The contestants make their way to the starting line—sweat dripping down their faces profusely before the race has even begun because of the oppressive heat and humidity. No matter. They, of course, are there to represent their countries in one of the biggest multinational, quadrennial, sporting events in the world: the Olympics.
Initially, the Games were supposed to be hosted in 2020, but COVID-19 put an end to that. Even as recently as mid-July, there was some doubt about whether the Olympics would even be able to take place at all, especially as the COVID-19 delta and even lambda variants continue to spread.
But the global pandemic isn’t the only concern.
Olympics and Climate Change
In 1964, the last time the Games took place in Tokyo, the Olympics were delayed until October to avoid the typical hot and humid conditions present there in summertime—but that’s not the case with the 2020/2021 Games. Because of climate change, Tokyo is even warmer now than it was back then, averaging about eight additional days above 95˚F (35˚C) per year now vs. 1964.
Still, with almost no fans allowed to attend the Olympic events because of COVID-19 concerns, these could truly be the greenest games we’ve seen in generations. The carbon footprint has been lowered simply because there won’t be as many as 600,000 fans coming from abroad as Japan anticipated to go along with the 11,000 athletes (15,000 in you include next month’s Paralympics). That odd dynamic was on display at the opening ceremony where athletes from around the world paraded around a stadium filled with a sea of mostly empty seats at the National Stadium.
According to the official Olympic sustainability report, “As in other areas, the postponement of the Tokyo 2020 Games is affecting our actions on climate change. Since postponing the Games, we have been working to simplify and optimise them and this is helping to reduce resource inputs and therefore emissions. More specifically, a reduction in the number of tents and other overlays, temporary power sources, and air travel and nights of accommodation associated with fewer people involved in the Games will help cut back on CO2 emissions.”
For almost 30 years, the Olympics have been taking environmental measures quite seriously as the International Olympic Committee—prior to the Barcelona Games in 1992—signed on to the Earth Pledge, which was enacted as a global effort to help make the Earth a safer, more sustainable place. But sustainability was top of mind for Olympic hosts going back at least as far as the Sapporo (Japan) Winter Games in 1972. For instance, the creation of a downhill ski slope on Mount Eniwa at that event drew public outcry, so the Japanese government granted permission for the course but only as long as the affected area would then be permanently restored.
Make no mistake about it, sustainability is a big focus at these Tokyo games. The Tokyo Organising Committee of the Olympic and Paralympic Games focused on five Environmental, Social and Governance-related themes:
1. Climate change: The goal: zero carbon. However, to combat COVID-19, which is a bigger immediate threat, the Olympics decided to install air circulating equipment and use more disinfectant to help prevent the spread of the virus at the Games, but, of course, those initiatives lead to added CO2 emissions.
2. Resource management: The Olympics’ stated goal is to reuse or recycle 65% of waste generated at the venues as well as the Olympic/Paralympic Village (this plan was put into place before the decision to not have fans) and for 99% of the goods procured for the Games to either be reused or recycled. The Olympic podiums, for instance, were designed by Japanese artist Asao Tokolo and were made from 24.5 tonnes of discarded plastics.
3. Natural environment and biodiversity: The goal here is look after nature. “We have utilised the extra time after the Games’ postponement to further promote initiatives to protect natural environment area-specific ecosystems for an urban environment that coexists with nature.” The Olympics cited an example of endangered sea turtles that were found nesting in 2020 at Tsurigasaki Beach, where surfing—a new Olympic sport—is planned despite tsunami warnings. Organizers made sure the hatchlings were safe and added that they would monitor the area for more turtles before the Games. The organizers were also on the lookout for invasive species and found and removed a large number of queen fire ants as well as redback spiders.
4. Human rights, labor and fair business practices: The Tokyo Olympics wants to focus on Diversity & Inclusion, and says it will be the first Games organized and operated in accordance with the United Nations’ Guiding Principles on Business and Human Rights.”
5. Involvement, cooperation and communication: With COVID-19, a digital cheering experience is a must. Through the Olympics app, fans will be able to cheer for their favorite teams and athletes virtually via a widget. Additionally, while the Olympics sustainability report, says it plans to use digital tools to promote sustainability awareness, the most recent article that turned up on a “sustainability” search was from 2019, and there were no videos or photos listed in the search. It seems this could be a missed opportunity to promote sustainability awareness even further.
Still, some critics say the Olympics don’t go far enough on the sustainability front and say greenwashing is taking place.
In the Olympics just like business in general, there are often trade-offs when it comes to ESG decision-making.
For example, by removing fans from the equation, which we believe was absolutely the right decision, that choice could lead to $800 million in lost revenue. And since the Olympics is a nonprofit, 90% of revenue goes toward sport and revenue development, according to the International Olympic Committee. And this figure doesn’t even take into account revenue losses for Tokyo and its businesses, which could be hit $23 billion, according to another study.
Additionally, while an Olympics without fans is clearly better for the environment and doesn’t have as big of a carbon offsetting need, it is important to note the prominent role the Games plays in the “social” category of ESG. The first modern games were held in Athens, Greece, in 1896. The stated goal then was for the Olympics to become an all-inclusive event, although only men participated in those Games. Today, the Games have evolved to be much more inclusive with men, women and Paralympic athletes competing and, more importantly, as an opportunity for people and nations to come together in one of biggest global events in the world.
ESG trade-offs are known as “ ‘goal and scope dependency,’ ” says Martin Baitz, Sphera’s senior life cycle sustainability expert. There are always trade-offs because, “Reality is hard to simplify sometimes. To succeed in ESG, you need the right tools and approaches to be aligned and consistent to be able to handle a complex reality in a way that draws the right conclusions.”
Similarly, in business, companies that are able to make the best ESG decisions will do the most for not only their organizations but also the world itself, he added.
But unlike the Olympics, everyone wins in this “event.”