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Malta’s ESG Revolution in Gaming

Malta's ESG Revolution in Gaming
by
November 13, 2023
in iGaming News, Laws
369

The Malta Gaming Authority (MGA) has ushered in a new era for the remote gaming sector with the introduction of the Environmental, Social, and Governance (ESG) Code of Good Practice. This voluntary code aims to be a beacon of self-regulation, enabling remote gaming companies to align with industry best practices and meet the evolving expectations of key stakeholders.

Commitment to Sustainability

While the ESG Code is not mandatory, the MGA encourages all licensees to embrace it as a means to showcase their commitment to sustainability. By doing so, gaming companies can position themselves as responsible industry players, actively contributing to the enhancement of the sector’s ESG standing.

A Visionary Approach

During a press conference, MGA CEO Carl Brincat highlighted the industry-wide shift towards greater transparency, disclosure, and accountability. He emphasized the importance of active engagement in addressing contemporary social and environmental challenges, positioning the MGA at the forefront of regulatory innovation.

“Beyond mere supervision, we aim to nurture the gaming industry, fostering an environment where operators thrive while prioritizing societal welfare. Our ESG Code reflects this commitment,” Dr. Brincat stated.

Government Backing

Minister for the Economy, EU Funds, and Lands, Silvio Schembri, echoed the importance of the ESG tool in shaping business and investment landscapes. The minister emphasized that embracing ESG metrics is vital for reducing risk and ensuring successful transformations in the remote gaming sector.

Four Phases of Development

The ESG Code’s development involved four comprehensive stages: peer review and research, materiality assessment, stakeholder interviews, and licensees’ consultations. This thorough process resulted in a final Code that effectively addresses the industry’s ESG priorities and stakeholder expectations.

Strategic Framework and Reporting Tiers

The Code identifies 19 ESG topics categorized into three groups: Environmental, Social, and Governance. This framework provides remote gaming companies with a strategic approach to focus their reporting efforts effectively. Recognizing companies’ efforts, the MGA will implement two levels of reporting – Tier 1 and Tier 2 – ensuring sustainability efforts are both focused and impactful.

Flexibility and Streamlined Reporting

To accommodate diverse needs, the Code adopts a flexible approach, allowing reporting entities to choose optional disclosures. Core disclosures have been defined, streamlining reporting efforts and reducing administrative burden. Emphasizing ESG reporting over specific targets, the Code positions itself as a tool for comprehensive industry improvement.

MGA ESG Code Approval Seal

Industry consultation revealed a strong desire for formal recognition, leading to the introduction of the MGA ESG Code Approval Seal. Entities reporting under this Code will be eligible for the seal, showcasing their commitment to ESG. Different seals will be awarded based on whether entities meet Tier 1 or Tier 2 reporting requirements.

Confidential Reporting and Online Facilitation

Reporting under the ESG Code will be confidential, and the MGA plans to launch an online tool to streamline the reporting process. Aligning reporting periods with financial years, the inaugural reporting year is set to commence in 2023, with a submission deadline in the third quarter of 2024.

FAQ

What is the purpose of the MGA ESG Code?
The MGA ESG Code aims to serve as a voluntary instrument for self-regulation in the remote gaming sector, promoting alignment with best practices and addressing evolving stakeholder expectations.

Is the ESG Code mandatory for MGA licensees?
No, the ESG Code is voluntary. However, MGA strongly encourages all licensees to adopt it to demonstrate their commitment to sustainability.

What are the reporting tiers under the ESG Code?
The ESG Code introduces two reporting tiers – Tier 1, a basic ESG standard, and Tier 2, a more aspirational level to ensure focused and impactful sustainability efforts.

Are companies required to disclose specific ESG targets?
No, the emphasis is on ESG reporting rather than setting specific targets. The Code encourages a comprehensive approach to industry improvement.

How was the ESG Code developed?
The development involved four stages: peer review and research, materiality assessment, stakeholder interviews, and licensees’ consultations, resulting in a well-informed and reflective final Code.

What is the MGA ESG Code Approval Seal?
The MGA ESG Code Approval Seal is awarded to entities reporting under the Code, showcasing their commitment to ESG. Different seals are awarded based on whether entities meet Tier 1 or Tier 2 reporting requirements.

Is reporting under the ESG Code confidential?
Yes, reporting under the ESG Code is confidential to encourage open and honest disclosure by reporting entities.

How can entities facilitate the reporting process?
The MGA plans to launch an online tool to streamline the reporting process, making it more accessible and efficient for reporting entities.

When will the inaugural reporting year commence under the ESG Code?
The inaugural reporting year is set to commence in 2023, with the submission deadline scheduled for the third quarter of 2024.

Why is the ESG Code considered a strategic framework?
The ESG Code identifies 19 ESG topics organized into three categories, providing remote gaming companies with a strategic framework to focus their reporting efforts effectively.

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