Articles

Environmental, Social and Governance (ESG) considerations are no longer optional for Tier 3 charities.

As regulatory expectations grow and funders become more discerning, ESG is fast becoming a strategic necessity. But what does ESG mean in the context of a charity, and why does it matter?

At its core, ESG reporting is about demonstrating the broader value a charity brings to the world. For Tier 3 charities – often delivering highly impactful work with complex governance and financial structures – ESG represents both a compliance challenge and a strategic opportunity.

Environmental responsibilities go beyond reducing carbon emissions. They include managing supply chains, considering energy usage, and aligning operations with long-term sustainability goals.
Social elements focus on how charities engage with beneficiaries, staff, and volunteers – and how inclusive, equitable and transparent these relationships are.
Governance deals with how decisions are made, risks managed, and outcomes reported – areas where public trust is paramount.

The upcoming changes in SORP 2026 signal a clear direction of travel. ESG thinking will increasingly be embedded into both narrative reporting and financial disclosures. For trustees and senior leaders, this means asking: how well are we reflecting ESG principles in our current operations and reporting?

Charities that act early will gain a reputational advantage. They will be better positioned to secure funding, attract talent, and build stronger relationships with stakeholders. More importantly, they will be clearer about the impact they are making – and how they can do better.

How Can Aedon.Accounting Help?

At Aedon.Accounting, we’re helping Tier 3 charities prepare for this shift with confidence. Whether you’re just starting the ESG conversation or ready to integrate ESG into your reporting framework, we’re here to support you.

Follow Aedon.Accounting for the definitive information on the SORP 2026. Read our blogs, where we will be posting a series of information on ESG, and visit Aedon.Charities for a tailored approach to charity accounting.