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EDI ranks high in importance for charities but progress slow, ESG survey shows
Melanie May | 29 January 2025 | News
Progress among charities on embedding EDI is still at the starting out or developing stage for more than half of charities, according to the findings of an ESG survey.
Eastside People’s first Environmental, Social and Governance (ESG) survey, which is supported by ACEVO, also found that most UK charities (67%) do not yet have an ESG strategy and just 3% have one that is holistic and fully integrated, although 42% are considering developing one.
The findings are based on Eastside People’s free ESG assessment tool, which can be used by all charities and nonprofit organisations to input their ESG data and receive individual and comparative feedback about their progress. The annual reporting tool was open for completion by charities and social enterprise across the UK in September and October 2024, with participating organisations spanning areas including health and social care, conservation, arts and heritage, education, sports and leisure, homelessness and supported housing.
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EDI shows biggest gap between importance & progress ratings
Close to all (99%) organisations said that embedding EDI across their organisation was either ‘very important’ (82%) or ‘important’ (17%), but 56% rated their progress as still at the ‘starting out’ or ‘developing’ stage.
The survey also found that nearly three-quarters (74%) of organisations are currently paying the Real Living Wage, with a ‘significant minority’ of 26% unable to do this.
Progress lagging on environmental issues
Progress on environmental issues was behind social and governance in all cases.
Only 10% of participating organisations rating themselves as ‘advancing’ or ‘advanced’ in monitoring, and taking steps to address the real or potential negative environmental impact of their activities and services.
16% rated themselves as ‘advancing’ or ‘advanced’ in monitoring and taking steps to address the real or potential negative environmental impact of their assets and resources.
Just under a third (32%) are doing any form of carbon footprint measurement compared to 52% in the private sector, and only 15% have a net zero plan.
Charities strongest on governance – but still work to be done
Just under half (48%) of large organisations (income >£1m) had undertaken an independent review of board effectiveness in the last three years, despite this being recommended practice under the Charity Governance Code.
37% of these larger organisations also had at least one trustee who had served more than the recommended maximum tenure of nine years: a bigger issue in small organisations.
Organisations also report struggling to effectively measure and evidence their impact on their beneficiaries and the wider community. 75% said it was ‘very important’ for them to gather evidence on the difference they make but only 17% rated their progress in this area as advanced.
96% of respondents agreed that having a theory of change for how they make an impact, how they achieve it and why they’re confident this is the best approach is very important or important, only 22% have a published current theory of change or similar.
Jane Ide, ACEVO Chief Executive, said:
“Developing understanding and taking action on ESG is an important part of chief executives’ and senior leaders’ roles both for strategic planning and day-to-day operations, to optimise governance, enhance contribution to the goals of society and minimise environmental impact for the causes and communities their organisations serve.
“We welcome the availability of a free tool that can be used by all charitable organisations and their leaders to understand, assess and optimise their ESG goals and are proud to work with Eastside People to raise awareness of the tool and its benefits so as to support leaders to make the biggest possible difference.
“Feedback from our members is that ESG is becoming an increasingly important part of their day-to-day operations, to optimise their governance, enhance their contribution to the goals of society and minimise their environmental impact.”
Richard Litchfield, CEO of Eastside People commented:
“We developed the ESG Survey tool and made it completely free of charge to use because we feel very strongly that charities and social enterprises should be able to review and reflect on their environmental footprint, social impact and governance practices, regardless of their size or budget in a social sector context.”
“Our first results have provided a benchmark for the sector but show clearly that there is much more to do. Our intention is for the ESG Survey to provide annual sector-wide analysis for more and more organisations, delivering more knowledge and insight year on year.”
The next round of the Eastside People ESG survey will open for completion between Tuesday 27 May and Friday 25 July 2025.
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.