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Sustainability
As a dynamic company with 845 employees in eleven countries, G5 has a responsibility to contribute to sustainable economic, environmental and social development in the countries where it operates. G5 is focused on developing appropriate policies and governance models in these areas. In the sustainability area, the company is focusing mainly on issues relating to its employees, in addition to environmental and ethical issues while our primary goal remains creating value for shareholders.
G5 Entertainment’s sustainability statements for 2024 have been prepared in accordance with the Swedish Annual Accounts Act in a format inspired by the European Sustainability Reporting Standards (ESRS), which forms part of the Corporate Sustainability Reporting Directive (CSRD).
Basis for preparation
The sustainability statements are prepared with reference to the ESRS standards issued by the European Financial Reporting Advisory Group (EFRAG). All sustainability topics included in the report have been assessed as material according to the performed double materiality assessment.
The sustainability statements for G5 Entertainment have been prepared on a consolidated basis with the same scope as the financial statements. The sustainability statements cover the main value chain of the company, including the impacts, risks and opportunities identified in the company’s own operations as well as upstream and downstream of the value chain.
G5 Entertainments upstream value chain consists of Suppliers and Business partners and the downstream value chain consists of Distributors and Customers.
External review
G5 Entertainment’s sustainability statement is covered by external limited assurance. The auditor’s limited assurance opinion regarding the statutory sustainability report can be found on page 83 of the annual report 2024.
Sustainability governance
Board of Directors
Responsibility for sustainability matters at G5 Entertainment sits with the Board of Directors. The Board receives regular updates on sustainability matters from the G5 Entertainment Executive Management Group. The Board reviews and approves the company’s sustainability ambitions and material sustainability topics and reporting.
The Nomination Committee is responsible for assessing and proposing the G5 Entertainment Board of Directors to the annual general meeting. In its assessment, the Nomination Committee has considered that the Board is characterized by the diversity and breadth in terms of competence, experience and background that is required by the Swedish Corporate Governance Code.
The board of directors has adopted written rules of procedures governing its work and the rules are determined annually.
Audit Committee
The audit committee’s main tasks are to monitor the Company’s financial and sustainability reporting, and in respect of the reporting, monitor the efficiency of the Company’s internal controls, internal audits and risk management, keep itself informed regarding audit of the annual report and group accounts, review and monitor the impartiality and independence of the auditor, and assists in conjunction with preparation of proposals to the general meeting’s resolution regarding election of auditors and compensation to the auditors.
The audit committee and the board regularly receive presentations from the Company’s auditor, which ensures that the Company’s internal and external reports fulfill the requirements of a company whose shares are listed on a regulated market.
The audit committee consists of three independent non-executive members.
Executive Management Team
The G5 Entertainment Executive Management Team consists of five members. One of five members is female, four are male. The Extended Management Team consists of 13 members, of which five are female and eight male. The Senior Management team comprises a diverse range of profiles, experience and expertise. All members are expected to stay current with the latest sustainability knowledge and regulatory developments.
To ensure that G5 sustainability targets and key priorities are met, the highest authority in operative decision making in sustainability lies with the Executive Management Team, who are responsible for the oversight of impacts, risks and opportunities.
Sustainability Steering Group
As a sub-set of the EMT, the Sustainability Steering Group, chaired by the CFO discusses strategic sustainability topics, and prepares them for decision-making in the EMT.
Integration of sustainability-related performance in incentive schemes
G5 Entertainment does not currently integrate sustainability-related performance in its incentive schemes.
Risk management and internal controls over sustainability reporting
The work to develop internal controls over sustainability reporting to address risks in prioritized areas is ongoing and will continue in the coming years. External auditors have performed limited assurance on G5’s Sustainability statement.
Environmental information
Climate change
As a software company, G5’s core business operations generate limited CO2 emissions and the exposure to climate impacts and risks is limited. In providing services, the company uses office space, consume energy, buy goods and services, travel, and dispose of waste. The majority of the total carbon footprint comes from purchased goods and services, as well as business travel. The greenhouse gas emissions resulting from these activities are considered impact material. During 2023 and 2024 the company terminated the majority of its office leases, and only retains a few smaller offices. As the vast majority of the staff is working from home, G5’s electricity consumption is therefore aligned with the local energy mix and will improve as corresponding countries reduce their carbon emissions. G5 encourages the use of sustainable energy sources where available. The group’s infrastructure primarily consists of servers. G5 utilises external providers for the majority of its servers and corresponding equipment needed for operations. The majority of G5’s servers are with Amazon Web Services (AWS). According to AWS their infrastructure is 3.6 times more energy efficient than the median data centre and the company has a goal to have 100% of its energy coming from renewable sources in 2025. Where G5 has the opportunity to choose an electricity supplier, the company chooses larger, recognized partners. This is for two reasons, partly because certain functions of the company are dependent on electricity supply and partly because major suppliers are already carrying out their own sustainability work.
As G5 is a geographically diversified company, with offices in eleven countries as of Dec 31, 2024, G5 affects the environment through employee travel. Where possible, the company strives to replace travelling with internet-based communications, such as video conferencing, both for environmental and cost-related reasons. During 2024, most employees worked from home. Transportation types with the least possible environmental impact are used when possible.
As a company in the technology industry, all the employees use computer hardware on a daily basis. As is normal for all companies in the technology industry the hardware needs to be replaced on an ongoing basis. G5 strives, as much as possible, that the expired and outdated equipment is sent for proper recovery. The largest volumes in this respect are created at the company’s office in Ukraine, where most employees are located. Recycling of hardware in Ukraine has not been a priority for the company during the year due to the war.
As the other units in G5 are small and relatively autonomous in terms of administrative issues, recycling is adapted to local conditions and requirements.
Transition plan for climate change mitigation
Currently, the company does not have a transition plan for climate change mitigation.
Approach and policies related to climate change
G5 has adopted travel policies which incorporate the focus on limited travels, a strict approval process for travelling and guidelines for the use of transportation types with the least environmental impact. For hardware G5 has policies that make sure that the company optimises the usage over time and reuses the equipment as far as possible. G5 buys equipment from well-known and market leading brands. It is noted that G5 since 2022, due to the war in Ukraine, have worked actively to provide electricity to both its employees as well as civil society. The electricity production is to some extent done through generators which have an adverse impact on the CO2 emissions produced by the company, however generators are used on the days when normal electricity supply is disturbed.
Performance, Metrics & Targets
G5 does not currently measure emissions according to E1-6 Gross Scope 1, 2, 3 nor total GHG emissions. The company has identified that the majority of the emissions occur at the consumer level. G5 constantly works on making its game more efficient where applicable to attract as large audiences as possible (making the games scalable for older devices, be able to play offline etc.). The energy mix in the users’ country is not possible for the company to impact.
EU Taxonomy
G5 Entertainment has reviewed its activities and evaluated it against the descriptions for applicable activities contained in the act on climate. As for financial year 2024, the review regarding “eligibility” for the financial year 2024 identified no activity from which G5 receives turnover that is defined in the taxonomy. Thus, G5 has no applicable turnover to report in the first out of three mandatory KPI’s. For the other two KPI’s, Investments and Operating Expenses, the company’s assessment is that there are no significant amounts that would be classified as “eligible”.
For further information see page 32 of the annual report.
Social information
Own workforce
G5 is a game development company where employees are the most valuable asset, as they form the core of the production chain. The workforce consists of G5 employees throughout the world (and non-employee workers supplying labor to the company through contractual relationships as defined by ESRS). G5 aims to provide a safe, appealing, and meaningful work culture which is based on meritocracy principles, is free from discrimination, psychologically safe and full of opportunities to learn, develop, and grow professionally. G5’s continued progress in these areas is essential to the long-term success in attracting and retaining talent.
Material impacts, risks and opportunities and their interaction with strategy and business model
G5’s approach to determining material impacts, risks, and opportunities is described in the general disclosures. Within the Own workforce, G5 has identified the following sustainability matters as material. Working conditions, Equal treatment and opportunities for all and within Other work-related rights, Privacy as a company specific matter. G5 has or can potentially have a positive or a negative impact on its own workforce in these matters or these matters are or can potentially become risks or opportunities for G5. In the value chain, the impacts are internal and can occur in the short, medium and long term.
Working conditions
The identified negative impact is or can be workstress or poor or unfair basic working conditions and the positive impact is or can be proactively promoting health and well-being. Risks for G5 associated with working conditions are poor labour retention and attraction, cost of sick leave and increased turnover. For G5 there is an opportunity associated with working conditions, which is to have an attractive employer brand through outstanding employee wellbeing.
Equal treatment and opportunities for all
G5 has identified having a positive impact on skills development of its own workforce and potentially having both a positive and a negative impact on perceived inequality and/or discrimination, equal and equitable working community. Risks associated with poor performance in skills development are risks to product quality and innovation capabilities, as well as the attraction and retention of a skilled workforce. Opportunities from a good performance in skills development are product development, improved employer image and competitive advantage. Opportunities from a good performance within equal treatment means that G5 will attract the best talent available through unbiased hiring and development practices.
For further information see page 36 of the annual report.
Governance information
Business conduct
As a global entity, ethical business conduct is fundamental to the business, which heavily relies on the workforce. Adhering to relevant laws and international guidelines on ethical business conduct is crucial to avoid legal and economic repercussions, and to keep a skilled and efficient workforce as well as to maintain the trust of the company’s customers and business partners. Promoting and encouraging a corporate culture that safeguards employees and stakeholders from potential human rights violations, prevents corruption, and protects whistleblowers is (not only legally necessary, but it is also) central to the internal social strategy and commercial objectives. Business conduct impacts can potentially affect the whole value chain and can occur in the short, medium and long term.
Material impacts, risks and opportunities
Corporate Culture
Issues related to corporate culture such as unclear policies and practices, poor or inconsistent management practices and possible misconduct can have a negative impact on staff motivation and well-being. A poor corporate culture can also increase staff turnover and lead to significant indirect costs, whereas a good and inspiring, ethical company culture can improve staff motivation and job satisfaction.
Corruption and bribery and Protection of whistle-blowers
Various types of mismanagement, including bribery and corruption, can harm individuals and vulnerable stakeholders like contractors and whistleblowers. G5 could face insufficient protection of its intellectual property, might be hindered in safeguarding its intellectual property rights, and could potentially infringe upon the intellectual property rights of others.G5 may not adequately protect its intellectual property, potentially infringing upon the rights of others, while also failing to safeguard its own intellectual property rights. Lack of clarity about the G5’s Code of Ethics and/ or other important policies, poor management or other issues related to the corporate culture may have a negative impact on staff well-being and motivation.
Data and IT security
G5 is exposed to risks relating to system intrusion, cyberattacks and other forms of IT crime, which can endanger or disrupt G5’s business operations, functioning of games and potentially lead to financial consequences for G5.
Business conduct policies and corporate culture
G5 is actively working to promote and uphold a healthy corporate culture working with high levels of integrity towards its employees and stakeholders. G5’s organisational structure is formed as one company even though the organisation is spread over multiple countries working on various games and platforms. Even though the company has local administration in all countries there is a group wide organisational structure that governs the work of all employees and also promotes G5’s corporate culture and compliance with policies such as Fraud and anti-bribery policy.
Management of relationships with suppliers
Management of relationships with suppliers are kept within the respective department. Having established and strong relationships with reliable suppliers reduces the risk in operations. G5 also has procurement specialists to secure competitive prices for goods and services used in the operations of the company.
For further information see page 46 of the annual report.