SUSTAINABLE FINANCE
IN THE WORLD OF F1

This trend ties into a larger business movement called ESG—Environmental, Social, and Governance. Companies with strong ESG commitments want to partner with organizations that meet those same standards. F1 teams that prioritize sustainability can stand out to these companies. For example, Williams Racing’s goal of becoming climate positive by 2030 has helped them build new sponsor relationships and raise their profile among fans and investors. Sustainability, in this context, becomes a type of capital—something teams can invest in to grow their financial value.

But it’s not just about avoiding costs. Fans, especially younger ones, are increasingly drawn to brands that take environmental issues seriously. Teams that lead in sustainability can protect their reputation and build long-term fan loyalty. In other words, sustainability isn’t just about protecting the planet—it’s also about protecting your business. By investing in environmental strategy today, F1 teams are reducing future risks and building financial resilience for whatever comes next.

Cities or private promoters typically pay race hosting fees to Formula 1 that range from $20 million to $60 million per year, depending on the location, contract length, and whether it’s a street circuit or permanent venue. These fees are a core part of Formula 1’s revenue stream. On top of that, local governments or promoters often invest in infrastructure upgrades, security, public transport, and event staffing. When sustainability comes into the picture—like switching a 

venue to run on renewable energy, installing large-scale recycling and composting stations, or improving pedestrian and cycling access—those costs rise. A city looking to meet F1’s environmental standards could face millions in additional expenditures.

Making an event more sustainable requires shared investment. Take renewable energy at the track, for example: the upfront installation of solar panels, backup battery systems, or switching to renewable energy providers can be extremely costly. Some circuits, like the Circuit de Barcelona-Catalunya, have taken on this investment themselves. In other cases, local governments subsidize energy transitions as part of a broader environmental policy. For waste management, the cost of setting up recycling and composting systems can range from thousands to hundreds of thousands of dollars. These are typically paid for by event organizers or local waste services, sometimes with branded support from sponsors or teams that want to enhance their public image.

Transportation is another major area of concern. Encouraging low-emission transport—like electric shuttle buses, improved pedestrian routes, or better access to rail—requires infrastructure planning and funding, usually provided by the host city. Cities like Singapore and Montreal have successfully integrated public transport into their race-day logistics, reducing car traffic and associated emissions. Additionally, achieving environmental certifications like ISO 20121, which signals that an event is being run sustainably, comes with the cost of audits, evaluations, and reporting systems—expenses often covered by promoters or municipalities.

Despite the rising costs, many host cities continue to invest heavily in sustainability upgrades. Why? Because the economic impact of a Grand Prix is significant. The Austin Grand Prix brought in an estimated $434 million in direct and indirect economic activity in 2022. The Mexican Grand Prix has reported more than $700 million in economic impact in some years. The Singapore Grand Prix, known for its sustainability efforts, has generated over $100 million annually, largely through tourism and hospitality. For cities trying to position themselves as eco-conscious, global event destinations, aligning with F1’s sustainability goals is now a competitive advantage. In some cases, if a city fails to meet evolving environmental standards, it could risk losing its race slot altogether.

F1 teams are also increasingly involved in shaping greener race operations. Remember we talked about team initiatives from teams like Mercedes and McLaren? They have publicly supported environmental planning with host cities and even contributed to sustainable race-day operations. Sponsors are part of the picture too. Brands looking to associate with green values are more likely to support races that make real efforts to reduce their environmental footprint. In certain events, teams and sponsors work together to power hospitality zones with renewable energy or offset fan travel emissions. For these companies, sustainability is not just about ethics—it’s part of how they evaluate partnerships and allocate marketing budgets.

Over time, sustainability is becoming a built-in expectation of hosting a Formula 1 event. Cities that want to attract or retain a spot on the calendar may need to meet higher environmental standards as part of their agreement with Formula 1. In this way, going green isn’t just a public relations move—it’s becoming part of the business model.