Less than a quarter of charities report their ESG impact

Environmental, social and governance (ESG) reporting is being ignored by almost three quarters of charities.

Research has found that just 23 per cent of charities are referencing their ESG activity in their annual reports and websites.

However, none are including a specific ESG section in their annual report. When it is covered it is referenced in a broader section covering a range of topics.

Only a third (34%) of charities are referencing governance codes they are adhering to, including the Charity Governance Code.

The analysis of 114 charities’ annual reports and websites, carried out by finance firm RSM, notes that almost all (98%) stated that they are meeting public benefit requirements, which is “directly linked to ESG considerations”.

“The charity sector has had an encouraging start to its ESG journey,” states RSM’s report.

“Charities now need to consider how to define and communicate their impact on other people and the planet more clearly in their annual reports.”

It adds that environmental reporting “is where the charities sector is behind corporate reporting”.

“Many may assume that because a charity’s entire purpose is to make positive change that they do not need to consider their sustainability. Charities must inherently be for the public benefit but this also means that they should do no harm, and that can apply to our planet.”

RSM concludes that “pulling all the different elements of ESG into a cohesive strategy and communicating the agreed strategy to the right stakeholders will be the next step forward for many charities”.

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