Around two-thirds of charities do not measure their carbon footprint, according to a new report on voluntary organisations’ environmental, social and governance (ESG) progress.
The research, by sector leaders’ umbrella body ACEVO and consultancy Eastside People, found that most charities do not have an ESG strategy and that their progress on environmental concerns lags behind social and governance ones.
Fewer than one-in-20 charities that responded said they had a holistic, fully integrated ESG strategy.
Meanwhile, two-fifths of respondents said they were “considering developing” an ESG strategy but had not yet defined what it means for their organisation.
The results came from Eastside People’s recently published ESG survey tool, which is designed to enable charities to input their own data and receive feedback about their progress.
Claiming to be the UK’s first charity ESG survey, it collected responses from 78 not-for-profit organisations and charities with annual incomes ranging from under £100,000 to £151m.
Environmental issues lagging behind
One-in-10 charities saw themselves as “advanced” in taking steps to address the negative environmental impact of their activities and services.
Meanwhile, less than one in five said they were “advanced” in monitoring the negative environmental impact of their assets and resources such as its properties.
Just one-third of charities said they were doing any form of carbon footprint measurement compared to 52% in the private sector.
Less than one in five charities surveyed had a net-zero plan.
Governance progress more advanced
The survey showed that charities were most advanced on governance issues.
However, just under half of larger charities (income over £1m) had undertaken an independent review of board effectiveness in the last three years, the survey says, despite it being recommended practice under the Charity Governance Code.
Around one-third of these larger charities had at least one trustee who had served more than the recommended maximum tenure of nine years, the survey found.
This issue is compounded in smaller organisations, which the report states could be due to their access to a smaller pool of candidates, making it harder to recruit for diverse boards.
‘Much more to do’
On the ESG survey tool, ACEVO chief executive Jane Ide said: “Developing understanding and taking action on ESG is an important part of chief executives’ and senior leaders’ roles both for strategic planning and day-to-day operations, to optimise governance, enhance contribution to the goals of society and minimise environmental impact for the causes and communities their organisations serve.
“We welcome the availability of a free tool that can be used by all charitable organisations and their leaders to understand, assess and optimise their ESG goals and are proud to work with Eastside People to raise awareness of the tool and its benefits so as to support leaders to make the biggest possible difference.”
Eastside People chief executive Richard Litchfield said: “We developed the ESG survey tool and made it completely free of charge to use because we feel very strongly that charities and social enterprises should be able to review and reflect on their environmental footprint, social impact and governance practices, regardless of their size or budget in a social sector context.
“Our first results have provided a benchmark for the sector but show clearly that there is much more to do.
“Our intention is for the ESG survey to provide annual sector-wide analysis for more and more organisations, delivering more knowledge and insight year on year.”
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