America’s communities face a number of challenges that require long-term solutions and the participation of various stakeholders to implement them. Improving educational outcomes, increasing community health and wellness, and solving environmental concerns, among other issues, need multisector solutions and lasting commitments. The private sector has long been an important part of those multisector solutions, especially through their corporate social responsibility (CSR) efforts.
In addition to improving their communities, there are clear rewards for companies that engage in efforts to solve those challenges. From increased employee engagement to improved business outcomes and brand value, there is a direct business and profitability-led reason for companies to be active stakeholders in their communities.
While the growth of CSR reports has resulted in numerous companies reporting on their citizenship efforts, there has not been an effort to bring together the CSR initiatives of an entire industry, particularly up and down the value chain or across industry peers.
An industry-wide review brings some significant benefits. Most importantly is identifying the scope of positive impacts on communities. Instead of just one company’s contributions in initiatives like scholarship programs, sustainability efforts, diversity and inclusion benefits, community health initiatives, or disaster response, combining them can bring a more complete picture on the role of the industry in helping communities and the nation.
With these benefits in mind, the U.S. Chamber of Commerce Foundation (USCCF), in conjunction with the American Gaming Association (AGA), created this industrywide CSR report to show the collective work and effect of the gaming industry’s commercial operators, tribal operators, and suppliers.
Through quantitative and qualitative research, USCCF explores AGA member companies’ CSR programs, how they are executed, and the rationale that drives the companies to run specific programs. By engaging with a variety of company types and sizes, this research reveals an industry that is leading in many aspects of CSR programming and engagement.
American communities face a number of societal challenges that require long-term solutions and the participation of various stakeholders to implement them. Improving educational outcomes, increasing community health and wellness, and solving environmental concerns, among other issues, entail multisector solutions and lasting commitments that do not always have a clear and direct path to success.
The private sector has long been an important part of those multisector solutions. When companies conduct this work outside of their main business practices, it is called corporate social responsibility (CSR). In the past, CSR was largely driven by philanthropic efforts, primarily monetary donations to nonprofits to support their work. Over the past 20 years, however, CSR strategy has shifted toward building partnerships with cross-sector organizations and leveraging core business competencies to address issues beyond funding.
Resolving these community and societal challenges is its own reward, but companies that engage in this more strategic style of CSR enjoy broader benefits besides being part of a solution:
Companies that actively engage in CSR have higher rates of employee engagement, but only if they internalize those efforts and show how CSR initiatives are part of the corporate culture instead of an addendum.
BUSINESS OUTCOMES AND INVESTOR RELATIONS
There is disagreement on why companies that are robust in CSR have positive economic outcomes. Do well-established companies conduct CSR work because they can afford it regardless of the returns? Or, is robust CSR work an intrinsic value of a company’s strong relationship with stakeholders? Either way, the fact is that robust CSR portfolios generally denote sound stock portfolios.
BRAND RECOGNITION AND VALUE
Effective and persistent CSR initiatives improve company brand recognition. Research shows that social media discussion about CSR work is 10 times more effective on impacting a company’s brand reputation than social media chatter about a company’s products or business activities.This impact on brand is stronger for younger employees and consumers. A recent survey found that 75% of millennials would take a pay cut to find work that matched their values.
The private sector cannot achieve any of these benefits if it does not talk about its CSR work effectively. Whether through creating a comprehensive report, mapping to external indices, or engaging in communications, individual companies are actively broadening how they conceptualize, evaluate, and communicate their CSR efforts.
Yet, it is not just individual companies that benefit from CSR communications. Industries’ CSR activities extend beyond the work of a single company to encompass the activities of entire supply chains or sectors. There is untapped value in packaging CSR work by industry to effectively show how large sections of the private sector work together to improve society.
One industry where CSR work is rapidly growing and evolving is the gaming industry. A dynamic $261 billion sector, the gaming industry consists of a diverse group of companies that offer casino gaming and resort facilities to the public and include gaming supply developers and manufacturers. These companies have a significant impact as employers, community members, and stakeholders and augment their influence by implementing strategic CSR programs.
With these benefits in mind, the U.S. Chamber of Commerce Foundation (USCCF), in conjunction with the American Gaming Association (AGA), created this industrywide CSR report to show the collective work and effect of the gaming industry’s commercial operators, tribal operators, and suppliers.
Through quantitative and qualitative research, USCCF explores AGA member companies’ CSR programs, how they are executed, and the rationale that drove them to begin such programs. By engaging with a variety of company types and sizes, this research reveals an industry that is leading in many aspects of CSR programming and engagement.
How CSR is Performed in the Gaming Industry
The internal workings of any company’s CSR activities vary depending on the company and its industry. Unlike traditional business units like finance or human resources, CSR might not be housed in a distinct corporate department, and how it is governed and staffed can differ greatly from company to company. This section outlines some of the governing practices of CSR common in the gaming industry.
Who is Responsible for CSR?
The placement of CSR in companies is often based on the priorities of the company given its industry and mission. For example, companies whose industry focus on the environment may create a dedicated sustainability department to address its CSR activities. Similarly, service-oriented companies may house CSR under its human resources, corporate/government affairs, or communications.
“If you’re going to stay in business and be sustainable, especially in the gaming industry, CSR is a must. And you can’t fake it. You’ve got to do it for real.”
Among AGA member respondents, C-Suite executives uniformly lead CSR initiatives in the C-suite with extensive board support. As for the administration of CSR programming, there is no one predominant administrative location. CSR practices and activities occur across a variety of company workstreams. Following a mixed-department approach, companies often house CSR management in corporate/government affairs, marketing/communications, or in its own office. This breadth in the gaming industry represents the diversity of how gaming companies envision and utilize CSR to achieve their overall business goals.
Where CSR is housed may vary by AGA member size. For smaller AGA members, they may have one or two staff partially or completely dedicated to shepherding CSR activities. For larger AGA members, the departments that manage CSR have a dedicated department with several staff who can oversee and execute more numerous and expansive CSR programs. There is a debate in the private sector over whether CSR should be housed on its own or spread across departments to ensure either depth or breadth, and the gaming industry has good examples on both sides of that debate.
Who Influences CSR?
Although the views of multiple stakeholders may be taken into account, typically the voice of a key stakeholder rises above others to establish and/or drive company involvement in certain CSR practices. Key CSR stakeholders can take the form of groups, such as board of directors or employee resource groups or individuals like the chief executive officers (CEO) or CSR staff leaders.
Among AGA member respondents, the CEO ranks as the most influential stakeholder in determining CSR strategy. After the CEO, CSR-dedicated staff leadership has the second highest level of influence followed by the board of directors and company employees. These findings are consistent with findings in other industries where the CEO and various C-suite executives serve as the key influencers in CSR.
Conversations with AGA member respondents reveal more nuanced approaches to the influence of various stakeholders, both internal and external, in developing CSR strategies. In more than one company, dedicated CSR staff and technical experts develop a draft of the annual strategy with input from senior management and/or a CSR committee, comprising a mix of company stakeholders from various work units and company levels. The CEO generally has final say on the CSR strategy that is enacted, though, in some cases, the board of directors plays an active role.
AGA member respondents also emphasize the importance of a public commitment to company CSR from senior executive leaders. Several companies say that the CEO establishes the tone of CSR and the company culture. In one organization, the board of directors is highly involved in setting the expectations of what the company will achieve in CSR.
Even though senior management or CSR staff manage CSR strategies and tactics, external stakeholders—particularly customers and nonprofit partners—frequently provide insight on CSR direction. Trusted nonprofit partners serve as subject experts, especially for gaming companies looking to improve issues like food security and homelessness. Building partnerships with these stakeholders enables the companies to improve their CSR efforts.
Like other consumer-driven industries, the gaming industry has to listen closely to its customers and adjust to their needs to thrive. Unlike many consumer-facing companies, however, gaming companies often develop close ties with individual consumers and have the opportunity to hear from them on specific aspects of community engagement important to them. Especially when engaging a new community for a business opportunity, there are numerous public meetings where community members and leaders describe what their community needs and companies can hone their CSR initiatives to have the greatest effect on that community.
Different requirements in different communities necessitate that CSR initiatives remain nimble, even though they also need multiple layers of senior buy-in. One respondent states that its company’s CSR representatives at local properties tailor CSR activities to address needs in the local area, and local staff create community partnerships and employee volunteering opportunities based on the mutual goals of the company and community.
Metrics and Measurement
Quantitative measurement of company operations are crucial to business success, a practice that is extending to CSR. Several AGA member respondents report how essential performance measurement is in shaping its CSR programs. In particular, one AGA member respondent aspires to integrate CSR into core business strategy and determine how CSR enables and accelerates the business’ short- and long-term goals. But to do so, it requires considerable quantitative data to align them.
That company collects metrics on the outcomes and impacts on all its CSR activities, including its charitable efforts, sustainability, and employee engagement. Moreover, the company assesses Fortune 500 and global hospitality trends in CSR, benchmarking against its peers outside and inside the gaming industry. With such longitudinal data, this information allows the company to examine its progress in its CSR journey and determine where the company should be heading. While this example was one of the more progressive that this research uncovered, two-thirds of the AGA member respondents collect data on metrics to determine CSR effectiveness.
While these metrics and evaluations are pivotal for companies to internally process the effectiveness of CSR activities, companies also need a communications strategy to share that effectiveness to key stakeholders including consumers, employees, investors, and communities.
A survey on the CSR practices of Fortune 1000 companies found that respondents most commonly use the company’s website (95%) and the annual report (72%) to convey their CSR-related communications. More than half of the respondents indicated that they disseminate information via social media (54%), including Facebook and Twitter.
This research found that larger AGA member respondents have high rates of comprehensive CSR communication strategies. But even smaller respondents have outlined plans to leverage press releases, customer communications, and social media posts to share their work.
External CSR Mapping
CSR is becoming more established across the private sector because of the growing understanding that corporate engagement is critical to company and community success. Each company needs to show all stakeholders that its CSR work is effective and leverages the strengths of the company to improve its community, society, and environment. To do so, many companies, particularly in the gaming industry, map their work in response to an external system to share and benchmark their community engagement.
Currently, there are not many external mapping indices that track a broad category of corporate citizenship activity across a number of industries. However, some companies are leveraging the Global Reporting Initiative (GRI) for environmental programs, the Sustainability Accounting Standards Board (SASB) for environment and governance issues, or the United Nation’s Sustainable Development Goals (SDGs) for broader global impact. Reasons for a company to undertake such mapping exercises vary, but they permit companies to report their CSR activities externally in a standardized manner so that the information can be more easily utilized, interpreted, and aggregated by external stakeholders like investors, customers, and other interested parties.
Mapping to external indices originates with the creation of a company CSR report. Of Fortune 1000 companies, only 27% of them have produced a CSR report, a ratio that increases with company size. Of North American companies that produce a CSR report, an estimated 55% of their reports contain information mapped to GRI guidelines. Only 6% of companies integrate the SDGs in their CSR reports.
Forty percent of AGA member respondents say that they publish a CSR report. Of those companies that produce a CSR report, 83% report GRI standards, 67% of them map to the SDGs, and 17% map to SASB. To ascertain that SASB measures were accurate for the gaming industry, AGA worked in conjunction with SASB to create metrics that effectively track gaming company sustainability efforts.
For one AGA member respondent that maps to external standards, it chooses to do so to better monitor its greenhouse gas emissions and other sustainability measures, both within their operations and the supply chain. It finds that tracking these to external measures is valuable for public validation.
Another AGA member respondent first conducted a materiality analysis, which identifies critical environmental, economic, and social issues that could have a significant impact on a company’s business performance or influence the decisions of its stakeholders. Based on the results of the analysis, the company selected priority indices to which the company would map its CSR activities. In between reporting periods, the company uses learnings from the reporting process to improve its CSR programs and better align them with corporate priorities.AGA member respondents are more likely than the rest of the private sector to leverage a broad array of tactics to communicate their CSR efforts.
Employee and Community Engagement
Involvement of company employees in local communities is one of the cornerstones of a CSR program. In 2015, 88% of companies surveyed by America's Charities said that they believe effective employee engagement programs help attract and retain employees. Similarly from the employee perspective, 71% of respondents to a 2017 America's Charities’ survey said that they want to work for companies that have values that align with their personal values. For the gaming industry, responsible gaming, diversity and inclusion, charitable giving, volunteerism, and community partnerships are the main pillars of the industry’s CSR strategy.
One aspect of CSR that is unique to the gaming industry is responsible gaming. Responsible gaming consists of a suite of voluntary and regulatory policies and requirements for the gaming industry to ensure it offers a safe user experience that protects players from the potential negative consequences of gaming. Responsible gaming addresses several different components of gaming, including the following:
- Protection of vulnerable gamblers
- Prevention of underage gambling
- Safety measures against criminal activities
- Information privacy
- Online payment protection
- A secure online environment
- Ethical and responsible marketing
Responsible gaming programs are framed by state laws and regulations, which include the funding and provision of problem gambling services. In addition, many gaming companies implement programs with a range of responsible gaming measures that go beyond what is required by law or regulation. Gaming companies work together, often with AGA, to develop and distribute educational materials for customers and other stakeholders, provide employee training on responsible gaming, and conduct best practices research.
Among AGA member respondents, 100% have a responsible gaming policy. Reporting member companies say that over 64,000 employees have been trained in responsible gaming.
Measurement and evaluation are critical components of responsible gaming and employee training. One AGA member respondent partnered with a consulting firm to determine what employees wanted to learn about responsible gaming. The information from the findings was integrated with responsible gaming topics from the company to create comprehensive training for employees. Another AGA member monitors responsible gaming training success to determine if employees feel empowered to mitigate problem gaming. It adjusts its training program based on assessment findings.
Participation in the greater responsible gaming community of researchers, policymakers, and fellow gaming industry businesses is also key for companies to keep apprised of responsible gaming trends. One AGA member works with responsible gaming associations and groups—like the AGA’s Responsible Gaming Collaborative—to discuss innovative methods of addressing responsible gaming and make certain they are meeting the needs of the broader gaming community.
Diversity and Inclusion
Diversity and inclusion (D&I) in the workplace are essential for business success and employee satisfaction. Research shows that diverse workplace teams solve problems more quickly, and companies with diverse senior-level teams are more financially successful.
AGA member respondents recognize the importance of workplace D&I, and several companies interviewed state that their employees, customers, supplier base, and business partners are all increasingly diverse. As a result, they say that they need to leverage these differences to create business value, or else they risk losing market share and not reaching their potential.
Those efforts are paying off internally. According to an anonymous survey of over 600 gaming industry employees by Growth from Knowledge (GfK) Global, 81% either agree or strongly agree with the statement that the gaming industry is diverse and welcoming to all guests and employees.
Across the gaming industry, 51% of employees among AGA member respondents are women, exactly the same percentage of female employees in the broader leisure and hospitality industry. Fifty-seven percent of AGA member employees are racial minorities, a stark contrast to the 25% reported in the broader leisure and hospitality industry.
Aside from a small percentage of very young employees, the gaming industry is mostly typical of the U.S. workforce, with an equitable distribution of employees by generation. At 28% in the oldest demographic, the gaming industry has one of the highest proportions of Baby Boomers of any industry. This evenly distributed cross-section of employees by generation in the gaming industry helps maintain a more diverse workforce in addition to gender and racial diversity.
D&I Employee Recruitment and Retention
Studies demonstrate that employees value and seek out diverse and inclusive workplaces. In a 2017 national survey conducted by Deloitte, 80% of respondents said that inclusion is significant in choosing an employer, and 72% would leave an organization for one that has more of the inclusive aspects they desire. D&I recruitment and retention are therefore crucial to CSR and broader business efforts in the gaming industry and in the private sector.
For D&I employee recruitment, 69% of AGA member respondents have programs targeting minority employees. This percentage surpasses the 57% of company respondents from all industries who report that they have recruiting programs to increase diversity according to a D&I survey by the Society for Human Resource Management (SHRM). To retain minority employees, 45% of AGA member respondents implement D&I retention strategies, which is higher than the 38% of company respondents reporting the presence of retention programs to increase company diversity in the SHRM survey.
Affinity or Employee Resource Groups
Affinity or employee resource groups are another common D&I business practice. Twenty-nine percent of AGA member respondents state that they have affinity groups. In contrast, only 15% of company respondents to the SHRM D&I survey say that they implement affinity groups to increase their diversity.
AGA member respondents say that affinity groups create a broader acceptance of inclusion in corporate culture. Affinity groups help employees by providing greater support systems and tools for professional development beyond their individual work units. At the company of one AGA member respondent, affinity groups also engage in career fairs for recruitment and talent development to enhance employee retention.
Whether in its hospitality, IT, or industrial services, the gaming industry also plays a significant role in workforce development. Between gaming resorts and manufacturing facilities, the gaming industry’s 750,000 employees around the country hold a variety of positions that translate into a number of careers.
To help individuals prepare for those careers, either inside or outside the gaming industry, gaming companies engage heavily in supporting educational and workforce development initiatives. In some cases, these efforts occur in their own facilities. Many AGA member respondents have an assortment of workforce development programming, ranging from management training to specific skills in culinary arts or hospitality. In other cases, the gaming industry engages in external educational efforts. In many communities and states where the gaming industry operates, member respondents are significant donors to a variety of scholarship programs. They also work with community workforce development centers and schools to bring both casino-specific and general workforce training programs that lift up the skills of an entire community.
All of these efforts to develop a workforce have had a positive result on gaming employees’ satisfaction. According to the Gfk survey, 82% of employees were either completely or somewhat satisfied with their jobs.
Charitable Giving and Foundations
Corporate giving refers to social and philanthropic initiatives launched by a company to support and advocate a particular cause. Often, the purpose of corporate giving is to deliver social and favorable benefits to communities where a company has a vested interest.
A company’s charitable giving activities are also strongly linked to its employee engagement. Nearly 6 in 10 employees in a 2017 America's Charities’ survey say they want to work for companies that support workplace giving and volunteering. Moreover, 78% of consumers say they are more likely to buy from companies that are active in corporate giving.
The gaming industry takes its responsibility to philanthropic causes seriously. Overall, AGA member respondents distributed $367 million through their charitable giving, with an average per AGA member respondent of $23 million. This is 50% greater than the average giving from consumer discretionary companies, which is $16 million as reported by a Committee Encouraging Corporate Philanthropy (CECP) study. In addition, consumer discretionary companies had a cash giving on average of 0.06% of revenue, where the respondents to our survey gave 0.11% of revenue in cash to charities, including their own foundations.
Most corporate giving can be executed through two different means. First, a company can set up an internal corporate giving program that corporate staff maintains and executes. Such activities are typically carried by human resources or dedicated employee engagement staff. Among AGA member respondents, 86% of them have a charitable giving program. This figure is on par with the CECP survey stating that 85% of a sampling of 258 large companies in the U.S. have a formal domestic corporate giving program in place.
Second, companies can establish a foundation, which serves as an independently formed, nonprofit entity that is legally separate from the company. Thirty-six percent of AGA member respondents state that they have a charitable foundation in addition to a charitable giving program. A listing of the top causes that AGA members support though their charitable giving are displayed, contrasted with the top charitable causes of consumer discretionary companies from a CECP survey.
|AGA Member-Supported Causes||Consumer Discretionary-Supported Causes|
|Arts and Culture||Education|
|Kids and Youth||Community Development|
Several AGA member respondents report that employee investment and a company culture of benevolence help facilitate involvement in and enthusiasm for giving. To determine giving, one AGA member has an online portal to which interested nonprofits submit an application for giving consideration. A committee comprising internal stakeholders from a variety of business units then meets quarterly to determine giving direction. Monthly updates on nonprofit progress enable the company to monitor the success of their charitable giving.
Another respondent has a national charitable giving strategy that was determined through research and internal discussion with key stakeholders. The national strategy sets expected giving and volunteerism priorities for all properties. The company then allows each property to do its own targeted giving, which varies based on regional issues and community needs.
Finally, one AGA member respondent recognized a significant range in the quality of the grant applications they were receiving at their company foundation. To help improve the quality of submissions, the company hosted an education forum for nonprofits on grant writing—not only for grant applicants to its company foundation but for other foundations. By strengthening the grant writing skills of interested nonprofits and current nonprofit partners, the company provided critical capacity building to ensure the success of its nonprofit partners.
Employee Volunteering and Matching
Employee volunteerism is another CSR activity through which companies can foster employee engagement. In a survey of CSR professionals concerning employee volunteer programs, the Corporate Responsibility Association (CRA) found that 55% of respondents believe that employee volunteering is essential to employee satisfaction and retention. To encourage employee volunteering, 41% of CRA survey respondents report that their company gives employees paid time off to volunteer, 39% highlight volunteering opportunities as part of their employee recruiting efforts, and 32% dedicate specific days of service to support nonprofit partners.
Eighty-six percent of AGA member respondents have a formal employee volunteering program, aligned with the 91% of companies citing they have employee volunteering in a CECP survey. It is estimated that almost 30,000 employees volunteered at AGA member respondents in the U.S., putting in over 422,000 volunteer hours. The average employee volunteer among AGA member respondents donated 14 hours of his or her time in 2017, which is impressive compared with the three average hours devoted by consumer discretionary companies.
One AGA member respondent has a particularly active employee volunteering initiative. The company organizes several opportunities each week for employees to volunteer with local nonprofits that fall under the company’s charitable causes. In exchange for volunteering, employees accumulate volunteering points that can be redeemed for items like gift cards, show tickets, hotel stays, and other company-related services.
As part of their charitable giving, some companies use matching gift programs that match the donations that their employees make to charitable organizations. When employees make donations, they request a match from their employers who then make a donation to the same organization. Similar to charitable giving and volunteering, corporate matching gift programs are used by companies to further their employee engagement endeavors. An America's Charities’ survey found that 79% of employees think it is important that their companies match their charitable giving.
For AGA member respondents, 29% have an employee matching gift program. In comparison, 90% of companies match employee donations according to CECP research. With many gaming companies involved in foundations or bigger charitable partnerships, it is possible that employee matching is not a preferred method for gaming companies to facilitate employee engagement.
Community partnerships can combine companies’ business expertise with access to community programs offered by government or nonprofit organizations. Partnerships can contribute to employee engagement through volunteerism or matching gift programs or simply act as stand-alone CSR initiatives to build community development and well-being.
In many communities, gaming operators enter into a host-community agreement that codifies how the gaming company and community create partnerships around shared services, particularly utilities, physical infrastructure, and public safety. These formal agreements can serve as the backdrop for other formal or informal partnerships with the community on additional issues around development, health, and sustainability. A collection of these are available at the City of Boston’s website.
Sixty-nine percent of AGA member respondents have partnerships with nonprofit or government entities to support communities. Top causes for partnership support among these companies are education and community development. Partnerships regarding health, hunger, and food insecurity are the second most common types of community partnerships.
One AGA member respondent says that to survive as a business, you must have an interactive and positive relationship with your community. Since most of the company’s workforce comes from local communities, the company wants to help them through nonprofit partnerships and provide a vibrant quality of life for its future employee base.
|3 Square||AAA Foundation||American Cancer Society|
|Boys and Girls Club||Clean the World||Easter Seals|
|Habitat for Humanity||Muscular Dystrophy Association||National Meals on Wheels|
|National Park Trust||Rescue Mission||Teach for America|
|The Smith Center||Southern Nevada Food Bank||United Way|
|Vegas Strong||Veterans Village|
As a main contributor to greenhouse gas emissions, food waste is a special focus of the gaming industry. Reducing and diverting food waste helps protect the environment and conserve natural resources, and reduces costs and disposal fees. Food waste in the gaming industry primarily occurs through companies’ restaurants and catering services. An analysis of restaurants and restaurant chains in general in 2016 revealed that only 4% of reported food waste was recycled and 2% of food was donated. Therefore, there is still much work to be done across all food preparers to reduce food waste
AGA member respondents striving for sustainability are making meetings at their facilities more sustainable—both the meetings and conferences of an operator’s clients, as well as company internal meetings. One AGA member respondent works with its clients as partners to establish their sustainability goals and tailor meetings to meet those goals. It collects sustainability metrics during the meetings and then shares with clients for discussion on how to improve meeting sustainability.
Another AGA member has an established meeting protocol for all its client and internal meetings, including no preset water and recycling of written meeting materials. In addition, it audits its locations to ascertain compliance with meeting protocol and makes adjustments to practices based on audit results.
AGA members, especially those operating commercial or tribal gaming operations, are distinct among the private sector when it comes to food waste. In addition to numerous restaurants attached and associated with each resort, there are also thousands of hotel rooms with food service options, banquets and buffets, convenience stores with packaged foods, and massive conference and convening spaces with their own food service programs.
Consequently, gaming companies are dealing with almost every aspect of consumer food waste in a relatively small footprint. Forty-six percent of AGA member respondents, and essentially all of the commercial operator respondents among them, say that they have a food waste program.
One AGA member starts its focus on reducing food waste through more effective food preparation. Then, it concentrates on safe and secure reuse—through use in employee dining rooms or direct and prompt donation—and then diversion in the form of animal feed or composting. While this method is challenging given business needs and the expectations of customers, reducing food waste from the beginning lessens the amount of food that may need to be reused or diverted.
“Our ability to survive and thrive depend on the state of the planet’s environment.”
Another AGA member respondent spoke about its work to divert banquet food, preserve it, and turn it over to community food banks to distribute as meals. A major challenge that many of the companies encounter is a lack of adequate infrastructure among local and regional food banks to receive and safely use the food.
Especially when dealing with a vast amount of prepared and cooked food, companies are looking at innovative ways to deal with this issue through technology, either by leveraging creative methods to preserve prepared food through quickly freezing or improving logistics to get food more quickly served to those who need it.
Such a challenge, respondents say, can be addressed with a communitywide effort involving industry, government, and nonprofits, which they are pursuing. This is one area, in particular, where partnerships across the industry will prove to be necessary for long-term success.
Like other industries, the gaming industry generates a large amount of solid waste, which includes food waste, paper, glass, plastic, aluminum, and other metals. Much of these commodities can be recycled to recapture its value. When that waste is disposed through incineration or landfill, there are significant hauling and tipping costs, and other environmental impacts. Greenhouse gases, air pollutants, dioxins, and heavy metals can all be released or leeched out from landfill and incineration, which can impact air quality and health. Recycling of these materials can therefore help mitigate the negative health and environmental factors that result in waste disposal.
Of AGA member respondents, 93% have recycling programs. In contrast, a McKinsey & Co. survey of companies from various industries found that only 61% reduce waste from operations.
In addition, respondents generated an estimated 261,000 tons of waste in 2017, 38% of which was diverted from landfills. This percentage greatly exceeds the 2% waste recycling rate reported by Southern Nevada, an area where many AGA members do business.
AGA member companies can attain water efficiency through a variety of methods. Low flow water fixtures, sustainable landscaping, and fixing basic leaks are some simple strategies that companies employ. This issue is especially pertinent for AGA members, many of whom do business in areas of the U.S. where water supplies are stressed.
Among AGA member respondents, 71% of the companies conduct water efficiency practices. As a point of comparison, this figure is almost twice the rate (38%) of companies reducing water use in their operations reported in the McKinsey & Co. survey. Total water consumption for member respondents is an estimated 8.4 million kilogallons (Kgal).
AGA member respondents improve water efficiency through several means. One company is trying to reduce water consumption while looking for ways to reuse water and find alternative sources of water. The company has examined water efficiency in its operations, mechanical systems, and cooling towers. Solutions it has found include the installation of water-efficient fixtures, as well as a filtration system that takes low-quality groundwater, filters it, and uses the filtered water for irrigation and the company’s cooling towers so that there is no usage of potable water.
The 47,000 hotels and motels in the U.S. spend about 6% of their operating costs on energy each year. The varied nature of the physical facilities and activities that they host can make energy management particularly challenging. The least expensive and fastest way to curb demand and emissions growth is by improving energy efficiency through investment in technology.
Ninety-three percent of AGA member respondents carry out energy efficiency practices, which is higher than the 63% of companies reducing energy use in operations from the McKinsey & Co. survey. Total electricity consumption among these members is 16.6 million gigajoules (GJ).
For one AGA member respondent, improving energy efficiency has meant upgrading existing buildings with advanced energy technologies. Such changes consist of upgrading to lighting and heating, air conditioning, and ventilation equipment; installing new sensors to monitor energy practices; replacing plant controls; rebuilding pumps; and converting air and water delivery systems to variable flow to reduce unnecessary pumping and fan energy. This path of energy efficiency has been similar for other respondents.
Carbon emissions are the release of carbon into the atmosphere, which contributes to the warming of the earth’s atmosphere. In the gaming industry, carbon emissions can be primarily attributed to energy, transportation expenditures, and waste from business operations, as well as the energy sources the companies use to run their operations. In a broader context, the hospitality industry accounts for roughly 1% of global emissions, a figure that will increase as the demand in leisure activities continues to grow. Measuring carbon emissions, therefore, allows the gaming industry to evaluate its contribution to carbon emissions and work to reduce its emissions to benefit the environment.
Thirty-eight percent of AGA member respondents measure their carbon emissions, which is similar to the 43% of companies reducing emissions from operations in the McKinsey & Co. survey. Total carbon emissions are 1.5 million metric tons of CO2 equivalent (MT CO2e) among AGA member respondents. This figure represents a small fraction of the 37 million MT CO2e released into air in Southern Nevada in 2013.
Many efforts that AGA member respondents undertake to reduce their carbon emissions come through other sustainability activities discussed in this report. Reductions in food water, energy, and water usage ultimately contribute to reductions in carbon emissions. Several companies have established targets to meet regarding the reduction of carbon emissions and have publicized these targets to the public to allow customers, investors, and other key stakeholders to hold them accountable.
Green Building Certification
Green building certification is a means to achieve other sustainability goals. Receiving such a certification requires the commercial sector to adhere to certain standards regarding energy, water, building materials, and other factors in their existing, new, or renovated facilities. Beyond advancing a company’s sustainability goals, government tax incentives can be offered with green building certification and can further motivate a company to pursue these standards. The two prominent green building certification programs for the gaming industry are the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification and the Green Building Initiative’s Green Globes certification.
AGA member respondents are actively involved in green building certification. Sixty-four percent of them are either Green Globes or LEED certified. Of the companies that participate in green building certification, 54% of their U.S. properties have been green building certified.
Some AGA member respondents have chosen to become LEED certified, while others have strictly pursued Green Globes certification. One company sought certification from both Green Globes and LEED to accentuate its commitment to sustainability. Sustainable innovations that have resulted from green building certification include on-site power plants that produce electricity, waste heat that generates hot water, and sustainable landscaping with regionally appropriate greenery.
“We are trying to pursue being greener in our supply chain. What is needed is to try to develop a larger, more robust chain of diverse suppliers.”
Creating a more sustainable supply chain is a priority throughout the commercial sector, including the gaming industry. Integrating a company’s supply chain into its CSR practices can both multiply the impact that a company can have and help guide smaller companies in the value chain to make effective and worthwhile CSR commitments.
Generally, engagement in a company’s supply chain takes one of two forms: 1) through supplier diversity initiatives designed to encourage and support smaller and minority-owned businesses, and 2) supplier sustainability to help strengthen and track environmental goals. Since all gaming industry operations depend on third-party vendors to provide needed products and services, the operations and effects of the supply chain greatly contribute to a gaming company’s overall CSR efforts and assessments.
Supplier diversity ensures a varied supplier base in the procurement of goods and services for a company. Supply chain sustainability emphasizes that vendors participate in environmental and social practices like sustainability, fair labor, health, and safety. In both cases, priority business is then given to those vendors that meet diversity or sustainability criteria. And if CSR metrics are captured by vendors, these figures may feed into a gaming company’s CSR reporting.
Thirty percent of AGA member respondents have standards related to CSR that their supply chains must meet in order to do work for them. Just because a supplier may not meet these standards, however, does not mean that they lose out on working with a gaming company. Many gaming companies have programs that help train supplier companies to engage in many aspects of CSR work, particularly around diversity and inclusion and sustainability. For the respondents that engage in this type of supplier training, they find that suppliers are keen to get involved and makes them stronger companies, which improves the supply chain for the entire industry.
For supplier sustainability specifically, at least one AGA member respondent encourages its suppliers to share relevant CSR data with the company, and more than half of their suppliers do so. This makes it easier to include its supply chain into their sustainability measurements and goals for carbon emissions reduction, which is necessary to determine Scope 3 emissions.
Companies in all industries need to evolve to address new challenges and expectations from stakeholders to continue strong CSR engagement. To continue to be a leader in and take advantage of these changes in CSR across the private sector, gaming industry members are modifying the way they develop and manage their CSR initiatives.
The most common forward-looking change that AGA member respondents report is that they will be increasingly proactive in tracking, reporting, and mapping their CSR programs. The gaming companies with well-established CSR initiatives are already highly engaged in this work, but there are growing opportunities for all companies to conduct this type of evaluation.
The drive to improve evaluation and measurement is leading the gaming industry’s CSR efforts to embrace opportunities in technology—like big data and artificial intelligence—to assist in these types of evaluations. At the same time, companies are leveraging their partnerships with academic institutions and nonprofits to better understand the data and metrics behind community and societal challenges. Better data and reporting will provide needed information to quanitfy and convey the business value of CSR to key stakeholders.
“CSR is an evolutionary effort. CSR in the gaming industry is quite young, and we are looking at some of what is done in other industries, especially where types of metrics and measurements might be applicable for us.”
Alternatively, while essentially all respondents forecast the growing importance of mapping, tracking, and reporting, there is also significant talk on how these same CSR strategies need to be flexible to address new issues to companies and their communities. While the respondents see great value in firm strategies to encourage strong outcomes and evaluations, there is an understanding that their companies need to adopt CSR practices that allow them to be adept at addressing new and immediate concerns. Natural disaster response remains the main example of this, but a few respondents want to have similar flexibility for social issues that may appear with little warning.
When asked about what groups of external stakeholders are important to the future of CSR at their companies, AGA member respondents suggest two key groups hold significant sway in how they will continue to address their community engagement moving forward: customers and nonprofit partners.
The changing demands of consumers and their expectations are primarily what companies discussed. Among millennials especially, CSR, community engagement, and brand reputation are paramount drivers to both work for and patronize a business. Adweek reports that millennials represent $2.45 trillion in spending power, and Cone Communications’ research shows that 70% of them will spend more on brands supporting causes they care about.
“Caring about” causes, however, cannot start and stop with a company making an announcement, writing a check, and reaping benefits to their brand. Authenticity is important, and lackluster CSR initiatives that do not have the support of the corporate mission may not offer any positive externalities for the company engaging in them.
“Progress will come in incremental steps. So commitment has to be perpetual, there isn’t a magic wand to enact positive change. corporate responsibility requires a long-term view. We’re doing it for the generation that exists now to solidify the long-term success of our business, communities, and longevity of the planet.”
This need to be “authentic” is well understood by the gaming industry, but respondents have different ideas on how to maintain or grow that authenticity. Some equate “too much press” with inauthenticity, but are in the process of evolving their CSR communications so that they can share the positive work and outcomes they have achieved with appropriate stakeholders. Others are concerned that too much breadth in their CSR portfolios may convey that they do not have a core purpose regarding their CSR engagement strategies. Accordingly, some companies are looking at ways to intensify their work in fewer areas.
The gaming industry has long-standing partnerships with many national and community-based nonprofit partners, and has on occasion supported these partners in other ways. However, many AGA member respondents see their relationships with these nonprofits as essential to evolving their CSR work moving forward.
While nonprofits have always done much of the on-the-ground work that companies would like to accomplish through their CSR initiatives, there are times where the nonprofit capacity to do so is not present. As evidenced particularly in their efforts with food waste, gaming companies are seeking ways to either help increase nonprofit capacity or take on some of the work in-house. While money and funding are an important part of this, other corporate resources can be leveraged that the gaming industry already executes well, including skills-based volunteering and partnership building. Many AGA member respondents see formalizing and expanding these efforts as likely in the future.
By expanding efforts to track and evaluate their work, increasing its ability to respond quickly to new challenges, maintaining strong relationships with consumers and nonprofit partners, and prioritizing authenticity in the CSR work it does, the gaming industry is preparing for the next 10 years of CSR programs. While the industry is leading the private sector in many areas of CSR work, particularly in charitable giving, employee engagement, recycling, energy efficiency, and volunteering, maintaining that leadership in a changing CSR environment is a challenge the gaming industry is ready to accept.
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