News

Environmental sustainability duty of all, says Commission

Finance | 30 Jan 2008

The Charity Commission will look kindly on charities striving to reduce their environmental impacts even if their objects are not environmental, a Commission legal adviser said last month.

Emma Knuckey told delegates at a Commission discussion event on charities’ environmental responsibility that while there were constraints on the degree to which charities could spend money pursuing environmental concerns within the current framework, there was more flexibility than many realised.

Q&A guidance 

The Charity Commission set up the event to explore how it could assist charities asking questions about how far they could tackle environmental responsibility issues at a time when donors, beneficiaries and staff were asking what organisations were doing. It hopes to issue question-and-answer guidance later this year.

Clare Thomas, chief grants officer at the City Bridge Trust, which has recently funded a programme of eco-audits by charities, called on the Charity Commission to update its Hallmarks of an Effective Charity publication to incorporate environmental issues, and suggested that the Sorp committee should consider the extent to which charities should report on it in their statutory accounts during its current review.

Sorp committee 'reluctant to impose burden' 

However, Nigel Davies, secretary to the Sorp committee, said the regulator’s current position was that it was reluctant to impose such a burden on a sector ill-prepared to carry it.

Mark Parker, head of development at Bassac, agreed that sustainable development was the responsibility of all charities, and said the challenge was getting trustee board to engage with the issues. “It needs to be integrated into what organisations do rather than separated off as an issue that becomes too big to deal with,” he said.

Mark Walton of Every Action Counts, a consortium of national voluntary organisations established to promote environmental responsibility, added that it was important to relate environmental actions back to a charity’s core mission. He said that while the financial incentive of short-term measures such as turning lights off at night were a good starting point, these were only quick wins and there would be a cost involved in charities taking things to the next stage.

Reputational risk 

Knuckey added: “There is increasing expectation for charities to look at this if they are to be seen as organisations upholding good values.”

She pointed out a new requirement on reputational risk under the Companies Act, which came into force earlier this month stating that directors of charitable companies must act in the way they “consider would be most likely to achieve the company’s purposes and in doing so must have regard to the impact of the company’s operations on the community and the environment”.

While this was not a statutory requirement for non-charitable companies, Knuckey said that “most charities in time will probably have to have some regard to this”.