ESG and the Charity Sector

Civicus report has cited a triple planetary crisis combined threat of climate change, biodiversity loss and pollution are a global emergency.

2023 was the hottest year on record. Extreme weather can decimate communities accelerating and deepening inequalities regarding healthcare and putting at risk those most vulnerable in our society. In 2019 UK Gov amended the Climate Change Act to commit the UK to achieve 100% net zero by 2050. United Nations is pushing countries to accelerate these pledges by a decade to avoid the 'ongoing climate disaster’.

Charity Digital Survey conducted in 2023 in the UK charity sector cites 71% of charities expect to be impacted by climate change as it exacerbates inequality, poverty within the communities they serve, yet only 52% of charities surveyed when asked if they had taken serious action responded NO/NOT SURE. We are seeing from the data organisations want to make an impact but are confused as to where to begin, a lot of businesses in the private sector are also stifled by the same challenges and don’t know where to start. There’s a lot of confusing jargon and acronyms, building a wider ESG strategy can be daunting, there is fear of making pledges publicly and falling short of commitments, greenwashing and getting it wrong.

So how can an ESG seamlessly align to the charity sector:

1. Environmental Responsibility (E):

• Theres an opportunity for Charitable organisations to focus on environmental sustainability. By reducing their own carbon footprint and aligning their mission with environmental causes.
• Implementing eco-friendly practices into their operations can reduce costs in saving energy, reducing paper waste – integrating sustainability into decision making when fund raising and creating events can make a huge impact.
• Integrating environmental causes like climate change, conservation, and reforestation. Will attract ESG-conscious donors and galvanise the recruitment of volunteers especially from a younger generation.

2. Social Impact (S):

• The social aspect of ESG assesses an organisation’s relationships with employees, customers, and communities. It includes diversity, inclusion, labour practices, and community engagement.
• It’s in a charities DNA to align with the social aspect of ESG. In many instances their core purpose is to address social issues like poverty alleviation, education, healthcare, and social justice.
• Social impact extends beyond communities on the receiving end of charity work—it also encompasses how charities treat employees, volunteers, and other stakeholders.

3. Governance and Transparency (G):

• Good governance is essential for any organisation, including charities. Transparency, ethical practices, and accountability are critical.
• Charities that embrace fair labour practices, diversity, inclusion, and community engagement exemplify the governance and transparency component of ESG. Charities need to ignite; they have the power to support and galvanise their local communities to empower them to reimagine what is possible.

In summary, the charity sector can be a powerful force in tackling climate change, alignment with ESG principles is the perfect partnership in fostering strong relationships with stakeholders, enabling charities to drive positive change and contribute to a more sustainable future for the communities they serve.

Get in touch with an expert at Pathway to Carbon Zero and start your journey today.