Reporting on your charity's environmental impact
Communicating with stakeholders about your charity's environmental impact helps to demonstrate that your organisation is taking responsibility for its activities. Regular reporting can also help to drive improved environmental outcomes for your charity. This page sets out some considerations.
It is becoming increasingly important for charities to understand and manage the impact that their operations have on the environment. There are many and varied good reasons for communicating your charity's environmental policies and goals.
- With growing evidence of climate change, consumers increasingly aware of environmental issues and want to know that charities they support operate in environmentally sound ways.
- Charity staff and volunteers also want to be assured that their organisation is environmentally responsible.
- Reporting on Environmental, Social, and Governance (ESG) issues has become the norm for large corporations. Donors and funders, being used to ESG reporting, are increasingly likely to want to see similar information being presented by the charities they fund.
- Government and other contracts may require specific reporting on the measures a charity is taking to reduce its carbon emissions (see below).
- Measuring and reporting on energy use and greenhouse gas emissions can help drive improvements within your charity.
- Voluntary sector organisations can save money by introducing better energy management practices such as installing LED lighting and solar panels.
What the law says about environmental impact reporting
The Statement of Recommended Practice (SORP) for accounting and reporting by charities currently does not require environmental impact reporting. However, the Charity Commission encourages charities to take environmental responsibility and to carry out environmental activity, so long it is consistent with their purposes.
This is an important point: under charity law, charities must act within their charitable objects, and all their assets must be used to further those objects. Charity trustees also have a general duty to preserve and manage the charity’s property in a way which furthers their charitable purposes.
Interpreting to what extent sustainability commitments and environmental impact reporting relate to an organisation's charitable aims will be an important consideration for charity trustees.
Apart from this, there are a already number of requirements in place for charitable companies and larger charities.
Larger charities must report on social, environmental and ethical issues with regard to their investments.
The new environmental duty for company directors in the Companies Act 2006 requires directors of charitable companies to take into account the impact of the company’s operations on the community and the environment.
The Streamlined Energy and Carbon Reporting Regulation (SECR) makes it mandatory for large businesses in the UK to annually report on their energy and carbon emissions as well as any efficiency measures.
In addition, the Energy Performance of Buildings (Certiﬁcates and Inspections) (England and Wales) Regulations 2007 require buildings to have an Energy Performance Certiﬁcate whenever they are built, sold or rented out. The Certiﬁcate shows how energy efﬁcient a building is.
Challenges to sustainability reporting
Reporting on environmental impacts, carbon emissions and sustainability comes with numerous challenges. Some of these are:
- There is also no universally agreed way to measure sustainability or environmental impact.
- The topic as a whole is evolving, and there is little formal guidance available on best practices.
- ESG reporting can cover everything from carbon emissions to gender pay gaps.
- Charities are mandated to remain true to their charitable aims and could be questioned about devoting too much time and expense to environmental issues.
- Few charities are currently disclosing how their property investments affect the environment.
- Smaller charities with few resources may find detailed reporting on energy use a considerable challenge, diverting staff time away from their charitable objects.
- Achieving net zero/carbon neutrality may be unachievable for smaller voluntary organisations.
- There is a risk of some charities using standardised 'boilerplate' text to cover themselves in relation to environmental impact. This could rebound on the sector, with charities being accused of 'greenwashing'.
How charities are reporting on their environmental impact
Despite the challenges, voluntary sector organisations are reporting on their environmental impact and their efforts to make their operations environmentally sustainable. The Charity Commission says it is good practice, certainly for larger charities, to think about these issue in relation to their accounting information. While the number of charities reporting on their environmental impact in their annual reports and accounts is still relatively low, many charities are now providing information on environmental impacts on their websites.
Some examples of how charities are communicating environmental sustainability include:
The National Trust
The National Trust's 2022 Annual Report has a section on climate and environment. This includes an analysis of how climate change is impacting the coastline which the Trust owns, risks and opportunities related to climate change and detailed tables setting out its carbon targets and how they are being measured.
Cancer Research UK
Cancer Research UK has published a strong public commitment to reducing the environmental impacts on its website. This charity publishes detailed Environmental Impact updates on its website. These set out:
- long-term environmental commitments to align with the UN targets of a 50% drop in emissions by 2030 and being net-zero by 2050
- summary reports on carbon emissions for the past year
- commitments for action on sustainability and environmental impact reporting for the year to come
- detailed environmental data and description of the methodology being used.
The British Red Cross
As well as monitoring energy use and publishing a policy statement on reducing its carbon footprint, the British Red Cross has set up an internal Environmental Performance Improvement Fund worth £50,000 per year. Money from the fund has gone towards switching to LED lighting, improving building insulation and upgrading boilers.
The Anna Freud Centre
For an example of a smaller charity's approach to reporting, the Anna Freud Centre publishes a web page setting out its Carbon Reduction Plan.
Since September 2021, suppliers bidding for government contracts with an anticipated value of over £5m per year are required to demonstrate their commitment to achieving ‘Net Zero’ by 2050 within the UK by creating a Carbon Reduction Plan. A typical carbon reduction plan includes six elements:
- A declaration of your charity's commitment to achieving net zero emissions (including a target year)
- Baseline emissions footprint (a calculation of the organisation's carbon footprint against which future plans will be compared)
- Current emissions report (the emissions from the most recent year calculated - must be less than 12 months old)
- Emissions reduction targets (5-year reduction target and report of progress against pre-existing targets)
- Reporting on completed carbon reduction projects and future plans for carbon reduction measures
- Declaration and Sign Off (a director must sign off the plan).
The current emissions report must be updated every year. The Plan must be published on the organisation's website.
If your charity needs to draw up a plan, the Green Small Business website offers a clear, comprehensible guide to preparing a Carbon Reduction Plan.