As part of its first Environment Social Governance report, Warner Music Group announced on Tuesday that it will waive unrecoupled debts for heritage artists, following Sony Music, which made that move last year.
Just hours later, a source confirmed to Variety that Universal plans to make a similar announcement as part of its ESG report later this year; Music Business Worldwide first reported that news.
What that means is that eligible artists, songwriters and others who had not recouped their advances and/or other expenses will now receive royalties that previously had gone toward paying down those expenses. That situation has meant that many artists have received low or even no royalty payments as the company applied their earnings to paying down debts they may have incurred through signing advances or other recoupable expenses that standard record-label contracts oblige the artist to cover.
In the report, WMG states that it has “announced a legacy unrecouped advances program where, for our artists and songwriters who signed to us before 2000 and didn’t receive an advance during or after 2000, we won’t apply their unrecouped advances to royalty statements for any period beginning July 1, 2022 or after.
“The program will also benefit other artist royalty participants such as producers, engineers, mixers and remixers.”
The purpose of ESG reports is to “communicate to key stakeholders and a baseline for WMG to measure its ESG progress in areas including employee wellbeing, Diversity, Equity, and Inclusion, social impact, and climate change.”
Other highlights from the Warner report include:
- WMG calculated its first direct greenhouse gas emissions footprint (including emissions from Scopes 1 and 2, as well as employee travel) and will propose a target to the Science-based Targets initiative in 2022.
- WMG became a founding signatory of the Music Climate Pact, developed with support from the UN Environment Programme, to collectively tackle the industry’s environmental impacts.
- The company avoided using 46 tons of virgin plastic by producing 100% recycled vinyl records for artists like Coldplay, Ed Sheeran, Gorillaz, Biffy Clyro, and Foals.
- In light of the impacts of the pandemic, WMG enhanced investments in mental health programs, learning and development, and technology to support its people.
- In 2021, WMG was certified as a Great Place to Work in the U.S. and France, and was included in the Human Rights Campaign’s Corporate Equality Index for the third consecutive year.
- WMG established a set of north star DEI commitments, put in place new support for its 45 Employee Resource Group chapters, and developed new recruitment and educational programs to foster more inclusive thinking and behaviors.
- The company piloted mental health initiatives for its creative community. It is also launching a legacy unrecouped advances program for eligible artists and songwriters who signed with WMG before 2000 and didn’t receive an advance during or after 2000. The program will also benefit other artist royalty participants such as producers, engineers, mixers, and remixers. It goes into effect for royalty periods starting July 2022.
- Throughout the pandemic, WMG contributed to more than 20 non-profits around the world, to aid frontline workers, small business owners, out of work concert/touring staff, and others who need assistance during this difficult time.
- Since it was established in 2020, the $100 million Warner Music Group / Blavatnik Family Foundation Social Justice Fund has pledged $22.5 million in grant commitments to 24 organizations.
- The company increased the representation of independent directors on its Board committees and the Board’s Nominating and Corporate Governance Committee has assumed oversight of ESG.
WMG CEO Steve Cooper said: “Becoming a more equitable and sustainable company is a moral, commercial, and creative imperative. WMG operates in more than 70 countries around the world, each with distinct customs, cultures, needs, and regulations. So, our sustained, global approach to ESG requires us to have a sophisticated local, individualized line of action. We’re exploring what creating positive change should look like for our company, our artists and songwriters, and the broader community. We’ve made some great strides so far, but this report isn’t just a snapshot of what we’ve done to date – it’s a long-term commitment to action and accountability.”