The charity sector should challenge the investment and corporate community on social issues, New Philanthropy Capital (NPC) has said.
Environmental, social and corporate governance (ESG) is a widely used framework in business, and NPC says the current spotlight on ESG means that now is a “key moment” for charities to consider their role in improving social outcomes across the country.
The think tank’s briefing is based on an event with PwC and Share Action and says charities should go beyond talking to the corporate social responsibility side of a business, and instead aim straight for the chief financial officer, if they want ESG to go beyond marketing.
It reads: “The pandemic has started to shift the focus towards the social aspects of ESG, and the cost-of-living crisis will only intensify this gaze. This is a perfect moment for the charity sector to challenge the investment and corporate community on issues ranging from labour practices to human rights.”
“Social change is core to charities’ mission and what they excel at, and this gives them an opportunity to be leaders in ESG,” it adds.
The think tank says charities should identify ESG topics where their organisation has expertise and which is aligned with their mission, and bring this expertise to conversations with businesses and the investment sector.
NPC’s briefing also advises that charities “first look to ensure that their own performance is up to scratch”. For example, by paying the living wage; valuing equality, diversity and inclusion in recruitment and organisational culture; and reducing their carbon footprint.
‘Social change is core to charities mission’
Leah Davis, head of policy and external affairs at NPC, said: “Social change is core to charities mission, providing them with unique knowledge on the ‘social’ aspects of ESG, but they need to act together to create real change.”
Davis suggests larger charities in particular can look to how they can work with their peers to influence investment decisions which affect them.
Catherine Howarth, chief executive of Share Action, said: “A common complaint by investors is that there is little data about social issues. Charities are in a perfect position to tackle this head on, by sharing the breadth of evidence the sector has brought together about measuring the impact of social interventions.”
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