Entain plc is required to report under IFRS S2 Climate-related Disclosures beginning FY2024. From our comprehensive assessment of current processes and reporting practices, we have identified several key strengths that provide a solid foundation for compliance. The company demonstrates strong capabilities in environmental reporting and climate governance, with well-established processes for GHG emissions measurement and net zero commitments.
However, there are areas where enhancement will be needed to meet regulatory obligations and more effectively manage risks. Primary gaps exist in strategy disclosures and financial impact quantification, particularly around scenario analysis robustness and quantitative financial impact assessments. The company would benefit from strengthening its climate resilience analysis and enhancing integration of climate considerations into financial planning to ensure full compliance and optimal risk management.
Requirement: Disclose how the entity's governance body oversees climate-related risks and opportunities, including responsibilities, skills assessment, information flow, strategic oversight, and target monitoring. Also disclose management's role in assessing and managing climate matters.
Framework Reference: IFRS S2 Paragraphs 5-7
Current State:
Strengths: Entain has established a robust governance structure with board-level oversight through the Sustainability & Compliance Committee. The CEO holds explicit responsibility for climate approach, and a dedicated Net Zero Action Group coordinates implementation. The governance structure shows clear reporting lines from operational teams through to board committees.
Weaknesses: The disclosure lacks specific details on how the board assesses climate competencies, the exact frequency of climate updates, and how climate considerations are integrated into strategic decisions. The link between climate performance and executive remuneration is not clearly established.
Peer Practices:
Score: 3.5/5
Recommendations for Enhancement:
Requirement: Disclose climate-related risks and opportunities over short, medium, and long term, their effects on business model, strategy, and financial position, and the entity's climate resilience including scenario analysis.
Framework Reference: IFRS S2 Paragraphs 8-23
Current State:
Strengths: Entain has set an ambitious net zero target by 2035, ahead of many peers. The company has identified some climate risks and opportunities, particularly around energy efficiency and renewable electricity procurement. Integration with enterprise risk management shows strategic thinking.
Weaknesses: The disclosure lacks comprehensive scenario analysis, quantitative financial impact assessments, and clear time horizon definitions. Physical risk assessment appears limited, and the resilience of the business model under different climate scenarios is not demonstrated.
Peer Practices:
Score: 2.5/5
Recommendations for Enhancement:
Requirement: Disclose processes for identifying, assessing, prioritizing, and monitoring climate-related risks and opportunities, including integration with overall risk management.
Framework Reference: IFRS S2 Paragraphs 24-26
Current State:
Strengths: Climate risks are integrated into Entain's Enterprise Risk Management framework. The company conducts materiality assessments and has established working groups for implementation. TCFD reporting indicates some risk management processes are in place.
Weaknesses: The specific inputs and parameters for risk identification are not detailed. The methodology for assessing likelihood and magnitude needs clarification. The process for identifying climate opportunities is not explicitly described.
Peer Practices:
Score: 3/5
Recommendations for Enhancement:
Requirement: Disclose metrics for climate risks and opportunities, GHG emissions (Scopes 1, 2, 3), climate-related targets, and progress against targets.
Framework Reference: IFRS S2 Paragraphs 27-37
Current State:
Strengths: Entain provides comprehensive GHG emissions data across all scopes with third-party verification. Science-based targets are set with clear reduction pathways. Good disclosure of renewable energy usage and energy efficiency initiatives.
Weaknesses: Limited metrics for physical climate risks, no disclosed internal carbon price, and absence of climate-related remuneration metrics. Transition risk metrics beyond emissions are not comprehensive.
Peer Practices:
Score: 4/5
Recommendations for Enhancement:
| IFRS S2 Requirement | Current State | Score | Status | Recommendations | Source |
|---|---|---|---|---|---|
| GOVERNANCE SUB-ELEMENTS | |||||
| Para 6(a)(i): "How responsibilities for climate-related risks and opportunities are reflected in the terms of reference, mandates, role descriptions and other related policies" | Sustainability & Compliance Committee has climate oversight. CEO responsible for climate approach. | 4/5 | Strong | Formalize climate responsibilities in role descriptions | ESG Report p.10 |
| Para 6(a)(ii): "How the body determines that the appropriate skills and competencies are available" | Not explicitly disclosed how board assesses climate competencies | 2/5 | Moderate | Implement formal skills assessment process | Not found |
| Para 6(a)(iii): "How and how often the body and its committees are informed about climate-related risks and opportunities" | Regular updates mentioned but frequency not specified | 3/5 | Moderate | Establish quarterly reporting cadence | ESG Report p.10 |
| Para 6(a)(iv): "How the body and its committees consider climate-related risks and opportunities when overseeing strategy" | Climate integrated into sustainability strategy but specific oversight processes unclear | 3/5 | Moderate | Document climate consideration in strategic decisions | ESG Report p.6 |
| Para 6(a)(v): "How the body oversees target setting and monitors progress" | Net zero targets set but monitoring process not detailed | 3/5 | Moderate | Implement quarterly progress reviews | ESG Report p.29 |
| Para 6(b)(i): "Whether management role delegated to specific position or committee" | Net Zero Action Group established with clear structure | 5/5 | Strong | Maintain current structure | ESG Report p.10, 29 |
| Para 6(b)(ii): "Whether management uses controls and procedures" | ESG Steering Group meets 10 times per year | 4/5 | Strong | Document control procedures | ESG Report p.10 |
| STRATEGY SUB-ELEMENTS | |||||
| Para 10(a): "Description of climate-related risks and opportunities" | Some risks identified but not comprehensive | 2/5 | Moderate | Expand risk and opportunity identification | Annual Report TCFD |
| Para 10(b): "Whether risks are physical or transition" | Limited categorization of risk types | 2/5 | Moderate | Clearly categorize all risks by type | Partial in TCFD |
| Para 10(c): "Time horizons for each risk and opportunity" | Time horizons not specified for individual risks | 1/5 | Poor | Define time horizons for all risks | Not found |
| Para 13(a): "Current and anticipated effects on business model" | Limited disclosure on business model impacts | 2/5 | Moderate | Assess climate impacts on each business segment | Limited info |
| Para 16(a): "Effects on financial position, performance, cash flows" | No quantitative financial impacts disclosed | 1/5 | Poor | Develop financial impact quantification | Not found |
| Para 22: "Climate resilience and scenario analysis" | No comprehensive scenario analysis disclosed | 1/5 | Poor | ||