Just under a quarter of charities involved in a snapshot survey into charities’ environmental, social and governance (ESG) have no one from Black, Asian or other global majority communities on their senior executive leadership team or board.

The findings, published by charity leaders’ body Acevo and consultancy Eastside People, found that progress to embed equality, diversity and inclusivity (EDI) into organisations was poor.

A study by Charity Times three years adds further weight to this assertion around EDI. This found that among charity chief executives over the previous 50 years only eight had been people of colour.

Governance and SORP

Governance concerns are also raised, with ACEVO and Eastside People also finding that two in five charities have at least one trustee who has served on their board for more than the recommended maximum tenure of nine year.

They also found that “worryingly” almost nine in ten respondents were either unaware or somewhat unaware of changes to the SORP, which were announced in November and see thresholds for submitting and auditing accounts altered.

Regulatory complexity

Challenges such as regulatory complexity and budgetary constraints are proving barriers to further progress on ESG, the study found.

Charities taking part said the top challenge was navigating more than 100 external, ESG related accreditations, standards and frameworks.

Just one in 20 charities involved have a holistic ESG strategy in place “with charities having to choose where to focus their time and budgets”, said researchers.

More than two in five said their ESG reporting in their most recent annual report was “minimal”.

“The profound financial pressures facing organisations in the sector are forcing many to deprioritise everything beyond their core activities and regulatory requirements,” said researchers.

“In this context, many organisations said that while they want to do more to mitigate their negative environmental impact, they have relegated this to a ‘nice to have’.”

Staff wellbeing

Another finding is that environmental concerns are taking a secondary role to issues such as staff wellbeing and improving governance.

Staff considerations are charities’ top priority, with more than nine in ten rating it as “very important” and the area where they are making the greatest progress

Three in four charities are paying staff at least the Real Living Wage, however there remains a “significant minority” who are unable to do this, with smaller charities in particularly struggling to offer this level of pay.

In contrast, almost nine in ten charities said they have only a basic ESG strategy that is a “work in progress” or don’t yet have one in place. Half are considering having one though.

Researchers said: “This indicates a broad-based buy-in for ESG as a concept across the sector but highlights the difficulty of developing and implementing a holistic strategy with only one organisation describing it as ‘fully integrated’ into their organisation.”

The ESG survey is an annual reporting tool run by Acevo and Eastside People, with charities taking part reporting during May to July this year.

Of the 75 charities reporting, 63 were taking part for the first time. Four in five charities that took part said they did so to better understand their ESG progress and “what the next steps should be”. Two in three want to use the tool to benchmark themselves against others.

The tool “aims to be a starting point for more collaboration, peer-support and shared learning across the sector”, said ACEVO chief executive Jane Ide.

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