The environmental impact of humankind has once again been on the front pages over the past month, as world leaders attempted to thrash out a deal at COP26 that would limit global warming to 1.5C.
Unfortunately, they did not achieve this and we will go into COP27 next year with the same goal, as the clock continues to tick ever-closer to the disastrous, metaphorical midnight.
Urgency and action are needed now and while some steps were taken at COP26, they were too small and too slow.
It has been interesting to see the finance sector increasingly wake up to its role in this in recent years. Yet, there remain fears of so-called greenwashing, that words are not matching deeds.
Efforts to ensure that fund managers adhere to the standards that charities rightly expect were boosted during COP26, when a group of charities published a benchmark of eight minimum standards for fund managers on environmental issues. This will allow charities to have a shared baseline to help influence the fund management sector.
But whilst measuring and reducing their environment impact is important for charities, there are other issues that the sector needs to measure, report and improve on.
The environment gets a lot of attention (for very good reasons), but the social and governance parts of ESG are also important.
Whether it is with staff pay, supply chains or other areas, charities have an impact beyond their direct charitable work.
While many predict there will be increased reporting requirements on ESG issues in the near future, it is important for charities to lead the way. There will be a wider expectation that the sector “does good” in all its actions, and proving this could be helpful in maintaining a good reputation.
That is not to say it is always easy to measure every element and the reporting of these areas is likely to be a work-in-progress, but doing so can only lead to improvements.
In this issue, we take a look at how charities are starting to do this and what they need to consider, to help them get ahead of the curve with this trend.
For the same reason, Civil Society Media is launching a new event. The ESG Imperative will take place on 31 March 2022 at BMA House in London. For more details please the event booking page.
Tristan Blythe Editor, Charity Finance