Most voluntary organisations are failing to meet their environmental targets amid “profound financial pressures”, according to new research.
Eastside People’s latest survey of charities and social enterprises’ environmental, social and governance (ESG) progress, released today, found that many were falling below their own climate targets.
On social impact, which includes staff and beneficiary relations, organisations reported making greater headway.
The 141 not-for-profits surveyed also said they were making better progress on governance issues including board development and their organisation’s reputation, accountability and public trust.
But overall, 5% of participating organisations said that they had a “holistic” ESG strategy and just one respondent said this was “fully integrated”.
Some 86% of respondents said they had a basic ESG strategy, with 36% saying theirs was a “work in progress”.
Ahead of a new requirement in the latest SORP, 43% of participating organisations said ESG reporting in their most recent annual report was “minimal.”
The report also revealed that 24% of participating organisations had no one from Black, Asian or other racial minority communities on their senior executive leadership team or board.
Environmental progress relegated to a ‘nice to have’
Three-quarters of respondents told the Eastside People that they considered it important to address the negative environmental impact of their activities.
Despite this, only around 15% of charities rated their progress as “advancing” or “advanced” when it came to addressing the negative environmental impact of their assets, resources, activities, services and workforce.
By comparison, 52% of organisations rated themselves “advancing” or “advanced” on ESG progress generally.
Respondents said they were making particularly slow progress on addressing their carbon footprint, with below-average change on ecological contribution as well.
The report suggested that funding and capacity constraints had resulted in organisations recording their environmental progress as lagging behind social and governance issues.
“Profound financial pressures facing organisations in our sector are forcing many to deprioritise everything beyond their core activities and regulatory requirements,” it reads.
“Many organisations told us that while they want to do more to mitigate their negative environmental impact, they have relegated this to a ‘nice to have’.”
The report added that many organisations have been focusing on “no or low-cost environmental initiatives” due to funding constraints.
