Material Social Impact and Sustainability Issues

In 2019, MGM Resorts established a taskforce comprised of executives from strategy, investor relations, human resources, risk, finance, purchasing and other functions. The taskforce’s mandate was to understand the social impact and sustainability landscape and strengthen our company’s disclosures. The taskforce focused on understanding how the Company performed on various ranking platforms, including CDP, ISS and others and initiated a strategy to increase transparency and improve scores. Subsequently, the taskforce initiated a formal materiality assessment to obtain internal and external stakeholder input on priority social impact and sustainability issues. The findings from the assessment, completed in Q1 2020 helped refine and augment the strategy and led to a significant increase in the scope and scale of metrics disclosed in Social Impact & Sustainability Reports.

In 2023, MGM Resorts conducted a second assessment to update the list of material social impact and sustainability issues. This assessment shifted from an inward focused assessment to a more holistic view of social impact and sustainability issues by utilizing the emerging concept of double materiality, considering both how issues affect the organization’s enterprise value and how the organization impacts the environment and society.

The assessments of material social impact and sustainability issues, highlighted in the 2023 Double Materiality Assessment, continue to inform the trajectory of sustainable programs and business strategy at MGM Resorts.

• Double Material Issues: All material social impact and sustainability issues listed on the double materiality map are highly important, as they were distilled from a comprehensive list of 232 potential issues, underscoring the significance and relevance of each identified issue in the assessment results. Those with the highest dual materiality characteristic for MGM Resorts are Water Scarcity, Problem Gambling, Diversity, Equity & Inclusion, Safety & Security, and Climate Change. For example, water scarcity is a double material issue given that MGM Resorts uses water throughout the organization, such as in hotel guestrooms, and across our agricultural supply chain through our food and beverage operations. Therefore, water stress and scarcity could have a potential impact on enterprise value through rising water prices or disrupted availability. Looking externally, MGM Resorts is one of the largest employers and taxpayers in the state of Nevada. As such, the company can have an outsized impact in championing water stewardship in the community.
• Single Material Issues (Inward): Inward-focused material issues represent a potential impact on the company’s enterprise value. In addition to the double material issues, Business Conduct & Ethics, Data Privacy & Cybersecurity, Talent Attraction & Retention, Energy Security, and Money Laundering were identified as imperative issues for their potential impact on enterprise value at MGM Resorts. For example, on the topic of energy, MGM Resorts’ solar array will provide financial stability and predictability in energy expenditures. In addition to solar energy’s cleaner carbon output, it is sourced under known terms representing a financial hedging opportunity. Additionally, external stakeholders identified Climate Change, Water Scarcity and Data Privacy & Cybersecurity as the top issues for a potential impact on enterprise value.
• Single Material Issues (Outward): Outward-focused material issues represent a potential impact on the environment and society. In addition to the double material issues, the assessment identified Community Relations, Human & Labor Rights, Materials & Waste, and Supply Chain Impacts & Disruptions as the most crucial issues for potential impact on the environment and society. For example, scaling innovative waste solutions at the community level reduces landfill contributions. Neglecting waste management practices could lead to excessive landfill contributions. Additionally, external stakeholders specifically identified Materials & Waste, Climate Change, and Water Scarcity as the top issues for potential outward impacts. 

MGM Resorts International’s Vision is To be the World’s Premier Gaming Entertainment Company. We aim to be highly customer centric in our approach, and deliver globally leading gaming and experiences that captivate our audiences and “entertain the human race”. People and Planet form the foundation of this enterprise-wide strategy, underpinning the centrality of environmental and social sustainability to our company’s success.  ​

Social impact and sustainability-related risks are assessed as part of MGM’s overall formal Enterprise Risk Management Process. This process, which is managed by MGM’s SVP of Internal Audit, includes a broad assessment of risks faced by MGM Resorts. The outcome of this process is a risk register which includes: ​

• Risk Statements ​
  
• Risk Owner(s) ​
• Risk Mitigation Activity ​
• Risk Exposure ​
• Link to Strategy ​
• Primary Risk Owner(s) ​
• Secondary Risk Owner(s) ​

Climate Change and other risks have been officially recorded in the Enterprise Risk Management Risk Register. The following summary statement is provided in the Risk Register that is reviewed and approved by the Audit Committee of the Board of Directors: ​

"Some of the Company's properties face increased physical risk associated with severe weather events exacerbated by climate change. This is especially true for properties in close proximity to rivers and oceans. Severe weather events related to climate change have already and are likely to continue increasing supply chain shocks and related price spikes. This is driven by potential impacts on the flow of goods, as well as production constraints of agricultural commodities triggered by drought, flood or fire."