Tip: We’re talking about environmental, social and economic sustainability.
Focus on sustainability is at an all-time high. It’s not going away.
For charities, this means that delivering on a purpose will no longer be enough. To maintain relevance, stay competitive and meaningfully meet stakeholder expectations, action on sustainability is essential.
… and remember … taking no action, is an action. Inaction on sustainability speaks volumes to your stakeholders about your organisational values and beliefs.
Risk mitigation, talent acquisition, retention, funders, clients, suppliers, the environment … this is just a small list of the pressures and stakeholders pushing charities to act on their ESG responsibilities. paucity
Competition for funding and talent acquisition has never been fiercer than today. Charities don’t own the social impact space anymore. They’re sharing it with social enterprises, businesses for good and corporations.
Prioritising environmental and social sustainability issues will give your charity an opportunity to stand out amongst others in your lane.
Do you know if your stakeholders expect that you don’t source materials from businesses with questionable human rights activity? That diversity, equity and inclusion is a key consideration in your workplace? And that your programs and operations do not negatively impact the environment?
For charities to maintain their social licence to operate, remain relevant and meaningfully meet (and ideally exceed) expectations of stakeholders, action on ESG and sustainability is no longer a nice to have, it is a priority.
Directors have a duty to protect their organisations from foreseeable risks.
“Climate change risks would be regarded as foreseeable by courts, and relevant to a director’s duty of care and diligence to the extent that those risks intersect with the interests of the company.”
Unfortunately, according to a 2023 Australian Institute of Company Directors (AICD) study, 40% of not-for-profit Boards do not have the knowledge and experience to adequately address the climate governance issues facing their organisation.
So, what tangible steps can charities take now to address this?
Is climate change on your risk register? It should be.
Your clients could be disproportionately impacted by climate change.
According to the Intergovernmental Panel on Climate Change, “people who are socially, economically, culturally, politically, institutionally, or otherwise marginalized are especially vulnerable to climate change.”
Have you considered the impact of droughts, flooding, extreme heat and fires on your operations and your people? What considerations does your organisation have in place to support your clients?
Credibility is often a charity’s greatest draw card.
It is critical that your organisation is equipped to ensure it isn’t used to make business activities seem more environmentally or socially benign just by linking them to your charity’s good reputation and name. The risk is real. Greenwashing is becoming more and more commonplace.
ACCC has warned that they will (and have already) take legal action against organisations for misleading or deceptive conduct.
The impact on your brand, reputation and social licence to operate could be very damaging. And remember, in our era of often-enforced radical transparency, not much remains confidential.
In 2022, the London Science Museum, agreed to a confidential “gagging clause” as part of funding from energy company Shell, preventing the charity from criticising the company in its exhibition about climate change.
Do you have an ethical fundraising policy?
In 2023, Players from Australia’s Netball team revolted against a $15m partnership with Hancock Prospecting due to their alleged negative impact on First Nations communities.
Do you know what your team’s social and climate sentiment is? Do you know what their expectations are for your charity?
If sustainability isn’t embedded within your organisational strategy, and you don’t have an agreed understanding of what ethical fundraising means to your organisation, then you could be at risk.
We understand the unique pressures charities face every day, that is why we are here to make this as simple as possible.
To get moving, access your FREE Sustainability Cheat Sheet, packed full of free resources and 5 top tips on how to begin your Sustainability Journey.
Next, understanding what is material or most relevant to your organisation is the smart place to begin. One Brave Step is a social enterprise, offering affordable ESG Materiality Assessments.
We will work with you whilst training your team, so (ultimately) our services are not necessary. The clock is ticking and there is much to be done for our planet and our people. We believe the more empowered and enabled change agents there are, the better off we all will be.
Henrietta Ardlie is the Principal Sustainability Consultant at One Brave Step, a social enterprise which enables not-for-profits transition to a sustainable future.
Henrietta is an accredited Global Reporting Initiative Sustainability Professional and graduate of Sustainability Leadership Management at Cambridge University.
She is Chair of the Sustainability Leaders Network and Senior Associate with Leaders for IMPACT. She has held CEO and senior management positions in the not-for-profit sector for over two decades.