

Furthermore, scopes 1 and 2 are less challenging to quantify than scope 3. For energy use, for example, companies can source the data needed to convert direct purchases of gas and electricity into a value for the associated greenhouse gasses. Scope 3 emissions account for the highest proportion of total emissions when compared to the two other scopes. Therefore, the technical difficulty of accurately measuring sport organizations’ carbon emissions stems from the data collection and conversion processes, the technical expertise required for gas collection, as well as correct categorizations among the three above-described scopes.
Several questions emerge. Firstly, can the Greenhouse Gas Protocol be used to effectively measure emissions for the new-age North America sports industry? Are the three scopes of emissions adequately categorized for an analysis of the sports industry? Are calculation processes robust enough to yield accurate carbon emission indicators for the sports industry? The former question is especially challenging to answer, when considering the difficulty of categorizing gas emissions connected to broadcasting, streaming, online betting, spectator travel, and other steps within the sports organizations’ value chain.
We know what the sports industry can do. Sports organizations can reconstruct their business and financial revenue models to adopt a more sustainable approach. In North America, sports organizations, such as the New York Yankees, signed the UN Sports for Climate Action Framework and committed to a sustainable future. In terms of potential action items, the list is also long. Studies imagine the positive environmental impact of every and any logistical or operational change with the sports industry. For example, cutting the NBA season by 10 games would allegedly save over 5,000 tonnes, or metric tons, of CO2 per year, which is equivalent to what 2,200 medium-size cars produce in a year. On the global level, UK-based football clubs such as Manchester City and Arsenal FC are investing in carbon reduction initiatives, including obtaining Leadership in Energy and Environmental Design (LEED) certification for stadiums and switching to renewable energy and installing automated LED lighting on club sites. A second set of questions emerge: which of the 17 Sustainable Development Goals (SDG) are directly or indirectly connected to North America’s sports industry? Should these be categorized by scopes of emission? How do successful decarbonization strides in the sports industry factor into each of the SDG objectives?
In examining the intersection of decarbonization and North America's vibrant sports industry, it becomes evident that the sector's evolution and economic prowess are deeply intertwined with environmental considerations. As the industry continues to grow, fuelled by passionate fan bases and technological advancements, questions arise about how well current accounting standards, like the Greenhouse Gas Protocol, can capture its full environmental impact. The journey towards sustainability demands innovative solutions and comprehensive measurement frameworks that can assess the industry's complex carbon footprint across its diverse operations. With proactive steps and global initiatives, such as the UN Sports for Climate Action Framework, North America's sports industry stands at a pivotal moment to lead by example, fostering a greener future while sustaining its economic vitality.
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