Sustainability in Practice: monitoring and reporting by Kate Hand

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A CFDG Good Practice Publication

THE COVER.indd 1

30/03/2009 16:30:15

Foreword

Everyday acts of charity are the threads which help bind us together. But the simple truth is that we can’t help society in the long-term if we’re damaging the environment today. So we need to change the way we do things. The government has two goals of creating a low carbon economy and maintaining a healthy environment. We all have a part to play in achieving this – governments and green groups cannot do it alone. We also need businesses, communities and charities to do their bit. Charities are already doing a great deal – focusing more and more on the adverse impacts of environmental degradation, climate change and unsustainable resource use. Just as charities were at the forefront of the development of social welfare in the UK, so now they can be the champions of this new cause. We must all put environmental concerns at the centre of what we do. This guide is a great, practical aid in doing exactly that. It shows how charities can take responsibility for the impact of their operations, take steps to reduce that impact and then report their progress in a transparent way. And in a testing economic climate, what organisation wouldn’t want to cut costs by using resources and energy more efficiently? I am pleased to welcome this timely guide. The Charity Finance Directors' Group has been at the forefront of helping and supporting charities for many years and I am delighted that you’re now leading the way in improving sustainability.

Rt Hon Hilary Benn MP

The Charity Finance Directors' Group The Charity Finance Directors' Group is an umbrella charity that promotes improved standards and public understanding of management in charities. We specialise in helping charities to manage their accounting, taxation, audit and other finance related functions. Today we have a membership of 1,600 charities who manage around £14.7 billion of charity income. Our vision is a transparent and efficiently managed charity sector that engenders public trust and confidence. In order to achieve this aim, CFDG delivers services to its charity members and the sector at large which enable those with financial responsibility in the charity sector to develop and adopt best practice. CFDG provides information, support and training to its members, as well as being active in the policy arena. We work with other organisations, regulators and charities to contribute our charity expertise to the regulatory process, and to develop best practice in charity management. In addition, CFDG is represented on many committees and working parties established by professional bodies and government departments, including the APB Public Sector and Not-for-Profit Committee and the SORP Review Committee.

Best practice, accountability and sustainability Over the last two years CFDG has placed a major focus on accountability and transparency in charity management. Charities exist for the public benefit, and they rely heavily on public trust for their credibility and financial support. That trust must be confirmed and strengthened by charities making themselves accountable to their stakeholders. The central means by which charities can demonstrate and progress their accountability – other than directly through their work – is through statutory and non-statutory reporting. In order to provide the best service to our members, CFDG aims to stay ahead of the curve. Environmental sustainability has remained consistently high on the agenda over the last few years and organisations are increasingly expected to show how they are taking responsibility for reducing their impacts. We believe that sustainability must also encompass an understanding of social impacts. Organisations should take responsibility for their impact on the people with whom they are involved, and recognise that engaging with stakeholders will help build organisational strength and efficacy. Alongside acting to reduce adverse impacts on environmental and social sustainability, it is important to monitor and report on that work. We have developed Sustainability in Practice: monitoring and reporting to help charities keep abreast of best practice in environmental and social sustainability, and so to increase their accountability and efficiency in the service of their beneficiaries.

Acknowledgements We are very grateful to all those who have worked so hard to bring this report to completion. We would like to thank the report’s working group for contributing their considerable knowledge and experience, Kate Hand, the report’s author, and of course our valued sponsors, PricewaterhouseCoopers.

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Contents Summary

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Introduction Why tackle sustainability? What is sustainability?

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Reviewing your Sustainability What are the impacts on sustainability? Identifying your charity’s impacts Preparing to act

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Acting on Sustainability Preparing your sustainability management plan Key actions Case study: CFDG and sustainability

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Reporting on Sustainability Introduction Preparation When and where to report Assurance Existing reporting systems Examples of sustainability reports

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Conclusion Conclusion Acknowledgements

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Appendices A. Case Studies B. Sustainability Actions C. Carrying out a Sustainability Audit D. Management Approaches E. Key Performance Indicators F. Useful Links G. Bibliography

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Summary Sustainability in Practice shows charities how and why they should address their environmental and social sustainability, through reducing their adverse impacts and developing transparent sustainability reporting. The guidance has been written for charity finance professionals, who will have a key role to play in bringing sustainability into charities thanks to their senior position and their role in performance monitoring, reporting and efficiency. Embedding sustainability as a strategic concern in charities will, however, require the active engagement of a charity’s entire senior management team, the trustee board and in time the whole organisation. The Introduction reviews the reasons for charities to start looking at this issue, which has until now been the preserve of keen, green individuals and ‘green’ charities. We believe these reasons are compelling and that the early and strategic embedding of sustainability within charities will enhance their ability to deliver their mission. The first chapter, Reviewing your Sustainability, gives some background on what we mean by sustainability, followed by an explanation of charities’ main impacts. Of course, many charities work to strengthen and support the sustainability of the natural world and its communities, but this should only be an added impetus for us all to have regard to our negative impacts. Having introduced the major impact areas, we give a quick guide to assessing your impacts (larger charities can use the guidance for a more in-depth sustainability audit in Appendix C), and finally we look at the preparation necessary for introducing a coherent management approach. The next chapter, Acting on Sustainability, discusses the importance of a carefully considered management approach and reviews those currently available. A successful management approach allows a charity to reduce its negative impacts and enhance its positive performance in a steady and coherent fashion, whilst laying the foundation for transparent measuring and reporting. For many charities this may simply be a plan for assessing different impact areas, with clear management and targets set over a reasonable period of time. Larger charities, or those with more significant impacts, may want to implement an accredited Environmental Management System, which will guide them through the gradual assessment and reduction of their impacts. Alongside environmental considerations, we have given some guidance on how charities can integrate good social sustainability practices. The third and final chapter, Reporting on Sustainability, shows how reporting can demonstrate real commitment and allow charities to reap the benefits of greater accountability and a reputation for responsible action. Here, as elsewhere, we have given the most up-to-date guidance and examples of current best practice. We look at the benefits of such reporting and the practical questions surrounding it, including data collection, presentation and where to publish the information.

This guidance recognises that there can be no one-size-fits-all approach for such a diverse sector. We have therefore pointed the way rather than dictating a single approach, and signposted existing help in the form of guidance, standards, reports and examples of best practice. Our case studies endeavour to show how much is already being done, and how positive the impact of sustainability work has been on each organisation that has taken it up. We are particularly keen to show how such a range of charities and other organisations have taken up sustainability in their organisations and made it relevant and important to their work.

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Introduction

Introduction 1. Why tackle sustainability? Sustainability has rapidly become a key issue, and stakeholders of all kinds are increasingly expecting to see organisations taking responsibility for their impacts. However, far from being onerous or distracting, CFDG believes that the strategic integration of sustainability can substantially benefit charities. Tackling sustainability will improve your accountability and efficiency, and will support core charitable work, income and reputation. And since these different areas overlap the benefits of sustainability action can multiply. In short, tackling sustainability will support your overall charitable mission, making you fitter and better able to serve your beneficiaries.

"Our core purpose is to look after special places for ever for everyone so the concept of sustainability runs through everything we do. Whether we are looking at potential acquisitions, projects, new activities or process changes we continually challenge ourselves, through our triple bottom line process, to ensure that we end up with the most sustainable result - from a financial, environmental and people perspective." Andrew Copestake, Director of Finance and IT, The National Trust

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Accountability

Charities have a broad range of stakeholders on whom they rely for their social mandate and financial support. Beneficiaries, supporters, staff, volunteers and funders are all becoming increasingly concerned with sustainability, and charities must make themselves accountable to their stakeholders by reporting on the issues that concern them. Accountability is also important for overall public trust and confidence in charities. Failing to be accountable on sustainability should now also be seen as a reputational risk, partly because charities have historically had a key role in bringing social and environmental issues to public attention, and in leading on those issues. 2.

Efficiency and good management

Environmental and social sustainability are now key areas of good management. Improving environmental performance is one of the most cost-effective ways of reducing expenditure: reducing usage will bring savings on energy bills, water bills and landfill tax; you can improve your environmental efficiency by replacing equipment and appliances with the most energy efficient models, and through measures such as better insulation. The price of such improvements is steadily reducing, and many have a relatively low pay-back period thanks to the efficiency gains they bring. Even the more capital-intensive improvements can be cost-effective when looked at in the long term and/ or through whole-life costing. On the social side,

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you can save on recruitment and other staff costs through promoting such commitments, since they are increasingly important to staff. Good sustainability management will also help you to stay on top of legal requirements. Again, sustainability should be linked to risk management – a well-managed charity is more economically stable, attracts more funding and more talented staff. The Charity Commission believes there is now an expectation that all sections of society will reduce their adverse environmental impacts. They have said: ‘The Charity Commission supports and encourages all charities considering the development of environmentally sustainable practices wherever possible as a way of maximising their effectiveness.’1 3.

Supporting your charitable mission

Reputation: open and transparent adherence to your values – being seen as value-driven – is hugely important to maintaining your charity’s reputation. This supports public trust and confidence, which is in turn critical to your charity’s ability to carry out its work in the most effective manner. Income: donors and funders are starting to look for evidence of commitment to sustainability, and neglecting this could therefore endanger income streams. The Government is now a funder or partner

Going Green: Charities and Environmental Responsibility, The Charity Commission

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Introduction

for many charities and has signed up to tough sustainability standards that it will expect partners to share. Beneficiaries’ needs: climate change affects, and will continue to affect every area of life in every part of the world, from changing temperatures, severe weather and disease patterns to building regulations, legal responsibilities and food supplies. All charities should consider the needs of their beneficiaries in the light of these changes. Such wide-ranging effects already disproportionately affect the poorest and most vulnerable in society, and the continuing evolution of social problems also needs to be assessed in the light of sustainability. Moreover, the Charity Commission’s report Going Green profiles a number of charities who make a direct link between ‘an improved natural environment and improvements in social issues’ from reduced crime rates to a community’s ability to develop and sustain itself.2

All told, there is a substantial business case for action on sustainability. And it is a case that has been reiterated across numerous sectors, including in a report by the UK Green Building Council: ‘the benefits of measurement and reporting are quantifiable and directly link to business or organisational success. These are identified as: • Improved corporate image • Better strategic overview of operations • Improved operational efficiency • Ability to respond quickly to stakeholder enquiries • Motivating staff • Preparation for meeting new government standards.’3

CFDG believes that the senior position and particular skills of finance directors puts them in an excellent position to make the case for acting on sustainability. In particular, we believe that charity finance directors can and should develop excellent sustainability reporting that will support dynamic, accountable and forward-thinking charities. Reporting is particularly important, since: • Good reporting makes you accountable for performance against your targets, and gives that performance weight and credibility; • Accountability leads to a better reputation, which can in turn generate support and funds; • Reporting within the cycle of Review Æ Act Æ Report (see diagram below) allows organisations to drive up performance internally, particularly through the motivation of staff, and in the sector through the facilitation of benchmarking; • Reporting can be used to engage stakeholders, particularly if their opinions are actively sought in consultation on the content and nature of the report. It is perhaps ironic that although the third sector played a key role in bringing sustainability issues into the mainstream, it is corporate organisations who have reaped the benefit of improved reputation and accountability through acting, and particularly through reporting on sustainability. It is now time to reset the balance.

6. Report on your sustainability to your stakeholders

3. Report

1. Review

5. Implement your management approach with monitoring processes and initial targets for improvement

1. Consider how tackling sustainability can support your charity

2. Make an initial assessment of your charity’s impacts

2. Act

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Going Green: Charities and Environmental responsibility, The Charity Commission 3 Organisational measurement and reporting, UK Green Building Council, p.21

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4. Decide on a management approach that suits your charity

3. Start to engage the rest of the charity with sustainability, and consider its relationship to existing plans and strategy

Introduction

2. What is sustainability? Definition: Living in such a way that we can “meet the needs of the present without compromising the ability of future generations to meet their own needs.”4

The interdependence of human society and the natural environment lies at the heart of our problems as well as the solutions, and we cannot effectively tackle environmental impacts without looking at the social causes and implications of human behaviour. Of course, sustainability is an economic as well as an environmental and a social issue, but economic sustainability is outside the scope of this guidance.

Oxfam estimate that 250 million people are affected by climate change related disasters every year, and that that number could rise to 375 million by 2015.5

Examples of environmental and social overlap exist within all organisations: ¾ Better social practices for staff can lead to a more motivated and committed team, which can in turn contribute to environmental goals in the office, like reducing paper use; ¾ Environmental improvement work using volunteers can build social responsibility and aspiration amongst volunteers and local communities.

The effects of poor labour standards and remuneration for supply chain workers in the developing world can lead to bad housing conditions, which in turn can lead to pollution through lack of sanitation and sewage control and even degraded biodiversity due to illegal logging undertaken to supplement meagre fuel resources.

Some have looked at sustainability in terms of how we deal with our various ‘capitals’. The ‘five capitals’ theory states that, in effect, we are living off the planet’s resources ‘capital’ instead of living 6 off the ‘interest’. To link this back to the work of charities, development which is unsustainable in the long term is that which, a) widens inequality in terms of access to services, resources and a clean, safe environment, and b) reduces people’s ability to participate in the economy or influence the decisions that affect their lives. It is often these ‘market failures’ that charities and voluntary organisations are set up to help address. If charities ensure that their organisations and projects are socially and environmentally (as well as economically) sustainable, then they will be addressing the causes of unsustainable development at the same time as their core missions are aimed at addressing its effects.

Global deforestation not only increases carbon emissions and reduces the earth's ability to remove carbon from the atmosphere through its forests, but can also have damaging social consequences. In Indonesia, deforestation for palm oil production is resulting in widespread human rights abuses. Palm oil companies have been found to use violent tactics to force indigenous people off their land, who lose the resources of the forest and often get locked into debt and poorly paid employment. In addition, pollution from pesticides, fertilisers and the pressing process is leaving some villages without clean water.7

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Our Common Future, World Commission on Environment and Development The Right to Survive, Oxfam: www.oxfam.org.uk/resources/papers/downloads/right_to_survive_summary.pdf “The Five Capitals model”, Forum for the Future: www.forumforthefuture.org/our-approach/tools-and-methodologies/5capitals 7 Losing Ground, Friends of the Earth, Sawit Watch and LifeMosaic 5 6

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Introduction

Environmental sustainability The major threat to environmental sustainability – and so much else – is climate change. The UN’s Intergovernmental Panel on Climate Change (IPCC) confirmed in their Fourth Assessment Report that most of the observed rise in temperature is due to human emissions of greenhouse gases, and they paint a potentially devastating picture of the consequences for communities and habitats around the world. The most active damage to the climate is done by greenhouse gases (GHGs), the most 8 prevalent of which is carbon dioxide. The key impacts of climate change will be rising sea levels, flooding, food shortages, disease, severe water shortages and loss of tropical forests.9 Many scientists also predict an increase in severe weather conditions. Most action on environmental sustainability aims to mitigate and adapt to the threats of climate change. But there are additional areas of environmental action, such as protecting wildlife and water quality in rivers, which should not

be overlooked simply because the benefits are less clearly linked to climate change mitigation. Each charity will have some direct impacts – those that are the immediate result of the actions or operations of an organisation, which include emissions, wastes and discharges. Each charity will also have some indirect impacts – those that occur upstream or downstream of an organisation’s activities, which include the extraction of raw materials used in a process or suppliers/ distributors’ operations. The main areas of environmental sustainability that concern charities are: • Energy • Waste • Transport • Water • Procurement • Biodiversity

Social sustainability Sustainability is not just about the natural environment but about the communities within that environment. We must develop and maintain communities who live and work sustainably in terms of their impact on natural resources, and who are themselves sustainable. For charities, social sustainability is about operating in a way that respects and promotes good working practices and good relationships both internally and with external partners. This in turn should help to foster organisational values, drive performance and protect the charity’s long-term future. Supporting communities and their vulnerable individuals is a central area of charitable work, but outside the

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scope of this guidance. We will focus on the other major stakeholders in charities, such as partners, suppliers and employees. The main elements of social sustainability for charities are: • Overall stakeholder consultation And a focus on three key groups: • Supporters • Employees • Funders

The most dangerous GHGs are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. These are the GHGs covered by the Kyoto Protocol. “About climate change: Greenhouse gases”, Defra: www.defra.gov.uk/environment/climatechange/about/g-gases.htm 9 “About climate change: Global effects”, Defra: www.defra.gov.uk/environment/climatechange/about/globaleffect.htm

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Introduction

Case study: The National Communities Resource Centre and integrated sustainability “Trafford Hall is the home of the National Communities Resource Centre, the UK’s only charity running action-focused residential training for tenants, residents, young people, families and community volunteers nationwide. “Care for the environment in which we all live and work is key to our ethos. As environmental sustainability and community regeneration are intimately linked, it is the lowest income communities who are hardest hit by high energy prices and poor local environments. Residents in the areas we target are keenly interested in improving their environments for the benefit of families and young people. Their children’s prospects and family survival depend on their homes and neighbourhoods working better with more support from the rest of society. “Trafford Hall has pioneered environmentally friendly practices since its inception in 1995. We are fully committed to ensuring all our facilities are carbon neutral by 2012 and commenced work towards this goal in 2005 with the opening of our Carbon Neutral training and conference facility, the Stable Building. The Stable, situated next to the original Georgian Manor house, uses a combination of solar technology and bio-fuels which provide heating and hot water for the building. “It is important to us that people feel that they can make positive change within their communities once they have attended training at Trafford Hall. Our successful Training First model offers seed funding grants which enable community groups to have a practical and positive impact on their local community. After attending training at Trafford Hall, the Advance Tenant Empowerment Project received funding which allowed them to produce an environmental training pack and promote ways to combat climate change around the home. “Working with tenants across the UK the group were aware of the lack of practical information on environmental practices for tenants who experience learning difficulties. Using the grant from Trafford Hall they produced environmental information brochures highlighting the small changes that can be made, particularly around the home, to help combat climate change. The group was able to share their learning and promote their campaign with service users and other organisations. They also attended World Environment Day and Learning Disability Today. The response from the production of the brochures has motivated the group to do more to raise environmental awareness amongst those with learning disabilities and to highlight the need for all citizens to contribute. “The group is now using a second grant from Trafford Hall to produce an Environmental Training Pack as part of three Tenant Information Packs that relate to aspects of citizenship covering Community Involvement, Safety in the Community and the Environment. They are working with tenants, central government and other voluntary organisations. This work has enabled the group to achieve positive outcomes through the engagement of tenants and the development of responsible landlords.”

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Reviewing your Sustainability

Reviewing your Sustainability 1. What are the impacts on sustainability? Environmental sustainability Charities should aim to reduce their impacts to that which can naturally be sustained by the environment. Since C02 is the most prevalent greenhouse gas, environmental impact is often measured in C02 equivalent emissions, and reducing one’s impact to sustainable levels is referred to as being ‘carbon’ neutral. The suggestion of neutrality is, however, misleading, since it is only very rarely possible to completely remove the C02 equivalent emissions of any activity, and offsetting those emissions with reductions elsewhere fails to acknowledge this. Charities should look to reduce their impacts as much as is possible, and only then consider offsetting the remainder (see A Consumer’s Guide to Retail Carbon Offsets, Appendix G).

Energy Energy use is likely to be the biggest environmental impact for most charities. The impact of energy use comes from burning non-renewable fossil fuels to generate electricity, and using gas for heating and cooking. Fossil fuels release C02 into the atmosphere when they are burnt, and are one of the single largest contributors to climate change. By contrast, the impacts of ‘green’ energy produced from renewable sources are mainly limited to the infrastructure needed to support them. In practice, much of the impact of energy use comes from inefficient practices and equipment. More information: ‘Bring your green to work’, www.energystar.gov

Waste All organisations and most activities produce waste. Its impacts arise from the emissions created in transporting it to a disposal site, its presence at the disposal site and the by-products into which it breaks down. Some waste products take an extremely long time to decompose and so have impacts on the disposal site, whether that is a landfill site (the size and number of which are steadily growing across the UK) or waste that is simply disposed of into the natural environment, where it can harm plants and wildlife. When breaking down, waste can release dangerous by-products such as methane, a potent greenhouse gas. The impacts of disposal far outweigh the impacts of reusing waste, i.e. of seeing it as a resource. More information: www.envirowise.gov.uk

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Transport The environmental impact of transport comes mainly from vehicle manufacture and fuel use. Planes, cars and buses are generally powered by petrol or diesel, which is combusted in the engine and releases greenhouse gases directly into the atmosphere. Modes of transport that are wholly or partially powered by electricity, such as trains, trams and some cars (the electric or hybrid models that use electricity alongside petrol or diesel) reduce their impact by using less fuel (although the electricity itself will probably have been produced by burning fossil fuels). Biofuels can also now be used as a transport fuel (and to produce electricity and heat), but although they may seem like a silver bullet their growth, processing and transport can mitigate or erase their carbon benefits, and can have significant negative impacts on communities in the places where they are grown. In general, only biofuels produced locally as by-products of other processes, such as chip shop oil, really contribute to sustainable transport. Cycling and walking, which use only our own energy as fuel, are the most sustainable modes of transport. More information: www.dft.gov.uk/pgr/sustainable

Water Water is one of our most precious resources, critical for all forms of life. However, water is becoming increasingly scarce, and this trend will continue as the effects of climate change take hold. Each person in the UK uses about 150 litres of tap water a day and Waterwise estimate that if you include the amount of water embedded within the products we use then that figure shoots up around 3400 litres per 10 person per day. Organisations directly use water

“Hidden waters”, Waterwise: www.waterwise.org.uk/reducing_water_wastage_in_the_uk/the_facts/embedded_water.html

Reviewing your Sustainability

for sanitation, washing and cooking, they waste water through leaking pipes and inefficient equipment and appliances, and they indirectly use the water embedded in the products they buy (which is also potentially wasted and/ or polluted in production processes).

since procurement is perhaps the area where environmental and social impacts most obviously overlap, buying well gives charities the chance to ‘double’ their good practices. More information: ‘Greener shopping’, www.direct.gov.uk

More information: www.waterwise.org.uk

Procurement There are also environmental and social impacts associated with the products and services we buy, such as pollution from manufacturing processes and poor labour standards. These procurement impacts may seem difficult to control but charities must take responsibility as consumers. Opting for more sustainable procurement is not now a question of decreasing choice, quality or price-competitiveness – far from it. Sustainable procurement involves looking beyond buying habits for better options, with equal quality and competitive prices. Charities have always needed cost-effective procurement, and this is a strategy compatible with that aim. Moreover,

Biodiversity Biodiversity is an area where office-based organisations often assume they have little to offer or be concerned about. But as ‘the intricate network of ecosystems, habitats and species comprising biodiversity provides the support systems that sustain human existence’, biodiversity is always a key concern.11 Charities have an impact on biodiversity through their procurement and through their projects, such as those which involve horticulture or construction. More information: ‘Looking after nature’, www.direct.gov.uk

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A Guide to Producing IDB Biodiversity Action Plans, Defra, p. 3

Case study: Herefordshire Voluntary Action alter their travel modes “Herefordshire Voluntary Action (HVA) is a charity that supports other local charities and community organisations working in Herefordshire. At HVA we feel it’s important that we ‘do our bit’ for the environment. We see it as a win-win situation for voluntary and community sector groups, because taking action against climate change should not only save energy, but money as well. In particular, since we are a local charity that operates in a city with heavy traffic congestion, environmental and local community health and sustainability go hand-in-hand. Exploring alternative modes of travel has allowed us to start reducing our carbon emissions and reduce congestion and the negative impact it can have. “Action at HVA has very much been individually led. It started with our coordinator pledging to take the train one day a week, which gradually changed into only taking the car when it was needed for meetings outside the office. The CEO uses his own bike for journeys into the town, and the Voluntary Sector Assembly (VSA) Coordinator has bought a second-hand bike from a local community enterprise to use for meetings within a three-mile radius of the office. In a congested city this is of course also quicker than driving, and so a more efficient use of our time and resources. This kind of action has been supported by HVA’s flexible working policy, which allows staff to fit their working hours around public transport times. HVA also understand that train cancellations or delays sometimes mean staff are late or have to work from home. Other, simple awareness-raising factors have helped more HVA staff to travel more greenly, such as familiarity with local bus timetables, a necessity in such a rural county. “Building on individual action, HVA has recently undertaken a staff travel survey on how they get to work. Two actions are likely to follow: the purchase of a bike for staff use for short work-related journeys; and the allocation of an extra car parking space for staff who car-share. We are also keen to measure our improvements: HVA have saved a total of 1,438kg of carbon on journeys to work in the past six months alone. We have supported these improvements with an environmental policy, which commits employees, volunteers and visitors to ‘the protection and enhancement of human health, natural resources and the environment.’ The policy details the minimum level of environmental awareness expected from everyone, including travelling, ‘by public transport, on foot or by bicycle, or car-share when driving is the only option.’ We are committed to a regular review in conformity with the policy.

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Reviewing your Sustainability

“In terms of our work, we are focusing attention on our Community Transport Scheme and our annual VSA. The Community Wheels Project Officer already urges volunteer drivers and passengers to share journeys and we try to allocate volunteer drivers and passengers who live close to each other. In addition, we are trying to modify the Service Level Agreement (SLA) which directs this work, so that we have the scope to be more environmentally-friendly. We are asking Herefordshire County Council to alter our SLA so that the stipulated minimum mileage reflects passenger trips as well as car miles. “In terms of reporting, we have reported back on our transport miles as part of our SLA for Community Wheels in our last three annual reports.”

Social sustainability Charities should aim to operate in a way that recognises and respects all the people who are affected by their operations. This means promoting good working practices and good relationships both internally and with external partners.

Stakeholder engagement Charities exist through the needs and approval of an extremely wide group of stakeholders, and they must therefore involve their stakeholders in the evolution of their organisation, its work and even its reporting. Engagement with stakeholders should be appropriate to the charity, but it can take several major forms: • being clear about the aims and values of the charity; • creating a culture where stakeholders feel confident in expressing their views; • actively involving stakeholders in the management of the charity; • consulting with stakeholders on key issues.

Supporters Charities receive all kinds of support from individuals, organisations and local communities, including volunteering, campaigning and of course financial donations. It is important to understand the value of these supporters to your charity, not only in direct financial terms but in their promotion of your work, your good reputation and their influence on future supporters. Thinking through the sustainability of your relationships with your supporters thus involves pragmatic protection of your charity, as well as promotion of good relationships and your charity’s values.

Employees Valuing your employees is of direct importance to the sustainability of your charity. Employees are critical to the success of any organisation, and if they are to be committed to their work it is vital that they feel valued by their employer. All charities should strive to provide good management, good working conditions, flexible working arrangements,

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support in skills and training and decent remuneration. The vagaries of the current contracting environment can make this difficult, but they do not diminish its importance. On the plus side, good human resources management can provide tangible savings through lower absenteeism, lower staff turnover and thus lower recruitment costs. The third sector now attracts talented people across the board, and with excellent management charities can increase the number and calibre of applications.

Funders Even if you simply consider the financial investment that funders make in charities they are an important partner, and many funders also invest their time and expertise. In a wider sense, funders are stakeholders in the charitable sector. In addition, some funders have started to ask applicants questions about their environmental impacts, and it is clear that funders will play a major role in promoting and supporting the sustainability agenda in the sector.

More information: • Small Business Journey: www.smallbusinessjourney.com/Page3.asp • The Work Foundation: Greening Work: www.theworkfoundation.com/assets/docs/public ations/196_greening_work_final.pdf

Reviewing your Sustainability

2. Identifying your charity’s impacts Every charity will need to take an initial measurement of its current performance on sustainability. Your impacts are likely to be based around the areas we have already identified: energy, waste, transport, water, procurement and biodiversity; and stakeholder engagement with supporters, staff and funders. However, it is important that you assess the impact areas that are material for your charity. Almost all sustainability areas are interlinked, but the weighting that you give different areas depends on your work, size and location. If you have a significant impact in a particular area this should be included in your assessment. If, on the other hand, it is difficult for you to measure an impact and it is one you know to be very low, then simply take an estimate in this initial review. Keep an open mind about impacts – they are likely to change over time, even disregarding any action you take to mitigate them. For example, high fuel prices might lead to more home-working, a change in your premises might bring an increase or reduction in your electricity and water bills, or a new project area might lead to the production of new resources. For your environmental impacts you can look at bills (electricity, gas and water) and payment records (waste, transport and procurement). You might also want to take a walk around your office to look at the energy- and water-efficiency of your building, equipment and appliances when they are on and who is responsible for turning them off, whether there is a recycling system in place, and if so for what. Business Link provides a useful guide to such a walkround survey, along with lots of other information, on their website: www.businesslink.gov.uk (Environment

and Efficiency > Sustainability in Business > How to use environmental assessment techniques > Walk around survey of your business). For your social impacts you can look at how you identify, engage and consult with your various stakeholders. Start by looking at the number of stakeholders you have in different groups and whether you think they feel valued and supported by the charity (and how you can measure that). You should also have regard to the interaction of environmental and social impacts: how do your stakeholders feel about any environmental measures that have been taken, and might these measures have affected people’s modes of work or perceptions of the charity?

The time it takes to make this initial survey will of course depend on the size and work of your charity. The approach outlined above will give a general snapshot and is appropriate for small and mediumsized charities. Larger charities will want to take a more comprehensive survey of their performance, and they can follow the guidelines for carrying out a sustainability audit in Appendix C. This kind of snapshot review provides an initial assessment. We would distinguish between this kind of review and, a) gathering data on an annual basis for reporting purposes, and b) a baseline review carried out over a year or more. A baseline review gives a detailed picture of sustainability performance against which to measure change, and helps to show where and how to concentrate action.

Case study: Diana, Princess of Wales Memorial Fund on waste management “The Diana, Princess of Wales Memorial Fund (“The Fund”) is a progressive grant making organisation. It seeks to achieve its objectives in a number of innovative ways, by employing various strategies beyond grant making. Part of the Fund’s ethos is being a good corporate citizen beyond its charitable work and a key element of this is good waste management. For the Fund this generally means minimising waste, having good recycling facilities and disposing of non-recyclable waste in the most responsible way possible. “The Fund values good recycling and waste minimisation because of the general benefits to the environment and society, such as increasing people’s awareness of their consumption and reducing greenhouse gas emissions. However, it also finds that good waste management has additional benefits for the organisation as a charity: Living our values and engaging with staff: The practical arrangements for the recycling of paper, cardboard, plastics and cans are a very visible reminder to staff that they work for an organisation committed

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to acting in socially responsible ways. This in turn is likely to make staff more positive about their employer, and thus happier and more motivated. And indeed, we have discovered that some staff at the Fund are keen ‘recyclers’. Improving reputation: the fund needs to manage its reputation, which is an important tool in ensuring it achieves its charitable objectives. The Fund not only wants to act in a socially responsible way but identifies that this is part of a package to deliver excellence, which sits well with good corporate governance and stewardship. It would not be logical for a charity that expends a great deal of effort in aiming for excellence in its corporate governance and charitable activities to then risk damaging its reputation by not being seen to take action in waste management. Reducing costs: raising the profile of recycling, other ‘green practices’ and reducing the amount of general waste has significantly reduced the cost of waste disposal. For example, our e-mail signature reminds people not to print the e-mail unless it is necessary to do so. This small initiative will make people think twice before printing out an e-mail, which in the long term will make a big difference to the amount of paper used. This has the very tangible benefit of saving money on both paper and printer cartridges and encourages an environment where saving money and the environment go hand in hand. “In terms of implementation, good waste management couldn’t be easier. At the Fund, providing the facility to recycle and raising awareness about recycling has embedded the practice as a matter of course. For many years, the Fund has had a system for recycling paper and card which the staff do not regard as requiring extra effort, and the recent introduction of recycling for plastics and cans has been just as easy. The logistics of recycling are simple to arrange, with many companies providing a collection service and many councils providing a free recycling collection service for charities. The relatively small costs involved can be offset by savings on the costs associated with general waste disposal. As part of an overall package of activities designed to help the environment, recycling can save organisations money, and when being asked to modify behaviour individuals can find saving the environment more of an incentive than saving money.”

3. Preparing to act ‘Implementing sustainability at an organisational level requires organisational alignment between strategy and policy, processes, structures, tools and most importantly, people. These will enable the organisation to define 12 where it is, where it may be headed and opportunities for improvement.’ UK Green Building Council

Engagement and governance Having identified what you are already doing on sustainability, your charity will need to build support amongst staff and trustees in order to really address and integrate sustainability. Staff need to feel empowered to act on their charity’s impacts, and for that to happen they need to feel that their actions are both relevant to their organisation and capable of making a difference. The work of engaging people in sustainability across the charity is unlikely to be taken forward by the finance director or her/ his team, but should more properly be the concern of the senior management team as a whole, led by the chief executive. However, given its importance, we have included a short section on it here.

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In the first place, you will need to get trustees and senior management on board, since sustainability needs to be strategically managed, and as such driven from the top. Ultimately, however, all staff need to be engaged with this agenda, since it will only work if it is seen as a collective responsibility throughout the organisation. In your sustainability review you are likely to find that some action is already being taken by keen members of staff, and this should be emphasised and built on to motivate staff. You may need to organise training for staff and trustees to ensure that they have the right skills to carry out their role in the organisation’s sustainability work. A number of schemes also recommend appointing a few staff members as sustainability ‘champions’.

Organisational measurement and reporting, UK Green Building Council, p.4

Reviewing your Sustainability

Since improving sustainability depends quite largely on staff behaviour it is useful to have keen staff members encouraging others and publicising achievements. The support of senior management and trustees should not just involve general endorsement but should be a part of the governance role, so that responsibility for sustainability both comes down from and goes back up to a senior level. Sustainability risks – reputational, legal etc. – should be integrated into the risk register and risk management processes. This will act as a monitoring procedure itself, since risk registers should be reviewed biannually by trustees. Collective responsibility means that more junior staff who are directly responsible for sustainability areas, i.e. office managers, project directors etc., should

have relevant objectives and targets written into their roles and performance assessments. Your charity will need a management plan that details actions to be taken, the staff lead and the timescale. Progress against this plan should be assessed at least every six months, and should be highlighted to staff (and others if appropriate, i.e. beneficiaries, funders). Assessing whether the contents and ambitions of the plan are still relevant and challenging should also be undertaken on a sixmonthly basis. More information: • Sustainability at work: www.sustainabilityatwork.org.uk/csp

Aligning sustainability within your charity Charitable objects We have suggested that sustainability should be strategic from a management and reputational point of view, but it also fits within a range of formal charitable purpose(s) as defined by the Charity Commission: • ‘The prevention or relief of poverty’: environmental degradation and social disruption, from heat waves to poor workplace conditions, always strike the most vulnerable first and hardest; • ‘The relief of those in need by reason of youth’: charities should look to protect and help beneficiaries now and into the future and promoting sustainability will be critical to ensuring a safe and healthy world for tomorrow’s children. However, you must also consider any negative impacts of your core mission. For example: • If your mission is in overseas development, could the environmental impact of essential travel affect that development work through its contribution to climate change? • What effect does working with offenders have on the social sustainability of staff? • What is the sustainability impact of large displays and collections kept by museums and galleries?

Strategy By integrating sustainability into strategic planning charities can embed sustainability into the DNA of their organisations. This means: a) including your material sustainability impacts and action being taken to address them in your strategic plan, and

b) addressing the overall implications of your strategic plan on sustainability, for example: i. if you plan to reach out to new groups of beneficiaries in the next three years, is that going to have a positive or negative environmental and/ or social impact? There may be an opportunity to maximise social impact whilst maintaining the same environmental impact, or vice versa; ii. if you plan to move to larger premises, have you considered the energy implications of moving to a new building, in terms of energy efficiency, heating costs and transport requirements? A revision of your strategic plan to address these issues may be possible, and could simply be a reemphasis of the ‘hidden’ sustainability issues within the strategy. On the other hand, if an extensive revision is needed it may be more efficient to make an early start in thinking about how sustainability could be better integrated into the next round of strategic planning. Getting the right policies in place will be part of your strategic integration of sustainability. Good policies that are agreed and formally implemented across the charity will help to integrate sustainability into daily operations and show your commitment to sustainability, internally and externally. You can write and agree policies at the beginning of this reviewing process, so that all your action and reporting flows smoothly from a single policy document. Alternatively you may wish to wait until you have developed an initial sustainability

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management plan so that you have more idea of what impacts you have and at what level of action you can start to act. Depending on the charity, you may choose to adopt an overarching sustainability policy or a number of policies on specific areas. Many organisations, particularly charities, already have policies on a number of, for example, human resources issues. It may therefore be sensible to re-assess these policies for their fit with your sustainability work, and to develop a separate environmental policy, as we have done at CFDG. A sustainability/ environmental policy should include: • An introduction to your charity and how sustainability fits with its mission • The scope of the policy • Commitments to: o Continuous improvement o Action in all relevant major environmental and social sustainability areas o Major targets (and where progress against them will be reported) o Monitoring progress and regularly reviewing performance (usually annually) o Education and training of staff where necessary o Recognition of the impact of the charity’s mission and work on sustainability o A commitment to abide by relevant legislation • Staff responsibility/ governance • How often the policy will be reviewed and by whom

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• Information about related policies

You may also wish to sign up to an external pledge to action, which can help to build motivation, engage stakeholders and promote your charity’s commitments to a wider audience. Take a look at the Third Sector Declaration on Climate Change: www.everyactioncounts.org.uk/declaration

Operational integration There will also be practical implications to consider: • Which staff member or team is responsible for taking sustainability forward? Do they have a coherent reporting structure, and does sustainability work fit in with their existing responsibilities and position (they need sufficient seniority and permanence)? Do they have the necessary time and training? • Are there any ‘sustainability side-effects’ in the day-to-day running of your projects, in terms of the length of the project, its location, the materials needed etc.?

More information: • General: Small Business Journey: www.smallbusinessjourney.com/Page16.asp • Policies: CFDG document library: www.cfdg.org.uk/crn/doc_search.asp • Policies: Envirowise: www.envirowise.gov.uk/Ref012

Acting on Sustainability

Acting on Sustainability 1. Preparing your sustainability management plan Management systems and guides Once you have conducted an initial review, started engaging with staff and senior management, and looked at the integration with existing strategy and processes, you can start preparing a sustainability management plan. There are a number of existing management systems and guides. These are laid out in the table below, and more detail on them can be found in Appendix D.

• a programme for continual improvement; • a programme for training and awareness; • written procedures to control activities with a significant impact; • periodic auditing of the system to ensure effective operation; • a regular formal review of the system by senior management.13

Whether you adopt a guide or choose to develop your own system, you should ensure that it is one that will suit your charity. You need to consider: • the size of organisation and scale of impacts at which it is aimed; • how well its structure would fit with the structure and processes of your charity; • any in-built timescales; • its approach and motivations, in light of the mission and values of your charity.

The formal Environmental Management Systems (EMSs) deal only with environmental sustainability, there are no equivalent ‘social management systems’. There are, however, two systems of social accounting – Social Accounting and Audit, and Social Return on Investment. These are covered in the next chapter, Reporting on Sustainability. There are few if any joint social and environment management schemes. Some charities will find it best to tackle their environmental and social impacts together, with a joint approach and action plan. Others will find it more effective to have separate plans, in which case you should remember to crossreference joint impacts and benefits.

An effective management system should involve: • An assessment of all of your charity’s impacts and work on environmental and social sustainability; • development of relevant policies;

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“What does an EMS involve” Adapted from Envirowise, www.envirowise.gov.uk/uk/Topics-and-Issues/EMS/What-doesan-EMS-involve.html

Management systems: small and medium-sized charities Green Dragon Environmental Standard www.greendragonems.com An accredited EMS aimed at smaller organisations.

Environmental? 9

The Acorn Scheme www.iema.net/ems/acorn_scheme An accredited EMS based on British Standard (BS) 8555.

9

Management systems: medium-sized and large charities ISO 14001 www.iso.org An accredited, internationally-used EMS: ‘a framework for a holistic, strategic approach to an organisation’s environmental policy, plans and actions.’14

Environmental? 9

Social?

Social?

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Eco-management and audit scheme (EMAS) www.iema.net/ems/emas A complete sustainability management process, inclusive of an EMS (ISO 14001), which is designed to improve organisations’ environmental performance through evaluation, reporting and continuous improvement.

9

Guides: small charities Changing the Way We Work www.everyactioncounts.org.uk/guides/greenofficev1.pdf This guide gives a brief outline of major areas to tackle and some actions organisations can take.

Environmental? 9

Social?

PQASSO www.ces-vol.org.uk PQASSO is the Practical Quality Assurance System for Small Organisations.

9

9

Guides: all sizes One Planet Living® www.oneplanetliving.org A global initiative based on ten principles of sustainability. The principles can be used as a sustainability framework for organisations, projects and individuals.

Environmental? 9

Social? 9

Legislation There are increasing amounts of environmental legislation and at the very minimum you must ensure that you are on top of any compliance issues. Charities with significant risks should consider developing a register of legislation. Legislation surrounding the people that charities work with is well-established but constantly evolving. On the environmental side, the Charity Commission have highlighted the duty under charity law for all trustees to ‘preserve and manage the charity’s property in a way which furthers their charitable purposes.’15 The

Commission also point to the new duty of company directors, which applies to incorporated charities, to have regard to ‘the impact of the company’s operations on the community and the environment.’16 Netregs is an excellent source of information on environmental legislation. You can check the list of legislation by business and by environmental topic: www.netregs.gov.uk.

Setting targets To demonstrate your commitment to sustainability you must have targets for the areas you wish to improve. We would recommend that these are ‘smart’ targets: Specific Measurable Agreed Realistic Time-bound 14

Organisational targets will drive forward the improvement you want to see and should sit alongside and be integrated with other top level organisational targets. You may find it useful to have one for environmental and one for social sustainability. For example: ‘we will reduce C02 by 15% by January 2010’, and ‘we will reduce levels of absence due to sickness by 10%’. These kinds of targets can be linked back to qualitative reasoning where appropriate. For example, reduced levels of

(previous page) “ISO 14000 essentials”: www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/iso_14000_essentials.htm 15 Going Green: Charities and Environmental Responsibility, The Charity Commission 16 Companies Act 2006, Part 10, Chapter 2, Section 172, 1) d), www.opsi.gov.uk/acts/acts2006/ukpga_20060046_en_1

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sickness means healthier, happier and more productive staff, which in turn means fewer related costs to the organisation and thus constitutes a tangible financial payback from investment in staff welfare. BT look at health, safety and wellness in their Sustainability Report 2008, and Sickness Absence Rate is one of their key performance indicators: www.btplc.com/Societyandenvironment/Ourapproac h/Sustainabilityreport/index.aspx Do note that in some areas and for some organisations year-on-year improvements simply are not possible. In this case it is pointless setting targets for their own sake and you should simply make clear what has already been done and why further improvement is not possible. Many organisations now use Key Performance Indicators (KPIs) as headline targets to track progress. Many of the management systems detailed in this chapter use KPIs, as do many of the reporting systems discussed in the chapter on

reporting. Further detail on relevant KPIs recommended by the Global Reporting Initiative, Defra, Envirowise and the Global Compact can be found in Appendix E. Unfortunately, there are as yet no sector standards for such targets or KPIs. It can certainly be helpful to benchmark your targets by looking at peers’ work, but with little activity in the charities sector at the moment it may be more useful to look at similarsized corporate organisations active in this area. There are also external benchmarks which may help, see ‘Content and gathering data’ in the next chapter. More information: • ‘Set targets and action plan’, www.sustainabilityatwork.org.uk/strategy/targets • The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Chapter 11: Setting GHG Targets, www.ghgprotocol.org

Case study: Bryncynon Strategy and their Environmental Management System “Bryncynon Strategy promotes community development in the Lower Cynon valley. Since its incorporation as a charitable company in 1996, the Strategy’s mission has predominantly focused on achieving more ‘traditional’ outcomes such as poverty alleviation, job creation, lifelong learning, children and youth work and community development. But in 2004 a social audit concluded, perhaps unexpectedly, that the environment was deemed a very high priority in the local area. Community members wanted to see projects that dealt with environmental matters while continuing to create jobs and provide learning opportunities. “What became clear to the organisation as it began more environmentally-focused projects was the lack of a coherent environmental focus within the organisation itself; it was not practising what it was preaching. In essence, The Strategy was intending to promote the message of sustainable development, recycling and responsible environmental stewardship to the wider community without putting its own house in order first. “The Green Dragon Environmental Standard provided a ready-made and recognisable way that the organisation could adopt an Environmental Management System (EMS), which at the time was funded. In subsequent years, however, we have continued to pay the cost of being part of the scheme, since we believe it represents great value for money. The Green Dragon Standard provides all the steps that organisations need to take, and we’ve found them easy and intuitive to follow. Broadly speaking, what happens is that targets from the environmental action plan are monitored by an environmental subgroup that convenes quarterly to track changes such as reductions in emissions or waste. Individual targets are ‘owned’ by particular staff members, who either volunteer to manage a target or whose roles closely mirror the actions required to achieve a particular target. Targets are reviewed and updated annually by the same group. “The EMS fits with our core charitable work in that it seeks to connect active responsibility for and to the environment with the same degree of responsibility that it has towards the local community. The link between environment and human welfare is inextricable. Bryncynon Strategy believes that its duty of care towards the community it serves should be reflected in a duty of care towards the environment; the EMS reflects this commitment. Beyond this, the EMS brings additional benefits, by: • Raising the organisation’s profile as an environmentally responsible organisation; • Saving money (lower heating, transport and stationery bills), thus alleviating pressure on organisational reserves;

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• •

Opening up new avenues for potential funding; Providing the baseline for community learning and awareness-raising that can link in with more fundamental community regeneration issues such as fuel poverty, job creation, lifelong learning, etc.

“Bryncynon Strategy is currently at level 3 (of 5) in the Green Dragon Standard, and it intends to undertake levels 4 and 5. Ultimately the organisation would like to move towards a zero carbon operation through the installation and use of renewable energy generation systems and through encouraging local food production. These will provide a basis for training and job creation projects into the future which should fit closely with Welsh Assembly Government targets for sustainable development. “The EMS will be publicly available through our new website when it goes live, and on it we intend to publish our year-on-year targets and their impact on emissions and waste production. At level 3, the Green Dragon Standard requires us to produce an environmental statement available for publication on their website. We look forward to the greater accountability and added impetus to meet our targets that public scrutiny will bring!”

2. Key actions We have identified key areas of environmental and social sustainability, outlined in the previous chapter, Reviewing your Sustainability, on which every charity should consider acting and reporting. These are however only key areas, and the precise range and severity of the impacts of UK charities will be as diverse as the sector itself. Charities should rigorously try to understand and address their impacts. A number of the areas for action examined below will belong in more than one category of impact. For example, saving water is a question of reducing waste as well as reducing water loss, and buying green energy reduces the impact of your energy as well as your procurement. Whilst it is important to be aware of (and highlight) the multiple advantages that come from much of this work, you should place each action in a single area (i.e. in ‘waste’ or ‘water’) to avoid confusion and then cross-reference where necessary. Large charities, i.e. over £1m, with a wide base of operations may want to start by considering their highest and/ or most material impact areas. Most charities should be acting, or planning to act

wherever they can, and only reporting on what is material. In this section we give three key actions for each impact area with which charities can get started. There are also case studies on many of the different action areas – some in this section, some spread around the report. A comprehensive list of actions can be found in appendix A. More information on acting on sustainability: • Business Link > Environment and Efficiency: www.businesslink.gov.uk • Direct.gov: www.direct.gov.uk/en/Environmentandgreenerlivin g/index.htm • Green Guide for Offices, London Sustainability Exchange: www.lsx.org.uk/docs/page/2773/Green%20Guide %20for%20Offices.pdf • Envirowise: www.envirowise.gov.uk • Sustainability at Work: www.sustainabilityatwork.org.uk

Actions on environmental sustainability Energy 1. 2. 3.

Reduce your energy use Install the most energy efficient equipment and appliances, including insulation Buy green electricity

Further action: consider installing microgeneration devices (e.g. photovoltaic panels, solar heating or wind turbines).

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Case study: Arcola Theatre do energy-saving “Arcola Theatre aims be the world’s first carbon neutral theatre and has integrated trailblazing sustainability projects as part of its core business. Arcola is committed to making environmentally sustainable art, and in 2007 we launched Arcola Energy, an in-house initiative that focuses and develops the theatre’s work on sustainability. Arcola Energy is as innovative and dynamic as the theatre itself, an off-shoot of the theatre whose roots have now spread into the wider arts world, into environmental innovation and the local community. “Arcola demonstrates that marrying artistic excellence with sustainable practice is achievable and advantageous, since it: reduces energy bills; supports funding applications; integrates Arcola into the local community; allows Arcola to reach a wider audience and stakeholder base; and provides an effective platform from which to publicise Arcola as a hub of creativity and sustainability. “Arcola’s ‘greening’ goes from the stage to the box office, for example: • The theatre installed a fuel cell in February 2008, making it the first theatre in the world to power its main house shows and bar/café on hydrogen. The Living Unknown Soldier was London’s most ecologically sustainable show, with the lighting at a peak power consumption of 4.5kW, a reduction of 60 per cent on comparable theatre lighting installations. Director, Sebastian Armesto says, ‘I did this for artistic reasons rather than social ones. I hoped that by limiting the production we might do things more simply, more efficiently. But ‘limit’ is the wrong word. What actually happened was that by ‘going green’ we opened up a plethora of possibilities…” • And they have transformed their lighting. The bar/cafe is illuminated by low-energy LEDs and the lighting for the entire front-of-house space now consumes less than 500 watts, a saving of 60 per cent and a great improvement in quality of light. “Currently, Arcola is establishing ways in which it can monitor and evaluate its energy use and wider sustainable practices – through metering, energy bills, and adapting a model developed by Arup, the SPEAR model, which assesses sustainability plans in relation to buildings-based organisations. Monitoring is an extremely valuable part of becoming a sustainable operation, since it drives improvement and promotes an organisation’s business and sustainability credentials to a wider audience. “As a recognised innovator in sustainability in the arts, Arcola has been able to establish excellent relationships across the board, with private sector companies who have provided the theatre with free green products, with other theatres and arts organisations, including the National Theatre and the Arts Council, and with Government bodies like the Department of Media, Culture and Sport and Mayor of London’s Office. Arcola’s reputation as a sustainable charity has created these partnerships and allowed them to grow and develop into mutually advantageous relationships. “Our last Trustees Annual Report, from the year end Annual Report and Accounts, gives as one of our six five-year aims, to ‘create the first energy centre for new technology in the arts’ and goes on to give further detail on Arcola Energy. In addition, the Arcola Energy project has a dedicated website which give substantial detail on the rationale and progress of their work.”

Waste 1. 2. 3.

Reduce your waste Reuse your waste Recycle your residual waste

Further action: Consider ways to compost your food waste with a compost pile or wormery For a case study on waste from the Diana, Princess of Wales Memorial Fund, see p. 13.

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Transport 1. 2. 3.

Reduce your travel Promote greener modes of transport Promote the use of tele- and video conferencing

Further action: reduce the amount of flying your staff do and/ or ‘green’ your car fleet.

Case study: RSPB work on their travel “The RSPB speaks out for birds and wildlife, so tackling problems that threaten our environment, such as climate change, is important to us. Obviously, we want to minimise RSPB’s carbon footprint for its own sake but as much of our work involves influencing others it is important for us to practice what we preach. “Carbon emissions reduction is now enshrined in the RSPB’s 5-year plan, with a target of achieving, in each year of the plan, a 3% reduction in CO2 from business travel and energy use. Achieving this would represent a good start towards an 80% CO2 pollution reduction by 2050, a policy goal that the RSPB has long advocated and was recently included in the new Climate Change Act. “For travel, our first priority was to reduce the need for journeys, so we introduced video conferencing in all of our larger offices. Where a physical presence was necessary we tried not to send two (or more) delegates when one would suffice. However, as for most charities, much of our work involves influencing people and often there is just no substitute for face-to-face contact. So we needed to ensure that all journeys were made in the least damaging fashion. For this, we introduced a hierarchy of preferred travel methods to help staff choose the most carbon-friendly ways of making essential journeys. Through this, we conveyed a strong presumption against air travel, significantly reducing short haul flights (usually by transferring to trains) and even prompted staff to re-appraise the need for long journeys. To help give impetus to this change all train fares were borne by a central cost centre for a limited period, removing train travel costs from departmental budgets – this significantly increased the use of trains. “Our latest move has been to introduce carbon budgeting for travel. The standard finance package has been adapted to capture sufficient journey details to calculate carbon emissions using standard Government data. This information is presented to managers in the same format as for financial reports and provides a helpful tool for monitoring progress towards our emission targets. “Being based in deepest Bedfordshire, travel to work is another key area and so we have long offered free bus services to work from local villages. This is supplemented by interest-free loans for season tickets and a bike-to-work scheme offering a tax efficient method to buy bikes. We even offer free breakfasts in return for actually using the bike - but only for one week a year. “We report on this sustainability work internally and to our council.”

For another case study on transport from Herefordshire Voluntary Action, see p. 11.

Procurement 1. 2. 3.

Develop and implement a sustainable procurement policy Address the environmental and social impact of the products you purchase Consider setting up a formal code of conduct for your suppliers, detailing the standards and procedures you expect

Further action: consider the ethical and environmental status of your banking and investments.

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Case study: Cancer Research UK and sustainable procurement “Cancer Research UK is the world’s leading charity dedicated to cancer research. We carry out scientific research to help prevent, diagnose and treat cancer. We have discovered new ways of beating cancer that together have saved hundreds of thousands of lives across the world. We have over 2000 employees based at our scientific institutes, head offices and throughout the UK to support our network of high street charity shops and other fundraising activities. “Action has been taken on a variety of environmental areas because environmental efficiency makes sense, and often has the added benefits of being less wasteful and thus more cost effective. At the moment many of our initiatives are cost neutral or ‘invest to save’, and in some areas we are already seeing the cost savings. However, we also think it’s simply the right thing to do. To add to that our supporters and employees are increasingly telling us that our environmental performance is an issue that matters to them. “It was recognised early on that significant gains could be made from integrating sustainability into our procurement activity. There was also a high level of management support in the procurement team which has been critical to the success of this initiative, which is now supported from the very top because sustainability is part of our overall corporate objectives. “The first step we took was to engage London Remade, who run the London Mayor’s Green Procurement Code and can provide free advice to participating organisations. Their approach is led by the ‘flexible framework’ as defined by the Government’s Sustainable Purchasing Taskforce. The main areas of focus are: • People: identify key people to take the policy forward and provide them with training; include green procurement requirements in job descriptions. • Policy, strategy and communication: establish a working group to develop an environmental and/or green procurement policy and communicate the objectives to staff. • The procurement process: develop standard specifications to apply to key procurement contracts. • Engaging suppliers: identify key suppliers and understand how they will fit in with your procurement contract. • Measurement and results: put in place the systems and processes to implement green procurement; measure achievements against targets using a record of the green purchases made. “We tackled high-value and high-profile areas of spend first and will be formalising this approach by undertaking a risk assessment of our whole supply chain in 2009. The next step was to provide procurement category managers with a basic level of training on sustainable procurement which is now being replaced by a formal one-day course. “Some examples of sustainable procurement activity have included a switch to recycled or FSC accredited paper, a filtration system to replace the use of bottled water at meetings, a preference for cycle couriers, ecofriendly cleaning materials, biodegradable food packaging, and even the selection of a more sustainable and environmentally efficient building for our new headquarters. Sustainability is now being incorporated into every procurement decision made as part of the building refurbishment and fit-out project. It is becoming standard practice to include sustainability elements in tender requirements, supplier questionnaires and specifications. With respect to our fundraising events, such as Race for Life, the factory manufacturing our tshirts has been visited to check on the standards and improve compliance with our ethical purchasing policy. “To motivate and engage suppliers at first hand, the Environmental Co-ordinator addressed key suppliers at our annual supplier event and set them the challenge of helping us to reduce our waste by 10% through taking back packaging such as pallets and through improved products and processes. “In October we were thrilled to achieve the bronze level of the Green procurement Code and were also nominated for a good practice award. Moving forwards, sustainability will be incorporated in a new version of the procurement policy (to be produced this year), and throughout the procurement process. We are also about to launch our first CR-UK wide sustainability policy and action plan which has been created by enthusiastic members of the management team from areas across the charity. We hope to achieve the Silver level on the Mayor’s Green procurement Code this year and to keep building on our successes. “In terms of measuring and reporting, we will look to include a statement on our sustainability responsibility and the work we are taking forward in the Annual Report and Accounts for 2008/09.”

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Water 1. 2. 3.

Reduce the amount of water you use Install water-saving equipment and appliances Collect rainwater for watering plants

Further action: Start buying non-toxic cleaning products and non-toxic paints, to reduce water pollution.

Case study: Artsadmin, environmental management and water “Artsadmin is a unique production organisation for contemporary artists working in theatre, dance, live art, visual arts and mixed media. We recognise that we have a responsibility to protect the environment and continuously work to reduce the environmental impact of what we do. “We started the process of identifying and tackling our environmental impacts by taking part in an Energy Pilot Audit in 2007, run jointly by the Arts Council of England and ECOFYS, an energy consultancy. As a result of that audit we developed an environmental policy to provide a framework for environmental action at Artsadmin. The policy can be found on our website: www.artsadmin.co.uk/aboutus. In 2008 we measured our energy usage, and we will use these figures as an accurate baseline for measuring future reductions. “However, we didn’t want to stand still on environmental action during 2008, so we drew up an Environmental Action Plan detailing what were currently doing and targets for improvement in 2008, which comprised the recommendations from the Energy Audit. If all of the 2008 targets have been successfully implemented the savings will represent an approximate 10% reduction in energy consumption and an estimated 15% reduction in cost. This translates into direct savings of around £3,800 p/a. The average payback period for the combined measures is 2.7 years. “Our Environmental Action Plan lists our impacts under the headings of: heating, lighting, equipment, office goods, cleaning materials and janitorial supplies, water, arts bar and café, administration and marketing, staff training and awareness, and travel and transport. These categories reflect the way that we understand and tackle our impacts, and capture both the resources we use and the behaviour and commitment of our staff towards reducing our impacts. As an example, under water it notes: • •

Currently, we use water meters in order to measure and reduce usage and we use water saving devices in all the toilet cisterns; In 2008 we will investigate reducing water usage in urinals.

“As a key part of our organisational management our environmental work has been reported in our Annual Report and Accounts (ARA) since 2006/07. In the 2006/07 report, in the Trustees Report under Future Plans and Activities, we were able to state that we would ‘develop an environmental policy for Artsadmin, Toynbee Studios and Artsadmin’s Artist’s projects.’ And that ‘progress against these objectives will be reported in the Trustees Report for the year ended 31st March 2008.’ When our 2007/08 ARA is published, it will increase awareness and accountability amongst our staff, artists and building users, and also act as an inspiration for similar organisations to follow suit.“

Biodiversity 1. 2. 3.

Buy organic food Grow plants in the office Put out water and food for birds

Further action: Check out your local biodiversity action plan for area-specific actions.

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Actions on social sustainability Employees 1. 2. 3.

Build skills assessment and development into employee appraisals Consider introducing flexible working for employees Institute at least one day’s collective volunteering for employees each year

Further action: create opportunities for recruiting from broader channels, including the local area, to encourage a more diverse group of employees.

Case study: RNID – working with our employees “We are the UK's largest charity for deaf and hard of hearing people, employing people in hundreds of different roles, right across the country. We also work to prevent hearing loss and ensure that people value their hearing. “It is very important to us that everybody at RNID has a shared vision and demonstrates our Organisational Values. Everything that we do is influenced by those values, six core beliefs that shape and define our working environment and culture: • • • • • •

Champions the cause – remembers at all times that RNID strives to create a world where deafness or hearing loss do not limit or determine opportunity and where people value their hearing Builds trust – creates an environment of trust through communicating in an open and honest way Inspires leadership – leads by example and encourages leadership in others Promotes teamwork – promotes collaboration and teamwork across RNID Champions the brand – makes the most of opportunities to gain positive exposure for RNID Delivers results – provides a service that meets or surpasses the expectations of internal and external customers

“Our Values and the behaviours associated with them provide standards of conduct, which underpin our commitment to equality and diversity in the work that we do and our workplace culture. We are committed to providing equality of opportunity – we welcome difference in our staff and our volunteers, and value and respect diversity in all aspects of our work and service delivery. Without this we would be unable to reflect the diversity of the communities we serve and with whom we work. “At RNID, we offer every member of staff the opportunity to learn British Sign Language. This enables staff to communicate better with colleagues for whom BSL is their first language. It is also useful for RNID staff to be able to use BSL when communicating with our stakeholders who use BSL. “We believe that good employee engagement is key to our organisation's success and we take the well-being and personal development of our staff very seriously, ensuring there are opportunities for everyone to reach and exceed their goals.”

Supporters 1. 2. 3.

Develop good supporter care policies Develop a code for working with volunteers Develop clear and easily accessible complaints procedures

Further action: consider what mechanisms supporters have for feeding back to your charity on how well you engage with and support them.

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Funders 1. 2. 3.

Develop good, well-managed relationships with funders Ensure both parties are happy with the frequency and form of communication and reporting Consult with funders as appropriate

Further action: Consider including the views of funders in your reporting – a ‘funder’s view’ can be a powerful verification of your charity’s impact.

3. Case study: CFDG and sustainability Charities’ sustainability management plans will vary, depending on the nature of individual charities. In order to help bring together the material of the previous few chapters we have provided a case study of CFDG’s sustainability and our management plan. We hope that this will help point the way, particularly to smaller and medium-sized charities.

Why tackle sustainability? Accountability: Like all charities, CFDG’s stakeholders – members, supporters and employees – are increasingly concerned with sustainability and the role that organisations can and should play in reducing their negative impacts. Developing our sustainability management plan and reporting on our sustainability (from 2008/09) are key to maintaining the confidence and support of our stakeholders. Efficiency and good management: By reducing our use of paper, ink and electricity, and our travel, we have made tangible savings which can be ploughed back into our work. We have found that our work on sustainability has also played a part in team building amongst staff. On the social side we have introduced a number of initiatives (on top of existing policies on equal opportunities, staff consultation and flexi-time), including staff volunteering days and an ethical pension option. Supporting our charitable mission: 1) Reputation: we maintain our reputation through accountability to our stakeholders on the issues that matter to them, including sustainability. Of course, our reputation also depends on the quality of the services that we provide to our members; in our ‘best practice’ stream this guidance is taking a lead on providing practical advice on sustainability to charity finance professionals. 2) Income: the majority of our income comes from members and corporate subscribers. Our economic sustainability therefore depends on this membership, which is in turn dependent on our reputation, and the quality and range of our services. 3) Beneficiaries’ needs: our members look to us to lead on upcoming issues, including sustainability, and to provide them with guidance and best practice. Best practice is one of our five strategic aims and stems directly from our charitable mission: to deliver services to our charity members and the sector at large, which enable those with financial responsibility to develop and adopt best practice. These are the drivers for sustainability action at CFDG, both in terms of reducing our own footprint and helping our members to successfully tackle theirs. Since it taps directly into our core concerns, sustainability is strategically important to CFDG. We will be considering the role of sustainability within our strategic plan when it next comes up for review.

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Identifying CFDG’s key impacts Size: 14 staff, operating from a shared office Annual turnover: £1m Location: based in London, with members across England and Wales We did a quick initial assessment of our internal, office-based impacts through desk-based research and talking to the different teams within CFDG. These impacts are shown in the table below, under the categories used in this guidance. However, we do of course seek to reflect the impacts that are relevant to us, so we have included a separate category for the impacts that stem from our events. These are not easy to assess, nor are they always directly under our control, but we are doing our best to mitigate them. As part of the initial assessment we completed a carbon footprint estimate through the Carbon Trust for 2007/08, which gave us a figure of 0.31 tonnes of C02 equivalent for our energy use (592.93 kWh), and 1.51 tonnes of C02 equivalent for transport. Over 2008/09 we are making a detailed baseline of our impacts where we are able to measure them, and we will use this to set targets as we move forward.

Impact area Energy Waste Transport Water Procurement Biodiversity Supporters

Employees Funders

Events

CFDG impacts Electricity for equipment (computers, monitors, telephones, combined printer, photocopier, fax and scanner). Paper, cardboard, some plastic, and occasionally tins and cans from staff meals. Walking, cycling, bus and tube for travelling in London, and the train for travelling outside of London. Water used in cleaning and for the toilets (managed by the building). Paper (including advertising materials, conference packs and publications), stationary, cleaning materials, electrical equipment, furniture, and food and drink. Purchase of products that may be harmful to the natural environment (e.g. cleaning products or foods). Our engagement with supporters (members, corporate supporters, other sector umbrella bodies and regulators), and the way in which we facilitate our work with them (e.g. attitude, commitment to their views, accessibility). The remuneration, benefits and working conditions of staff (e.g. working hours, workload, career progression). Funding largely comes from members and corporate supporters, and therefore our impacts here are our awareness of their contribution and the impact of the pricing structures of our paid-for events. Impacts from external meetings include travel, materials and catering.

Having a shared building means that our landlord, CAN Mezzanine, controls the overall building management. We are therefore somewhat constrained in our action on waste, water saving, temperature, the provenance of our energy, and energy efficiency in the building and building fabric. Happily though, CAN are very receptive to environmental improvements where they are feasible, and in particular we have excellent recycling facilities. Since our office is in central London almost all our staff and visitors travel to us by public transport, although staff travel to members’ meeting further afield by train. Action that we have taken to promote sustainable travel includes giving staff interest-free bicycle loans of up to £500, and allowing the recommended 20p mileage for business travel by bike. Building a consensus for action Trustee and senior management support The rationale for working on sustainability and its strategic relevance were developed by the whole staff team, this was followed up by the sustainability management plan. When this groundwork had been completed we took our new sustainability policy to the trustees for approval and feedback. The trustees have been very supportive of our sustainability work and from now on they will be scrutinising our sustainability reporting and our progress against the targets in our sustainability management plan, which are the drivers of our commitment to continual improvement.

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Collective responsibility Sustainability work at CFDG is very much a collective responsibility, and indeed works best in this way. Our success depends on every staff member playing their part in office-wide targets, like reducing paper and electricity use, and also in taking the lead for different areas of our work, such as efficiency in equipment or sustainable procurement. This is in general a very positive aspect of sustainability work, since it has become a shared interest and a source of some pride in the office. Staff accountability All staff are responsible for shared targets, and for individual areas of work, but in an organisation the size of CFDG we have found that overall sustainability work can be managed by one member of staff. This person is supported by their line manager and the senior management where appropriate, and has sustainability work written into their objectives, so that responsibility for moving the work forward and keeping to targets ultimately lies with one member of staff.

Aligning sustainability with our work Sustainability has been drawn into the strategic running of CFDG through our best practice work, which is one of our five strategic areas. Best practice incorporates our research work, which develops and promotes best practice, and which therefore includes this publication. It also includes the way CFDG is run – we aim to achieve best practice in the mitigation of our impacts and in reporting on that work. We have recognised the need to address the impacts on sustainability that are embedded in our mission and the nature of our work; we will be continually assessing our charitable work against sustainability objectives. An example of this has been considering ways to reduce members’ travel to meetings without compromising the benefits they receive. Suggestions have included online streaming of presentations or making podcasts of members’ meetings. In operational terms, sustainability has fitted smoothly into the workload of a single staff member, who has led on mitigating CFDG’s own impacts and on this report. This staff member has the necessary time and knowledge, and since CFDG is a small organisation keeping sustainability in the remit of a single staff member works effectively. We have however been careful to try and disseminate awareness and commitment for sustainability across the organisation.

Preparing our sustainability management plan When we came to draw up a management plan we decided that the One Planet Living (OPL) framework was appropriate for our size and the scale of our impacts, and we like the way that it draws together environmental and social impacts. This means that the categories of impact on which we will report, presented later in this case study, will be slightly different to those recommended in this report. The initial development of the plan was done with the lead staff member and the chief executive, and was then taken to the whole staff team for discussion of its scope, the nature of the actions proposed, distribution of responsibility and deadlines. Some amendments followed from this process, such as moving to electronic invoicing, promoting blood donation amongst staff and looking into a building-wide blood donation scheme. We were also able to make some necessary changes in staff responsibilities at an early stage, which meant that the plan fitted with existing workloads and the individual interests of staff. Overall this meant that staff were much more engaged with the plan, and we believe it has contributed significantly to its success. The plan was organised by impact area – i.e. by the ten principles of OPL – and by quick wins and long-term aims. This helped to give the plan shape and provided an immediate sense of achievement in some areas, as well as laying the basis for a long-term commitment. Some of our actions have included replacing our two printers, fax machine and scanner with one machine that can do all the work for half the cost and less energy. All our computers are now automatically set to print double-sided and in black and white, and we encourage staff to print on scrap paper where possible. We also have energy-saving plugs that turn our computers and printer off at the wall, and we’re making an effort to order more vegetarian food for meetings, as that also cuts down on carbon emissions.

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The plan is supported by our sustainability policy. The sustainability management plan encompassed work on sustainable procurement, including the adoption of a sustainable procurement policy which was accompanied by information for staff on what sustainable procurement means, and how their procurement practices needed to change to reflect it. We have made this information and our plans and policies publicly available on our website: www.cfdg.org.uk/cfdg/influencing_sustainability.asp Reporting on our sustainability We will report on our sustainability for the first time in our 2008/09 Annual Report and Accounts (ARA). Reporting principles When we come to our first sustainability report we will be following the standards set out in the Charities SORP 2005 (2008 edition), which governs the rest of our ARA. Reporting boundaries CFDG is a charitable company, with one subsidiary. The entity we refer to in our sustainability report is the same as the entity referred to in the rest of our ARA and we will therefore be reporting on the sustainability of the whole organisation. Materiality We believe that anything that affects CFDG’s reputation for promoting and leading on excellent management (general and financial), accountability and transparency is material to the organisation. CFDG relies on its reputation to be an effective and credible organisation, because our reputation is critical to our ability to attract members and to be a voice for charity finance professionals. Sustainability is now a part of excellent management, as well as being a concern for many of our stakeholders, to whom we aim to be as accountable and transparent as possible. Content and gathering data Our sustainability reporting will show why we are carrying this work forward and what we have done, including the organisational framework and supporting policies, and our targets and performance data from the past year. We will be presenting information on the ten areas of action in our sustainability management plan, as well as staff behaviour around sustainability. This information will cover major achievements and also areas where there is further work to do. Currently, our sustainability management plan is populated mainly with one-off actions and does not set overall targets. This is because when the plan was adopted we had no reliable quantitative figures for our resource use. We have been baselining our resource use in 2008/09, and will be able to set overall targets for reductions in 2009/10, in, for example, electricity use and miles travelled by higher impact modes of transport. We will not report on all of the actions contained in the sustainability management plan. Instead, we will aim to provide a useful selection of significant actions, which broadly covers all the areas of the plan.

Impact area Energy Waste Travel Materials Food Water Habitat and Wildlife Culture and Heritage

Source of data Energy-use figures can be provided by CAN (an average); the number and energy-efficiency of new and existing appliances There is currently no available figure for the amount of waste we produce; Procurement audit for 2008/09 (the amount of paper and envelopes used) Figures from 2008/09; number of staff who have taken up bicycle loans Procurement audit for 2008/09 Procurement audit for 2008/09; information about food at events, where available Average water-use figures may be available through CAN Procurement audit for 2008/09 (proportion of organic food) Discreet actions (spot check of cultural activity encouraged at CFDG)

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Equity and fairtrade Health and welfare Staff behaviour

Procurement audit for 2008/09 (fairtrade goods and work towards better labour standards); performance against staff policies (e.g. equal opportunities); discreet actions (e.g. introduction of ethical pension option) Staff survey (staff involvement in, and commitment to sustainability); discreet actions (introduction of staff volunteering) Overall sustainability performance (this covers the assessment of a number of disparate actions in our sustainability management plan)

Presentation and publication We will be reporting on our sustainability in the Trustees Annual Report (TAR) of our ARA, since it is material to CFDG. We do not currently have the requisite amount of data to produce a longer standalone sustainability report, and in terms of transparency we already have a webpage devoted to our sustainability which shows our rationale for action, our management approach, our sustainability management plan and related policies. Assurance Our ARA is independently audited in line with the Charity Commission’s requirements. However, we do not feel that it is necessary in 2008/09 to have our sustainability information audited since this is our first year of reporting, we have not completed our baselining, we are a small charity and sustainability does not form a part of our stated charitable objectives.

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Reporting on Sustainability 1. Introduction This chapter presents the case for why charities should report on their sustainability, and demonstrates what they need to do. Although sustainability reporting requires a fresh rationale and new techniques, we believe that best practice here shares much common ground with financial reporting, as in the overlap with risk management. Finance directors’ existing skills and experience will be key to their development of sustainability reporting.

‘Sustainability Reporting is much more than an output of data. It is a journey that an organisation embarks on to understand and integrate the relationship between sustainability and the strategic direction of a company. A product of this journey is a regular (usually annual) snapshot of strategy and performance where an organisation publicly discloses its economic, environmental, and social performance forming a key communication to stakeholders.’ UK Green Building Council 17

The purposes of sustainability reporting Demonstrating accountability: sustainability reporting provides an opportunity for organisations to demonstrate their accountability and transparency on this issue to stakeholders, through identification of impacts and a review of subsequent performance. The accountability motive can stretch into active engagement with stakeholders, who can help shape the aims, format and outcomes of the report. Driving internal improvement: reporting forms the preparation for the next stage of reviewing, by presenting achievements, areas for further improvement and new goals. The continued cycle of Review Æ Act Æ Report should thus lead to sustainability reports that show annual improvements in performance and the depth and breadth of action (where appropriate – some goals will be easily completed, others will be ongoing). Year on year advancement, where possible, is particularly important for motivating staff.

17

Key issues • Strategic position: explain what function sustainability reporting serves in the strategic management of sustainability in your charity. • Audience: consult with stakeholders to ensure that the report reflects their needs in a userfriendly format. • Outcomes: ensure that the reports’ outcomes are clear to its readers, and that the report is part of an ongoing process of accountability and improvement.

More information: • Business Link: www.businesslink.gov.uk (Environment and efficiency > managing environmental issues in your business > create a strategic approach to sustainable development > monitor and report on sustainability performance) • SustainAbility, Count me in: the reader’s take on sustainability reporting: www.sustainability.com

Organisational measurement and reporting, UK Green Building Council, p.4

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Case study: BT and the value of sustainability reporting “Starting with its first environment report in 1992, BT has been reporting on its sustainability performance annually for many years, and has been named as the winner of the best sustainability report award by the Association of Chartered Certified Accountants (ACCA) several times, most recently in December 2008. It believes that this long standing commitment to public reporting not only provides benefits to external stakeholders, but has also helped to engage its employees and to deliver significant year on year performance improvements. Transparency and honesty form the foundations of BT’s reporting relationship with its stakeholders; regular engagement allows BT to determine the sustainability issues most important to its stakeholders and relevant to its business, the ‘material’ sustainability issues. “As a global business serving customers in more than 170 countries, the readers of BT’s reports are many and varied; from investors and analysts, to customers, academics and employees. To meet the needs of these diverse stakeholders, a short printed report is produced which summarises progress made on key sustainability performance indicators and those issues deemed to be materially important It provides a simple overview of BT’s sustainability strategy and achievements and has a limited print run. In 2008, as a result of requests from BT employees around the world, the printed report has been translated into six languages as a downloadable resource. “The full report is set within BT’s Betterworld web site (www.btplc.com/betterworld), an accessible resource which provides a wide range of multi-media information on BT’s sustainability and CSR programmes. BT aims for its reporting to be open and transparent, and the online database allows quick and easy access to more detailed information and progress against improvement targets. The database has been indexed so that it can be searched via its business principles, the UN Global Compact and the Global Reporting Initiative. There are some 50,000 visits a month and it is used extensively by employees, academia, businesses and other stakeholders who have a specific area of interest or a need for a greater level of detail. “The sustainability report is independently assessed against the internationally recognised AA1000 Assurance Standard. BT’s Leadership Panel, an advisory group of external sustainability experts, provides independent guidance and advice, challenging BT on its sustainability strategy and performance, and commenting on its report. “BT’s employees are key to its success in driving sustainability improvements. It has set a number of Key Performance Indicators with supporting, long term, improvement targets; these range from Customer Service and Climate Change to Recycling and Supply Chain Human Rights. With over 111,000 employees operating from more than 60 countries ensuring that everyone has access to accurate and timely information is a huge undertaking. The online report ensures 24 hour a day access to accurate information regardless of location. The data is used for producing presentations, as collateral for events, in response to stakeholder queries or to support contract bids or tenders.”

2. Preparation Reporting Principles Reporting principles are likely to be common to, or stem from best practice in financial reporting. We have recommended the reporting principles of the GRI Sustainability Reporting Guidelines since they are the most widely used international guidelines: Principles for defining content 18 Materiality Stakeholder inclusion Sustainability context Completeness 18

Sustainability Reporting Guidelines, Global Reporting Initiative, p. 6 19 ibid

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Principles for ensuring quality 19 Balance (in the reported levels of performance) Comparability Accuracy Timeliness Clarity Reliability

Reporting on Sustainability

If you are adopting reporting principles it is important to define what they mean within your report – principles like ‘transparency’ and ‘balance’ can mean different things to different people. They must also be integrated at the earliest stage, so that they can underpin the process and shape the final report. There are other sets of reporting principles, each of which has a slightly different audience and angle on sustainability:

• The Greenhouse Gas (GHG) Protocol, an international accounting tool for emissions accounting (www.ghgprotocol.org); • Defra, the Department for the Environment, Food and Rural Affairs (www.defra.gov.uk/environment); • The Accounting for Sustainability project, which devised a methodology for embedding sustainability within organisations and for reporting on their impacts (www.sustainabilityatwork.org.uk).

Reporting boundaries As in financial reporting, organisations have to look at where the boundaries of sustainability reporting fall, in terms of projects, geographic limits, suppliers and supply chains. In setting organisational boundaries charities should aim to cover the same entity that is referred to in the Annual Report and Accounts. The GRI advise that organisations should include any entities which they control or over which they operate significant influence.20 Charities also need to decide what their operational boundaries are, i.e. which impacts can legitimately be attributed to them, and which they should therefore seek to reduce. In starting out, charities should seek to report on their direct impacts and on their most immediate indirect impacts. As they progress, they can look to widen the circle of reporting to include more complex indirect impacts such as those within their supply chains and in long-term project work. In practice this will be relatively straightforward for the majority of charities. However, for large and complex charities it would be very difficult to produce an ideally complete first sustainability report, and they should therefore expand their boundaries as their sustainability reporting advances. We can also take a lead from the standards applied to businesses. The Accounting Standards Board’s Reporting Statement: Operating and Financial

Review, notes that disclosure should include information about: 28. a) ‘environmental matters (including the impact of the business of the entity on the environment); b) the entity’s employees; c) social and community issues.’21 Defra notes that, ‘the Government expects businesses to report on their significant environmental impacts whether they are direct or indirect. Businesses are likely to derive benefit from positively influencing their indirect environmental impacts for at least three reasons: • ‘The issues may be significant in terms of the organisation’s overall environmental impact; • ‘Organisations need to be able to demonstrate that reducing their direct impacts is not at the expense of increased impacts elsewhere; and, • ‘Some stakeholders may deem them accountable for supply-chain impacts, particularly where they have significant purchasing power in the marketplace.’22 The Greenhouse Gas Protocol defines different kinds of emissions more closely than we have here, and may be of interest to large and international charities. See the section, ‘Existing reporting systems,’ later in this chapter for more information.

Materiality In traditional financial accounting and reporting ‘materiality’ concerns the importance of an amount, transaction or discrepancy, in terms of its effect on the organisation’s financial position. Charities must be alive to their economic sustainability, but because they have a broader motive basis than for-profit

20 21 22

business they also have a broader range of issues that are ‘material’. Since the impact of charities’ work and their wider reputation is also ‘material’, so are the social and environmental impacts that relate to a charity’s core work and reputation. This is not to say that charities should report on every energy-efficient

Sustainability Reporting Guidelines, Global Reporting Initiative, p.18 Reporting Statement: Operating and Financial Review, Accounting Standards Board, p. 14 Environmental Key Performance Indicators: Reporting Guidelines for UK Business, Defra and Trucost, p. 22.

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lightbulb they install, but that they should consider a wider base of material factors than the merely economic. A report on materiality was produced in 2006 by AccountAbility, BT and Lloyd’s Register Quality Assurance (LRQA), The Materiality Report: Aligning Strategy, Performance and Reporting. This report suggests that deciding what to report on should cement the way in which organisations ‘align their approach to social and environmental issues with their strategy, practices and ultimately performance.’23 Moreover, whereas old-fashioned materiality concepts were used as a basis to provide financial information, current reporting should focus on:

• a longer term view of the issues; • a wider view of the people who affect performance and need information to guide their actions; • the greater range of information needed for sound decision making – financial and nonfinancial, forwards- as well as backwards-looking. The GHG Protocol makes some interesting observations on materiality, concerning materiality thresholds for reporting emissions and for discrepancies. This will be of interest to any charities that have significant direct operational emissions (www.ghgprotocol.org).

Content and gathering data Content As with sustainability action, reporting on sustainability should cover that which is strategically relevant. In most cases though your report should include: • An introduction to the charity’s work on sustainability • The charity’s management approach to sustainability • Relevant policies and plans and their implementation • Performance data, including current and future targets • Contextual information (i.e. information that gives the reader more background on the charity’s sustainability work, such as vignettes showing the effect on beneficiaries) • The reasons for sustainability reporting • Analysis of the data This content expands on the three key areas identified as ‘standard disclosures’ in the GRI G3 Sustainability Reporting Guidelines: Strategy and Profile; Management Approach; and Performance Indicators.24 Above all, the content of your report must reflect the targets and/ or KPIs that that you have set to measure the success of your sustainability management plan. If it does not, it will be impossible to assess your progress in dealing with material issues.

23 24

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A number of charities have included statements of intent around sustainability issues in their Annual Report and Accounts in the last few years. A typical example would be: ‘At the X charity we recognise that our charitable activities have direct and indirect impacts on the environment, and that we have a responsibility to manage and reduce those impacts. We are committed to continuous improvement in sustainable development, and to working with all our stakeholders to tackle this issue.’ These statements certainly show willing, but are necessarily meaningless unless they are backed up by tangible action in the form of plans, policies and/ or performance data.

Gathering data Charities need to show how they are addressing their impacts on sustainability, by reporting against the targets in their sustainability plans. In order to do this they need processes which will allow them to gather the relevant data. It is important to remember that your data collection system will only be effective if the sustainability reporting agenda is understood and appreciated across the charity. In collecting useful data, consider: 1. which targets are material and must be reported against, and which you wish to report against; 2. what data is needed to report against these targets: a. do you have enough data to be able to report?

The Materiality Report: Aligning Strategy, Performance and Reporting, A Briefing, AccountAbility, BT, LRQA, p.7 Sustainability Reporting Guidelines, Global Reporting Initiative, p.19

Reporting on Sustainability

b.

if you already collect this data, how reliable is your collection system and how long has it been in place? 3. in what units different types of data are measured (see ‘carrying out a sustainability audit’ in Appendix C). Wherever possible organisations should aim to give data in both absolute and relative terms, in order to achieve greater transparency.25 4. what format you want to present the data in. The format will broadly be one/ several of the three types recommended by the GRI: a. Indicators of operational performance b. Indicators of management performance c. Narrative descriptions 26 The guidance from the GRI and UK’s Department for the Environment, Food and Rural Affairs (Defra) generally couches impacts in terms of greenhouse gas emissions. However, charities are unlikely to have any direct emissions so they will be looking at C02 equivalent emissions in order to standardise different environmental impacts. Defra provides a useful list of conversion factors for measuring impacts in carbon: www.defra.gov.uk/environment/business/reporting/co nversion-factors.htm

• Waste: Waste benchmarker tool (www.environmentagency.gov.uk/research/library/data/34173.aspx) • Water: Water account tool (www.envirowise.gov.uk/uk/Topics-andIssues/Water/Water-Tools/Water-accounttool.html), Typical and Best Practice benchmarks (www.environmentagency.gov.uk/business/topics/water/34866.aspx) • General: Environmental Performance Indicator (www.environmentagency.gov.uk/apps/wastesurvey1/Performance.js p?lang=_e)

Many of these websites also have useful documents on benchmarking, generally free to download. Charities may want to take a more rigorous attitude to data collection and its use in assessing what areas to act and report on. In this case charities should take a year to baseline performance.

25

Sustainability Reporting Guidelines, Global Reporting Initiative, pp. 14, 25 26 ibid, p.18

The difficulty of gathering data will depend largely on the size and complexity of the charity, and whether there are existing data collection processes that you can use. Unfortunately, there are no existing sector benchmarks for sustainability performance, but there are benchmarking tools available for specific areas: • Energy: Office benchmarking tool (www.carbontrust.co.uk/energy/assessyourorgani sation/benchmarking.htm)

Case study: Ethical Property Company – delivering on our promises “The Ethical Property Company is a unique initiative in ethical investment. We buy properties and develop them as centres that bring charities, co-operatives, community and campaign groups together under one roof where they can share skills and ideas. “As a social business that aims to offer genuine triple-bottom line returns to its investors, we see our social audit as underpinning our ethicality. Our social audit encompasses social and environmental performance indicators that are critical to the functioning of our organisation and the benefits it delivers, and which underpin our public reporting on sustainability. We aim for a virtuous circle of improvement through setting targets, measuring our performance, identifying actions we might take to improve results, implementing these actions, and then, a year later, measuring our performance to see if we have improved. We report publicly on that audit in our annual report and accounts because we want our stakeholders to have confidence in our claims about the social and environmental improvements that we deliver. “Our social audit forms an essential part of our strategic planning process, because it allows us to measure and interrogate the tangible returns of our work. In addition, our audit ensures that we maintain the highest standards of honesty and transparency. Charities and social businesses are no different in that regard – they need to carry their stakeholders with them, even if it is not always good news.

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Reporting on Sustainability

“In setting targets we have found that there are many indicators which can help quantify social and environmental benefits, such as carbon targets or the index of multiple deprivation. It can be helpful to look for externally recognised targets first, as these will allow comparison to national standards. Where there is no quantifiable target we have taken a more qualitative approach, setting out in narrative terms where we wish to be in the following year and assessing our achievement at the year end against that statement. Indeed, in the first year of introducing a new reporting area we do just describe what in general it is we want to report on, and in the next year we go part of the way there, perhaps with an indicator but without a target. We spend three or four years developing any new measure because we do not want to introduce targets or indicators too hastily, and then have to change the reporting base and compromise the meaningfulness of our year on year results. For example, we’ve now decided that we should drop our carbon targets by 3% a year, to have a chance of cutting carbon 80% by 2050. “It’s taken us ten years to get the audit to where we want it, but the work is never done. Recently we have begun to feel that in some cases we are a slave to our targets. The things that are easiest to measure are the ones that we have ended up concentrating on, even if they are not the most important. Also, we are measuring some things year on year and just getting the same result again and again. So in 2008/09 we have decided to weight all our areas of benefit according to their importance, so we can decide what resources to commit to them. And for some areas, we’ve decided to expend more of those resources improving results rather than on reporting them. All our accounts are available on our website (www.ethicalproperty.co.uk), and our annual accounts are published every March. “Social auditing is a matter of being both consistent year on year, and flexible enough to respond to current demands. Skills that any charity finance director is surely already well practised in!”

2. When and where to report As we said in the introduction to this chapter, readers should know from the start of a report why it has been written, who it is aimed at and what it aims to achieve. The relevant information should be presented in as clear, concise and engaging a way as possible. In practice, the key is to find a structure and layout that balances clarity on the one hand and interest on the other. Since charities will be reporting on material sustainability impacts, we believe sustainability reporting should be integrated with other material issues in the Trustees Annual Reporting (TAR), in the Annual Report and Accounts. For some, public disclosure of material impacts in the TAR will be sufficient. For others, where sustainability is critical to their core work or the expectations of their stakeholders, an additional, more in-depth report may be appropriate. A longer report will provide a greater degree of accountability and transparency, help to motivate staff and raise standards across the sector. However, any additional report should continue to be driven by the disclosure of material impacts in the TAR. An additional report could be a standalone document, or it could form part of another report, such as an annual review or impact report. Online reporting is also an option which can work well thanks to its

36

accessibility and low environmental impact. We would certainly recommend that charities publish a copy of their reports online, for greater accountability and transparency. Beyond this, high quality HTML reports which are highly dynamic and navigable are also starting to appear. Whilst these are a welcome development, charities wishing to publish sustainability reports only online should take care to consider the needs of different stakeholders and possible readers of the report; wherever possible online reports should be compliant with accessibility standards for digital and online material. The precise format and frequency of sustainability reporting will depend, as with everything else, on the nature and size of the charity. However, it is important to integrate and/ or coordinate sustainability reporting with existing reporting, to reaffirm the linkages between social, environmental and financial performance. In addition, all sustainability reporting should be undertaken as a serious commitment over a multi-year period in order for the charity and its stakeholders to be able to track the charity’s performance against its stated aims. If charities wish to undertake a variety of different formats for sustainability reporting it is important to maintain a coherent approach in terms of content and style. Online reports that are updated more regularly need to make this fact clear. Likewise, successive

Reporting on Sustainability

reports need to be broadly similar so that readers can compare organisational performance over a longer period.

Online sustainability reports: • BT: www.btplc.com/Societyandenvironment/Ourapproach/Sustainabilityreport/index.aspx • WWF: www.wwf.org.uk/what_we_do/about_us/environmental_report_2007/index.cfm

Case study: The Church Commissioners on why and where they report “With care for creation a key part of the Christian message and environmental challenges high on the public agenda, it is no surprise that the Church of England takes sustainability very seriously. Its government-sponsored Shrinking the Footprint campaign gives practical advice to the church’s many bodies – its national and regional offices, 43 cathedrals, 16,000 parishes and churches – on reducing energy and resource use. The target is to cut carbon emissions to 40% of present levels by 2050. “The Church Commissioners for England, who manage a fund of some £5bn held in shares and property to support the church’s work, have a part to play as investors, landowners and service providers. As investors, we aim to maximise returns within an ethical framework. We are advised by the Church of England Ethical Investment Advisory Group, and we have a stake in Impax Environmental Markets Plc, a trust that has focused on investment in markets for cleaner or more efficient delivery of energy, water and waste; we hope to invest more in this area. As a one of the UK’s major landowners (100,000+ acres) we support long-term working relationships with our farm tenants, and have helped them to invest in their businesses and carry out environmental stewardship schemes. As service providers, the Commissioners aim to provide energy-efficient living and working accommodation for the Church of England’s bishops, and are in the progress of greening their official cars. In the refurbishment of our office space we have been improving our heating systems, ventilation, lighting and recycling. We will work with the Carbon Trust to monitor progress and make further improvements. “We report on our sustainability initiatives in our Annual Report and Accounts for three reasons: 1. We wish to demonstrate our commitment to the environmental work that the Church is taking forward; 2. The readers of our report expect us to provide that accountability on environmental issues; 3. Our board of trustees believe that it is important to bring sustainability into our reporting, and that for the reasons above it is material enough to go into the Annual Report and Accounts.”

4. Assurance Assurance confirms the accuracy and credibility of reports, and thus improves the confidence of stakeholders. It is also a tool for driving internal motivation and improvement. Many or most sustainability reporters now use assurance, and it has become a mark of good practice. The type of assurance that charities choose will depend on their resources, size and the importance of sustainability to their stakeholders. The Assure View report from Corporate Register identifies four main forms of assurance:

• Internal assurance: an internal assurance team can provide a useful statement, provided it has the appropriate skills and independence from the report writers. • Stakeholder panels: these are still not widely used, but they can also provide a useful assurance statement. When using such a panel, charities should ensure that there is a suitable mix of different stakeholders, including at least some with experience of assurance and/ or audit work. • An expert opinion: a single, well-known expert in sustainability or social reporting can provide a commentary or opinion on the report. Again, this

37

Reporting on Sustainability

approach can work but it will probably only provide an overall opinion rather than in-depth verification of the accuracy of the information or the underlying systems. It should be made clear if this is an opinion rather than an assurance statement. • An independent organisation: using an organisation that specialises in assurance and is confident in providing assurance for charities on sustainability will provide the most extensive and credible assurance. Many assurers can also provide insights into management systems, data collection, target setting and even risk identification. However, assurance of this kind can be expensive, and will not therefore be appropriate for all charities. The Assure View report also suggests the most important elements of an assurance statement: a) Reference to standardised approaches, i.e. the AA1000 Assurance Standard, ISAE 3000 or the

b)

c) d)

e) f)

GRI G3 Guidelines, and levels of assurance, i.e. 27; ‘reasonable’ or ‘limited’ levels Specific declarations of the intended audience, any disclaimers (typically advising stakeholders not to rely on the assurance statement in the course of critical decision-making), and the independence and responsibilities of the assurer; A clear description of the scope and methodology used; Recommendations from the assurer on areas for improvement and/ or good practice that can be expanded across the organisation; Specific reference to the completeness or otherwise of the report; An assurance conclusion.

More information: • Assure View: The CSR Assurance Statement Report, Corporate Register, www.corporateregister.com/pdf/AssureView.pdf

5. Existing reporting systems There are a number of specific sustainability accounting and/ or reporting systems in existence, and we have outlined the ones most likely to be of interest to charities. The Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines www.globalreporting.org The GRI is a multi-stakeholder network that promotes consistent, regular and comparable reporting on economic, environmental and social performance. The GRI’s G3 Sustainability Reporting Guidelines, now in their 3rd edition, are the most widely recognised and used global standard for sustainability reporting. They provide useful guidance on reporting scope and principles, standard disclosures, i.e. exactly what information organisations should provide, performance indicators, formats, gathering data, updating reports and assurance. The guidelines give KPIs for sustainability under the headings of economic, environmental, social (labour practices and decent work), human rights, society, and product responsibility issues. The guidelines are ‘designed for use by organisations of any size, sector or location,’ although they are currently orientated towards companies and government.28 However, the GRI are in the process of drawing up sector-specific

27

guidelines for not-for-profits, which are likely to be released in 2010. The Greenhouse Gas Protocol www.ghgprotocol.org The Greenhouse Gas Protocol was developed by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI). It is an international accounting tool for understanding, quantifying and managing greenhouse gas emissions. It is aimed at organisations reporting on their greenhouse gas emissions, rather than their sustainability in the wider sense. The Protocol defines different kinds of emissions as belonging to one of three scopes, for which they recommend different levels of reporting. Scope 1 (direct): these are direct emissions, i.e. those produced from sources owned or controlled by the parent charity. Generally only those charities who undertake any fuel combustion themselves, e.g. through manufacturing, and those charities who own company vehicles will have to account for scope 1 emissions.

AA 1000 Assurance Standard: www.accountability21.net; ISAE 3000: www.ifac.org/IAASB; GRI G3 Guidelines: www.globalreporting.org. 28 Sustainability Reporting Guidelines, Global Reporting Initiative, p.3

38

Reporting on Sustainability

Scope 2 (indirect): these emissions are those created through electricity purchased for the organisation’s own use (‘electricity that is consumed in its owned or controlled equipment or operations.’)29 Scope 3 (indirect): these emissions are ‘a consequence of the activities of the company, but occur from sources not owned or controlled by the company.’ Reporting scope 3 emissions is optional, but since this is where the bulk of most charities’ emissions will occur, charities that do not look at their indirect emissions will miss the point of a sustainability report, since they will provide almost no information on their environmental performance.

The Connected Reporting Framework www.accountingforsustainability.org www.sustainabilityatwork.org.uk The Accounting for Sustainability project aims to tackle the lack of ‘sustainability systems and processes’.30 The project provides the guidance and tools to make sure that sustainability becomes an integrated and strategic part of all organisations’ work. Their guidance on embedding sustainability can be found on their Sustainability at Work website. The work on reporting led to a new reporting model, the Connected Reporting Framework (CRF), which shows how all areas of organisational performance can be presented in a connected way, taking the strategic importance of sustainability through into organisational reporting.

There is a focus on environmental impacts, but the report Accounting for Sustainability states: ‘Reporting social impacts is generally more difficult to do in a quantified and comparable manner; however, impacts on issues such as wage levels, working conditions and social cohesion and communities are, of course, important and the proposed Connected Reporting Framework provides for the reporting of this type of information.’31 Accounting for Sustainability gives more detail on the CRF and a useful illustration of what it might look like in practice. It can be downloaded from the Accounting for Sustainability website.

Social Accounting and Audit, and Social Return on Investment www.socialauditnetwork.org.uk/what%202.htm Social audit and accounting provides integrated systems to account for and report on environmental, social and economic issues. The Social Audit Network currently provides a good overview of the subject, including a useful directory of social accounts from organisations around the UK, including many community organisations and charities. The Social Audit Network have a recent report available to download from their website, entitled Really Telling Accounts. Social Return on Investment aims to measure the social and financial value created by a particular organisation or a particular project, by attributing a financial value to intangible social outcomes. The Office of the Third Sector is currently running a project on SROI, aiming to make it more accessible and cost effective (www.cabinetoffice.gov.uk/third_sector).

6. Examples of sustainability reports Sources of reports • ACCA Sustainability reporting awards: www.accaglobal.com/uk/publicinterest/sustainability • Accounting for Sustainability: www.accountingforsustainability.org/reporting • Corporate Register: www.corporateregister.com • Global Reporting Initiative: www.globalreporting.org/GRIReports • Government financial reporting manual: www.financial-reporting.gov.uk/Sustainability_Reporting.htm Individual reports • Allianz Sustainable Development Report 2007/08: www.allianz.com/en/allianz_group/sustainability/index.html

29

The Greenhouse Gas Protocol: A Corporate Reporting and Accounting Standard, revised edition, World Business Council for Sustainability Development and World Resources Institute, p.27 30 Accounting for Sustainability, Accounting for Sustainability, p. 4 31 ibid p. 27

39

Reporting on Sustainability

• • •

BT Sustainability report 2008: www.btplc.com/Societyandenvironment/Ourapproach/Sustainabilityreport/index.aspx Traidcraft Social Accounts 2008: www.traidcraft.co.uk/about_traidcraft/social_accounts WWF: www.wwf.org.uk/what_we_do/about_us/environmental_report_2007/index.cfm

Case study: Oxfam, accountability and using the GRI G3 guidelines “Oxfam GB published its first Accountability (or Sustainability) Report (“The Report”) in 2007 (www.oxfam.org.uk/accountability) and we have now incorporated it into our Annual Report and Accounts (www.oxfam.org.uk/resources/accounts/annual_report_accounts.html). “Why? Accountability is hard work, but to walk the talk, values-based organisations need to produce evidence. Our reporting framework aims to achieve this. Climate change is one of our key drivers, in particular because it impacts disproportionately on people living in poverty, and on many of the countries in which we operate. But operational sustainability and accountability have wider social and economic angles: our procurement practices; staffing issues; and the four dimensions described by One World Trust (www.oneworldtrust.org) - transparency, participation, evaluation, and complaints and redress. Our Accountability Reports say what we have done and what we will do, and establish an obligation to hold ourselves publicly to account for each commitment. “How? We started with our 2006 Risk Register which contained a new Risk, that Council and the Corporate Management Team thinking was not sufficiently challenged by stakeholders and therefore decisions and thinking become decoupled from stakeholders. We created a small cross-team accountability working group, which reviewed the various models for sustainability reporting. We carried out a governance review using the Code of Governance for the Voluntary Sector. We agreed to the four One World Trust dimensions (and have after two years completed a suite of Partnership, Evaluation and Complaints policies, (www.oxfam.org.uk/resources/accounts/index.html)). However, we needed a framework for our Report. “We chose the Global Reporting Initiative’s G3 guidelines (www.globalreporting.org) because it is widely used, addressed many of the dimensions we saw as important, and GRI had committed to producing an NGO specific supplement. When this supplement is published, in 2010, we plan to adopt it for our future reporting (www.globalreporting.org/ReportingFramework/SectorSupplements/NGO). Although GRI is quite complex, and currently suitable only for charities with an annual turnover of about £500,000 or over, we are pushing GRI to approve a slimmed down set of key indicators suitable for smaller charities. “Our first step in integrating the G3 Guidelines was to conduct interviews with key staff. One staff member collated the carbon footprint, using a methodology approved by Defra, although we did not ask them to audit the results. The results contained some surprises, and gave important clues for reduction: air conditioning for our computer room can be reduced by replacing several large old servers with smaller newer models; paper usage needed to be radically reduced, including more digital use. Our biggest reporting gap is collating our international footprint, as we work in over 70 countries, and this is an action for 2009. “Our procurement team embraced the opportunity to push our sustainability further into our supply chain, with promising results. We exploited the opportunity to tie the Report into a big focus on quality and beneficiary participation in our International operations, where NGOs have been working to improve accountability on issues like participation, investigation of sexual abuse and exploitation, and effective complaints mechanisms, including through a powerful peer review process. Our second Report reveals we are not doing enough to report on incidents of exploitation, and we have committed to further education and training. “We have decided for the time being not to seek external assurance, but recognise that this is an important area for us to consider, based on a cost-benefit analysis, in 2010. “Finally, we felt we needed to commit to targets and plans for accountability over the three-year period of our Strategic Plan, so our second Report identified failings and commented on progress.”

40

Conclusion

Conclusion Charities should always have regard to their sustainability. Economic, environmental and social issues tie up to build charities that are most effectively able to serve and support their beneficiaries. This guidance aims to give charities the confidence to pursue environmental and social, as well as economic sustainability, by showing why it is important and what they can do. We believe that developing strategic management of sustainability in a form that is tailored to the individual charity need be neither hard nor costly, and will improve accountability, efficiency and good management. Perhaps most importantly it will also further charities’ missions by supporting their reputations, income and the needs of their beneficiaries. Sustainability reporting is undeniably in its early stages. We would not say that it will necessarily be simple to start off with, but we do believe that it must be a critical part of a serious commitment to sustainability. We also believe that there is enough established practice, both in charities and in the corporate sector, to show the way. Sustainability is one of the key issues of our time. We hope that this guidance paves the way for charities to recognise, adapt to and benefit from that fact.

Acknowledgements We would like to thank everyone who has helped in the preparation of this guidance, including the support of all the staff at CFDG. Particular thanks are due to our working party: Laura Bowman (Tudor Trust) Caroline Emerton (formerly of WWF) Eilish Kavanagh (Friends of the Earth) Rachel Jackson (ACCA) John Merivale (City Bridge Trust) Alan McGill (PwC) Monica Saini (Christian Aid) Janet Slade (Charity Commission) John Shaw (Oxfam) Louise Posocco, (RNID) Mark Walton (Every Action Counts)

41

Appendices

Appendices A. Case Studies In this guidance 1. The National Communities Resource Centre and integrated sustainability 2. Herefordshire Voluntary Action alter their travel modes 3. Diana, Princess of Wales Memorial Fund on waste management 4. Bryncynon Strategy and their Environmental Management System 5. Arcola Theatre do energy-saving 6. RSPB work on their travel 7. Cancer Research UK and sustainable procurement 8. Artsadmin, environmental management and water 9. RNID – working with our employees 10. CFDG and sustainability 11. BT and the value of sustainability reporting 12. Ethical Property Company – delivering on our promises 13. The Church Commissioners on why and where they report 14. Oxfam, accountability and using the GRI G3 guidelines

9 11 13 19 21 22 23 24 25 26 32 35 37 40

Other sources of case studies • Every Action Counts: www.everyactioncounts.org.uk/en/fe/page.asp?n1=230&n2=6 • Global Action Plan: www.globalactionplan.org.uk/SMECasestudy.aspx • Business in the Community: www.bitc.org.uk/resources/case_studies/index.html

B. Sustainability Actions All actions should be underpinned by engagement and consultation with staff in the charity, as laid out in the chapter ‘Reporting on sustainability’. Judging staff engagement with sustainability will be key in reviewing progress. You may wish to make staff engagement an action in itself, with defined targets. For actions that have an approximately equal value in two different areas, such as energy and procurement, this has been indicated in italics in brackets after the action. Evidently there is a lot of cross-over between environmental and social actions, but this is so dependent on the circumstances of individual charities that we have not indicated it here. The actions listed here are accumulated from a number of different sources: • Better Business Journey, Small Business Journey, www.smallbusinessjourney.com/PublicationsPage.asp • Changing the Way We Work, Every Action Counts, www.everyactioncounts.org.uk/guides/greenofficev1.pdf • Charity Sector Overview: energy saving opportunities for charitable organisations, Carbon Trust, www.carbontrust.co.uk/publications • “Conserving water in your business”, Environment Agency, www.environment-agency.gov.uk/business/topics/water/32070.aspx • “Greening the Office”, Friends of the Earth, www.green-office.org.uk/audit.php • Greening the Third Sector, City Bridge Trust www.bridgehousegrants.org.uk/CityBridgeTrust/Publications • How to ‘green’ your workplace, Trade Unions Congress, www.tuc.org.uk/extras/greenworkplace.pdf • One Planet Living Sustainability Action Plan for small businesses, BioRegional Development Group, www.bioregional.com/take_action/take_action_bus.htm

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Appendices

Environmental Energy Reduce energy use

General

Heating and cooling

Lighting

Use efficient equipment

General

Heating and cooling Lighting Kitchen Green your energy

Equipment and appliances: make sure equipment and appliances are only turned on when needed and that they are turned off at the end of the day and when staff are away from their desks for lengthy periods; provide all staff with simple guidelines for using equipment (waste). Put up 'turn off' notices near appliances that use energy. Do not boil kettles with more water than necessary (energy). Check for damp and condensation at least once a year. Ensure that equipment is labelled with its energy-use rating. Keep all systems and filters clean and maintained; carry out regular building maintenance, including window panes and frames, roof lights and doors. Monitor electricity and gas bills to identify savings. Advanced: start considering the ‘embodied’ energy used in the production and transportation of items purchased, such as food and building materials (see: www.bioregional-reclaimed.com). Only turn on heating and air-conditioning when they are needed. Use natural ventilation from windows and doors to cool and ventilate a building, but not when the heating is on. Don't use heating and air-conditioning at the same time; there should be a band without heating or cooling between 19ºC and 24ºC. Turn your thermostat down – offices should be heated to no more than 19ºC and cooled no lower than 24ºC. Cool fridges no lower than 3-4ºC. Check draft-proofing, insulation in roofs and cavity walls, and insulation on boilers, tanks and pipes. Consider specifying triple glazing for new buildings and refurbishment. Use natural light where possible, and install daylight sensors to turn off artificial lights automatically when there is enough daylight. Turn off lights when they are not needed. Put up 'turn off' notices near lights. Make sure horizontal blinds or external shading directs lights onto walls and ceilings, not workstations. Advanced: Install motion-sensitive lights. Equipment and appliances: install efficient office equipment and appliances, with high energy-efficiency ratings; install flat screen monitors for all computers; use auto-timers/ 7-day timers to regulate the energy-use of equipment and appliances, and set to energy-saving settings; consider auto power-down after working hours; use sleep mode not screen savers on computers. Make sure equipment is correctly maintained. Put heat-emitting equipment in cold places. Install efficient heating and cooling systems, with high energy-efficiency ratings. Advanced: install a combined heat and power (CHP) system. Install energy-efficient lighting, with high energy-efficiency ratings. Install efficient kitchen appliances, with high energy-efficiency ratings. Switch to a green energy supplier. Switch to a service provider who offsets their carbon. Consider engaging a broker for your energy supplies, which can result in a saving over and above any extra cost of moving to green energy. Advanced: install microgeneration devices (photovoltaic panels, solar heating, and wind turbines).

43

Appendices

Waste Reduce

Paper

Reuse

Paper

Other materials

Recycle

General

Waste management

General

Make all documents electronic where possible: reports can be emailed and put on a website for downloading rather than/ alongside being printed and sent; prioritise email (and telephone) over printed letters; incoming and outgoing invoices can be emailed. Print only when you need to, and print faxes straight to pdf. Provide all staff with simple guidelines for how and when to use the printer and photocopier, to reduce mistakes and waste paper (energy). Set printers and photocopiers to automatic double-sided (duplex), black and white printing; consider automatically printing two pages per side if readers are comfortable with the resulting print size. Move to low-impact printing, e.g. using less ink. Use scrap paper for printing drafts and internal documents, and consider using scrap paper to make notepads for staff; put a box for scrap paper next to the printer. Reuse packaging materials. Hire or share infrequently-used equipment with other organisations (procurement). Donate unwanted equipment and furniture to reuse companies. Order milk in returnable glass bottles (procurement). Use refillable products (e.g. ink cartridges, cleaning products) (procurement). Avoid buying non-recyclable materials; use ceramic cups and plates instead of plastic ones (procurement). Set up office recycling for paper, cardboard, plastic, tins, cans and glass; recycling bins should be near workstations and it must be clear to staff what products can be recycled and where. Many local authorities provide a free recycling collection service for charities, but you will need to check with the Waste Management Team/ Recycling Officer at your local authority. Investigate possibilities for recycling other products: toner cartridges (if not refilled), CDs, batteries, equipment. Provide a composting area/ wormery for organic waste. Advanced: implement a waste management system (see measuring to manage: a how to guide (GG707): http://www.envirowise.gov.uk/uk/Our-Services/Publications/GG707Measuring-to-manage-a-how-to-guide.html

Transport Reduce the need to travel Reduce the impact of travelling

General

Public transport

Cycling

44

Provide for home-working where appropriate, e.g. by providing laptops, remote access, and possibly an internet connection. Install teleconferencing facilities, and provide training for all staff. Institute a policy to promote the use of public transport for business purposes. Consider providing all staff with a public transport pack with prices and times of public transport available for travelling to work and on work business. Publicise public transport options to all attendees for external meetings. Hold meetings where they are public transport accessible. Offer interest-free loans for public transport season tickets. Provide secure cycle parking. Provide showers and clothes lockers. Sign up to the cycle to work scheme (for preference), or provide interest-free loans for bikes and essential accessories. Provide a mileage allowance for bicycling for business travel. Buy a communal bike for short journeys, and link up with a local bike shop for free/ reduced maintenance. Look at free training and maintenance events.

Appendices

On foot

Car use Car fleets

Air travel

Transport mode Plane Car Bus Rail Underground Tram/ light railway Walking and cycling

Set up an equipment pool of lights, reflective clothing and accessories. Put up a cycling notice board detailing routes, bike repairers and cycling organisations. Promote walking to meetings under half an hour’s walk away. Promote the benefits of walking to work for those who travel short distances by car. Reduce taxi/ courier use, and use bicycle couriers where possible. Promote car sharing/ pooling. Encourage good driving techniques, which can reduce fuel consumption by as much as 25%. Buy ‘green’ cars for your fleet, if you have one. endnote i Consider converting existing vehicles to use Liquid Petroleum Gas. Ensure regular maintenance to maintain fuel efficiency and vehicle longevity. Use rail instead of air where possible.

g CO2/ passenger km 105 (long haul) – 158 (short haul) 110 80 60 50 50 0

Source: www.london.gov.uk/mayor/environment/climate-change/docs/ccap_chapter4.pdf

Water Reduce

General

Reuse Water quality

General General

Provide information for staff on the importance and practises of water efficiency. Make sure all appliances and equipment that use water are as water-efficient as possible, and are well maintained. Mend dripping taps and leaks, and make sure water pipes are protected against bursting in cold weather. Put up 'turn off' notices near appliances that use water. Do not boil kettles with more water than necessary (energy). Put cistern volume reducers (‘hippos’) in toilets. Put water-saving devices in urinals. Install dual-flush toilets. Install spray taps. Monitor water bills to identify savings, and check water metres at night/ when no water is being used to identify any leakages. Capture rain water for watering plants. Use non-toxic cleaning products (biodiversity, procurement). Remove bottled water dispensers and provide tap water for meetings (procurement). Advanced: Use non-toxic, lead- and emissions-free paint (biodiversity, procurement). Advanced: Use biodegradable inks (procurement).

45

Appendices

Procurement Specifying standards

Policy

General

Paper

Publications

Plastic Financial Working with suppliers

46

General

Create a sustainable procurement policy, with guidelines on product standards and staff procedures for purchasing. Suppliers should be aware of your work and the values that accompany it, and this understanding can be used to persuade suppliers to work with and adopt your criteria. Standards should involve at least a commitment to human rights, decent working conditions, living wages and basic standards of environmental protection along the supply chain (CFDG’s policy is available to view on our website (www.cfdg.org.uk/cfdg/influencing_sustainability.asp), and other examples are available on CFDG’s document library (www.cfdg.org.uk/crn/doc_search.asp)). All products should be of the highest environmental standards where economically feasible. In general this means that products should: • Be as energy- and water-efficient as possible • Be reused or recycled • Be made of reusable or recyclable materials • Be locally produced • Have as long a lifespan as possible • Come from manufacturers who have an accredited Environmental Management System, typically ISO 14001 or BS 8555. Paper should be: • 100% recycled (from post-consumer waste) • Printed with biodegradable inks • Forest Stewardship Council (FSC) certifiedii Ensure that publications have high green printing standards: • Print on both sides of the paper • Use line spacing of no more than 1.5 • Lay out your publication with the minimum necessary white space • Find a printer with an accredited Environmental Management System (e.g. ISO 14001) • Print the publication on 100% recycled paper (from post-consumer waste), with biodegradable inks • Avoid using varnishes or laminates during printing • If an adhesive binding is necessary, do not use those containing chlorinated organic compound • If you send out free reports, mail a postcard or email out first, notifying your recipients that the report is available if they want it and providing the means for them to order a copy • Label your publications with relevant environmental information about how it was produced Plastic should be: • Recyclable Consider the ethical status of your banking and investments (see: www.charitysri.org) Examine supply chains (including trading subsidiaries) and engage with suppliers to improve the sustainability of supply chains, including: • Outputs (e.g. branded materials, reports) • Office suppliers, stationary and furniture • Catering • Financial services • Utilities • Building and facilities companies/ contractors • ICT companies • Travel agents Sign up to a procurement code, e.g. the Mayor of London’s Green Procurement Code

Appendices

Lifecycle assessment

General

Advanced: Introduce a formal supply chain code of conduct for all of your suppliers. Advanced: Introduce PAS 2050:2008: Specification for the assessment of the lifecycle greenhouse gas emissions of goods and services.

Biodiversity Promote biodiversity Protect biodiversity

Plants Wildlife Purchasing

Grow flowering and fruiting plants in the office or in outdoor spaces Grow plants that attract butterflies and/ or birds Put out food and water for birds Buy non-toxic cleaning products (water, procurement) Buy non-toxic, lead- and emissions-free paint (water, procurement) Buy organic food (procurement)

Social As discussed in the chapter Reporting on Sustainability, in the section on legislation, there are more legal requirements for charities surrounding their dealings with people than there are around environmental issues. Legal compliance on social issues is essential, but outside the scope of this guidance. However, there is a still significant scope for improving practice above and beyond legal requirements.

Supporters Donors

Volunteers

Develop a policy or code of practice for the charity’s relations with donors. This should reflect key social sustainability principles, the need to develop good relationships with donors, and the charity’s own values. Read the Institute of Fundraising’s Codes of Fundraising Practice. Develop a code for working with volunteers, including consultation with volunteers themselves. Research volunteer practice at Volunteering England’s Good Practice Bank: www.volunteering.org.uk/Resources/goodpracticebank

Employees Equality and diversity

Working conditions

Ensure that you have a policy of equality, regardless of disability, race, gender, faith, sexual orientation or age. Recruit locally and from diverse social and ethnic backgrounds; advertise jobs in nontraditional places. Ensure that part-time staff have the opportunity to take up their employment rights, which are the same as those of full-time staff. Support parents, with maternity and paternity benefits above the statutory minimum. Ensure that all premises are disabled-accessible. Work towards the Investor in Diversity Standard. Ensure that your website is accessible to all. Introduce flexible working (e.g. core hours, a time off in lieu (TOIL) policy, job sharing, sabbaticals, home working, reduced time). Ensure that all staff have access to a union and the right to collective bargaining. Ensure that there is a clear and accessible complaints procedure for all staff (and indeed all stakeholders). Provide the correct equipment and provide training on its use. Encourage a quiet office atmosphere with screens between desks where appropriate, and a policy of quiet ringtones.

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Staff development Consultation

Ethics and remuneration

Community Involvement

Offer reduced gym membership. Promote local running and cycling routes. Put plants in the office. Build skills assessment and development into staff appraisals. Develop an active plan of skills development and skills sharing for staff. Work towards the Investors in Volunteers award. Consult employees on new and re-approved organisational policies, and on the development of the charity. Create an employee handbook for new staff on ‘how we work’. Consider offering ethical options for staff pensions. Consider setting up payroll giving in your office, and advise staff on the benefits and process for payroll giving. Consider showing wage transparency. Set a maximum wage multiplier between the highest and lowest paid staff members, referenced against sector norms. Ensure that all staff are paid a living wage, including auxiliary staff. Allow your staff one or two days a year to volunteer. Plan staff away days or events to benefit a community and involve voluntary work as well as team-building and bonding. Work towards the Investing in Volunteers for Employers award. Offer quality work experience for local schools/ colleges. Promote cultural awareness in all projects.

Funders Consult with funders Manage the relationship with funders

Regard your funders as stakeholders and consult with them as and when appropriate. Nominate an appropriate person to manage the relationship with each funder, to provide the funder with a single point of contact in the charity, and to give one staff member responsibility for managing the relationship and any reporting requirements. Ensure a good handover if the nominated staff member leaves and another person takes over managing the funder relationship. Keep records of relationships with all funders.

C. Carrying out a Sustainability Audit Carrying out a sustainability audit will allow you to identify exactly what kind of impacts you have and the timing and scale of the action you need to take. You can get a consultant in to do an audit for you, or you can do it inhouse. 1. Review your organisation’s sustainability impacts Look at each impact area and estimate your impact(s) as accurately as possible. Focus initially on the key areas: energy, waste, transport, water, procurement, biodiversity; stakeholder engagement, supporters, employees, and funders. Where to look for information on your organisation’s performance: Impact area Current procedures Energy (gas and electricity) Waste

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Where to find the information Operating procedures and information on process and operations Bills and meter readings Waste disposal and waste recycling records,

Units measured in N/A kWh/ m2 Tonnes/ year

Appendices

Recycling rate Water Travel Resources Procurement Staff behaviour Employment practices Staff contentment Stakeholder engagement Funder satisfaction Legal compliance

contractor bills and counting up bags Recycling/ total waste records Water bills Expenses and travel agent information Supplier invoices Supplier analysis and supplier check lists Spot checks or questionnaires Organisational policies, staff handbook Staff turnover Individual appraisals Surveys Number and length of funding agreements Regulatory consents, authorisations and permits

% rate m3 CO2 emissions Reams/ year etc. N/A % PCs left on overnight, recycling rate etc. N/A Annual figures Verbal comments Verbal comments Verbal comments N/A

You may wish to convert all your environmental impacts into their carbon equivalent. Defra provide a useful list of conversion factors for measuring impacts in carbon: www.defra.gov.uk/environment/business/reporting/conversion-factors.htm Social impacts are more difficult to measure than environmental impacts and will inevitably require some qualitative measurement, e.g. are staff content, does the local community value the charity, do they feel it benefits them? Social impacts will vary more widely from charity to charity than environmental impacts, so it is necessary to devise an auditing process suitable to the nature and mission of each individual charity. For more detailed information on social audit, see the website of the Social Audit Network: www.socialauditnetwork.org.uk.

2. Assess the significance of your impacts Next you will need to assess the significance of the impacts you have identified, in order to prioritise your action and structure your sustainability management plan. Envirowise suggest that assessment does not have to include every last product or raw material used by your charity, but you should consider categories of activities, products or services most likely to have significant impacts. Your assessment should consider normal working conditions, as well as foreseeable emergencies. Impacts - and this pertains to environmental and social impacts - should be considered significant if they are: a) controlled by legislation b) have the potential to cause demonstrable damage to the environment or harm to people c) are of concern to stakeholders In addition you should consider: a) the scale of the impact b) the severity of the impact c) the probability of occurrence (not always relevant) d) the duration of impact e) the potential regulatory and legal exposure f) the difficulty and cost of changing the impact g) the concerns of stakeholders h) the effect on the organisation’s reputationiii

3. Carbon footprinting The Carbon Trust defines a carbon footprint as: ‘the total set of greenhouse gas emissions caused directly and indirectly by an [individual, event, organisation, product] expressed as CO2 emissions.’iv You may wish to do a carbon footprint to give yourself a single target figure for reductions, although this is not necessary. Carbon footprinting is a useful tool for establishing an overall figure of environmental impact, against

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which it is easy to plan reductions and publicise achievements. They are established by multiplying the amount of a resource used, e.g. 1,000 kWh of electricity, by its conversion factor, which for electricity is 0.52. Measuring your environmental impact via carbon is a useful measure, but simply converting some environmental actions into their equivalent C02 focuses all action towards climate change. Whilst this is of course of prime importance, a more holistic view of sustainability is in the end more helpful, and generally more relevant to charities. See also: • Carbon footprinting tool: www.carbontrust.co.uk • Business Link provides useful advice on various environmental assessment techniques: www.businesslink.gov.uk (Environment and efficiency > Sustainability in business > How to use environmental assessment techniques)

D. Management Approaches The full copy of the Green Dragon Environmental Standard, which is available by contacting them, contains a very useful appendix which shows how the Green Dragon Standard, the British Standard 8555 (on which the Acorn Scheme is based), ISO 14001 and EMAS relate to one another.

PQASSO www.ces-vol.org.uk PQASSO is the Practical Quality Assurance System for Small Organisations. It is a straightforward, user-friendly quality system intended to help organisations to run more effectively and efficiently. It is built around twelve topics or quality areas, offering a flexible approach to quality that allows organisations to work at their own pace. PQASSO has been recently updated and its new 3rd edition has a greater focus on environmental and sustainability issues.

Changing the way we work www.everyactioncounts.org.uk/guides/greenofficev1.pdf Every Action Counts is a programme that ‘provides advice and support to voluntary and community organisations which are looking to reduce their impact on the environment, tackle climate change and improve their local area.’v They published a guide called ‘Changing the Way We Work’ in 2008 which addresses the environmental impacts of voluntary and community organisations under the headings of: • Energy and climate change • Waste and resources • Shopping ethically and procurement • Travelling wisely • Caring for where you live and work • Saving water The guide looks at: • why organisations should take action • how environmental impacts relate to the VCS • how to involve your organisation and developing a sustainability action plan • how to take action • further sources of information

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One Planet Living www.oneplanetliving.org One Planet Living (OPL) is an expression of how to be sustainable: if globally we live within the resources of our single planet without compromising the ability of future generations to do the same, then we will be sustainable. OPL, which was developed by the BioRegional Development Group and WWF (UK), takes a holistic view of how to achieve sustainability by addressing areas of environmental impact alongside community involvement. OPL is founded on the belief that whilst human society has directly caused much environmental degradation, society also holds the key to rectifying those problems. In particular, OPL is founded on a belief that strong communities are founded on a sense of social and environmental responsibility. OPL is set out in ten key, interrelated principles, around which actions are grouped: 1. 2. 3.

Zero Carbon Zero Waste Sustainable Transport

4.

Local and Sustainable Materials Local and Sustainable Food Sustainable Water Natural Habitats and Wildlife Culture and Heritage Equity and Fairtrade Health and Happiness

5. 6. 7. 8. 9. 10.

Achieve net CO2 emissions of zero Eliminate waste flows to landfill and for incineration Reduce reliance on private vehicles and achieve major reductions of CO2 emissions from transport Transform materials supply to the point where it has a net positive impact on the environment and local economy Transform food supply to the point where it has a net positive impact on the environment, local economy and peoples' well-being Achieve a positive impact on local water resources and supply Regenerate degraded environments and halt biodiversity loss Protect and build on local cultural heritage and diversity Ensure a positive impact on other communities Increase health and quality of life of community members and others

BioRegional Development Group have also developed a template Sustainability Action Plan (SAP) for small businesses: www.bioregional.com/take_action/take_action_bus.htm. This provides a wide range of actions in each of the ten areas shown above.

Green Dragon Environmental Standard www.greendragonems.com The Green Dragon Environmental Standard is a staged Environmental Management System (EMS), which gives organisations a manageable way to implement an EMS at the level that suits their organisation. There are five levels in the scheme, each of which leads to a UKAS (United Kingdom Accreditation Service) accredited EMS. Level four of the scheme puts organisations at the right level to apply for ISO14001 (see below) and level five enables application to EMAS (see below). The standard incorporates five key principles: 1. 2. 3. 4. 5.

Continual environmental improvement Compliance with environmental legislation Prevention of pollution Communication of environmental issues Environmental Management systems principles a. Planning b. Taking action c. Checking progress d. Reviewing achievements

For a full copy of the standard, see the Green Dragon Standard website. The full copy includes not only detail on the principles and different levels, but a useful appendix showing how the requirements of the standard relate to ISO14001, BS 8555 (on which the Acorn Scheme is based) and EMAS.

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The Acorn Scheme www.iema.net/ems/acorn_scheme The Institute of Environmental Management & Assessment (IEMA) Acorn Scheme is an officially recognised EMS standard recommended by the government. It offers a convenient step by step approach to environmental management using the British Standard BS8555.vi Acorn breaks EMS implementation down into a series of five logical, pragmatic phases. Each phase is further subdivided into a number of individual stage profiles which correspond to the Acorn achievement criteria. On completion of all five phases an organisation has a functional EMS. A further phase (phase six) is available for organisations wishing to progress to ISO 14001 or EMAS. The Acorn scheme is particularly flexible because it is structured to accommodate all types of organisation, a flexibility that is aided by a self-determined time frame for implementation and a linking of environmental improvements to ‘business’ competitiveness.

The Acorn Scheme phases

ISO 14001 www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000 The International Standardisation Organisation (ISO) created the 14000 environmental management standards, which are now the most rigorous and widely used standards across the globe for environmental management. ISO 140001 provides the requirements for an EMS, which means providing ‘a framework for a holistic, strategic approach to an organisation’s environmental policy, plans and actions.’vii ISO 14001:2004 ‘gives the generic requirements for an environmental management system. The underlying philosophy is that whatever the organisation's activity, the requirements of an effective EMS are the same… Because ISO 14001:2004 does not lay down levels of environmental performance, the standard can to be implemented by a wide variety of organisations, whatever their current level of environmental maturity. However, a commitment to compliance with applicable environmental legislation and regulations is required, along with a commitment to continual improvement – for which the EMS provides the framework.’viii

Eco-management and audit scheme www.iema.net/ems/emas http://ec.europa.eu/environment/emas/toolkit/ The Eco-management and audit scheme (EMAS) is a voluntary initiative designed to improve organisations’ environmental performance, through evaluation, reporting and continuous improvement. Since 2001 EMAS has required the EMS used to be ISO 14001; many organisations progress from ISO 14001 to EMAS and maintain certification to both.

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Small and medium-sized enterprises (those with less than 250 employees) are encouraged to enter the scheme. ‘Some deviations from the EMAS requirements to avoid administrative burden are allowed… to encourage higher participation in the scheme.’ix To receive EMAS registration an organisation must comply with the following steps: 1. Conduct an environmental review considering all environmental aspects of the organisation’s activities, products and services, methods to assess these, its legal and regulatory framework and existing environmental management practices and procedures. 2. In the light of the results of the review, establish an effective environmental management system aimed at achieving the organisation’s environmental policy defined by the top management. The management system needs to set responsibilities, objectives, means, operational procedures, training needs, monitoring and communication systems. 3. Carry out an environmental audit assessing in particular the management system in place and conformity with the organisation’s policy and programme as well as compliance with relevant environmental regulatory requirements. 4. Provide a statement of its environmental performance which lays down the results achieved against the environmental objectives and the future steps to be undertaken in order to continuously improve the organisation’s environmental performance.

E. Key Performance Indicators Global Reporting Initiative (GRI) Sustainability Reporting Guidelines www.globalreporting.org • • • • • • • • • • • •

Materials Energy Water Emissions, effluents and waste Biodiversity Products and services Compliance Transport Labour practices and decent work Human rights Society Product responsibility

Envirowise KPIs for specific sectors www.envirowise.gov.uk • Electronics • Food and Drink • Furniture • Hospitality • Packaging • Printing • Surface Finishing • Transport • Whiteware

Defra Environmental Key Performance Indicators: Reporting Guidelines for UK Business www.defra.gov.uk/environment • Emissions to air o Greenhouse gases o Acid Rain, Eutrophication and Smog Precursors o Dust and particles o Ozone Depleting Substances o Volatile Organic Compounds o Metal emissions to air • Emissions to water o Nutrients and organic pollutants o Metal emissions to water • Emissions to land o Pesticides and fertilisers o Metal emissions to land o Acids and organic pollutants o Waste (landfill, incinerated, recycled) o Radioactive waste • Resource use o Water use and abstraction o Natural gas o Oil o Metals o Coal o Minerals o Aggregates o Forestry o Agriculture

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Appendices

Global Compact Principles www.unglobalcompact.org/AboutTheGC • • • •

Human rights Labour standards Environment Anti-Corruption

F. Useful Links By topic General • Business Link: www.businesslink.gov.uk • Business in the Community: www.bitc.org.uk • Charity Commission, The: www.charity-commission.gov.uk • Charities Facilities Management Group: www.upkeep.org.uk/cfmg • City Bridge Trust: Greening the Third Sector: www.bridgehousegrants.org.uk/CityBridgeTrust/P ublications/ • Department for Environment, Food and Rural Affairs, The (Defra): www.defra.gov.uk/environment • Direct.gov: www.direct.gov.uk/en/Environmentandgreenerlivi ng/index.htm • Environment Agency, The: www.environment-agency.gov.uk • Every Action Counts: www.everyactioncounts.org.uk • Friends of the Earth: www.green-office.org.uk/audit.php www.foe.org.uk/living/index.html • ICAEW: Sustainability: www.icaew.com/sustainability • London Sustainability Exchange: www.lsx.org.uk/resources/voluntarycommunityfait h_page2791.aspx • Small Business Journey: www.smallbusinessjourney.com • SustainAbility: www.sustainability.com • Sustainability at Work: www.sustainabilityatwork.org.uk • Sustainable Development Commission, The: www.sdcommission.org.uk/pages/forbusiness.html • UK Green Building Council, Organisational measurement and reporting (aimed at a different sector, but still very useful): www.ukgbc.org

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Energy • Carbon Trust: Charity Sector Overview: energy saving opportunities for charitable organisations: www.carbontrust.co.uk/publications • Consumer Direct: www.consumerdirect.gov.uk • Energy Helpline, The: www.energyhelpline.com • Energy Saving Trust: www.energysavingtrust.org.uk • Energy Star: www.energystar.gov • Envirowise: www.envirowise.gov.uk • Friends of the Earth: www.green-office.org.uk/audit.php www.foe.org.uk/living/index.html • One Planet Living: www.oneplanetliving.org • Renewable Energy Association, The: www.r-e-a.net • Sustainability at Work: www.sustainabilityatwork.org.uk

Waste • Bioregional Reclaimed: www.bioregional-reclaimed.com • Environment Agency, The: www.environment-agency.gov.uk • Envirowise: www.envirowise.gov.uk (waste management) www.envirowise.gov.uk/uk/waste.html www.envirowise.gov.uk/uk/Recycling.html • Friends of the Earth: www.greenoffice.org.uk/audit.php?goingto=factsheet2 • Recycle now: www.recyclenow.com • Waste and Resources Action Programme: www.wrap.org.uk/businesses/index.html • Waste Online: www.wasteonline.org.uk • Waste Watch: www.wastewatch.org.uk • Waterwise: www.waterwise.org.uk

Appendices

Transport • Cycle to work: www.dft.gov.uk/pgr/sustainable/cycling/cycletowo rkschemeimplementat5732 • Department for Transport: www.dft.gov.uk/pgr/sustainable • Efficient driving: http://campaigns.direct.gov.uk/actonco2/home/on -the-move/driving-your-car.html • London car clubs: www.tfl.gov.uk/roadusers/smarterdriving/7549.as px • Liftshare: www.liftshare.com • What Green Car: www.whatgreencar.com Water • Envirowise: www.envirowise.gov.uk/water • Environment Agency, The: www.environment-agency.gov.uk • Waterwise: www.waterwise.org.uk Procurement • BioRegional Reclaimed: www.bioregional-reclaimed.com • Charities Facilities Management Group: www.upkeep.org.uk/cfmg • Charity SRI (Socially Responsible Investment): www.charitysri.org • Ethical Trading Initiative: www.ethicaltrade.org • Friends of the Earth: www.greenoffice.org.uk/audit.php?goingto=directory • In Kind Direct: www.inkinddirect.org • Lifecycle assessment: BSI Publicly Available Standard (PAS) 2050:2008: www.bsigroup.com/en/Standards-andPublications/Industry-Sectors/Energy/PAS-2050/ • Mayor of London’s Green Procurement code, The: www.greenprocurementcode.co.uk o Product directory: www.greenprocurementcodedirectory.co.uk

Biodiversity • Butterfly Conservation: www.butterflyconservation.org/downloads/48/gardening.html • Defra: www.defra.gov.uk/wildlifecountryside/biodiversity • Garden Organic: www.gardenorganic.org.uk • Local environmental records centre and local biodiversity action plans: www.ukbap.org.uk/GenPageText.aspx?id=57 • RSPB: www.rspb.org.uk • Soil Association, The (on organic food): www.soilassociation.org/web/sa/psweb.nsf/A4/in dex.html • UK Biodiversity Action Plan: www.ukbap.org.uk

Legislation • NetRegs: www.netregs.gov.uk Environmental management • Acorn Scheme, The: www.iema.net/acorn/acornhome • Eco-Management and Audit Scheme (EMAS): www.emas.org.uk • Changing the way we work: www.everyactioncounts.org.uk/guides/greenoffic ev1.pdf • Green Dragon Environmental Standard: www.greendragonems.com • International Organisation for Standardisation: www.iso.org/iso/iso_catalogue/management_sta ndards/iso_9000_iso_14000 • One Planet Living: www.oneplanetliving.org

Accounting and reporting: • ACCA, Sustainability and the Accountant: http://uk.accaglobal.com/uk/members/publication s/gbs/ • Accounting for Sustainability: www.accountingforsustainability.org • Centre for Social and Environmental Accounting Research: www.st-andrews.ac.uk/~csearweb • Fédération des Experts Comptables Européens (FEE): Our work > Sustainability: www.fee.be • Greenhouse Gas Protocol, The: www.ghgprotocol.org • Government financial reporting manual: www.financialreporting.gov.uk/Sustainability_Reporting.htm • ICAEW, Sustainability: the role of accountants: www.icaew.com • IFAC Sustainability Framework: http://web.ifac.org/sustainabilityframework/overview

Assurance standards: • AA 1000 Assurance Standard, AccountAbility: www.accountability21.net • ISAE 3000, International Auditing and Assurance Standards Board: www.ifac.org/IAASB • GRI Guidelines: www.globalreporting.org Social sustainability: • Business Link (Employing people > Employing different types of worker > Employing older workers): www.businesslink.gov.uk • Chartered Institute of Personnel and Development, The: www.cipd.co.uk • Employers forum on disability: www.employers-forum.co.uk

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• Ethical Trading Initiative: www.ethicaltrade.org • Equality and Human Rights Commission, The: www.equalityhumanrights.com • Institute of Directors, The: www.iod.com • Institute of Fundraising, Codes of Practice: www.institute-of-fundraising.org.uk/bestpractice • International Labour Organisation: www.ilo.org • Investors in Diversity: www.nationalcentrefordiversity.com/iid • Investors in People: www.investorsinpeople.co.uk • Investors in Volunteers (quality mark): http://iiv.investinginvolunteers.org.uk • Investors in Volunteers for Employers (quality mark): http://iive.investinginvolunteers.org.uk • National Centre for Diversity: www.nationalcentrefordiversity.com • Stonewall: www.stonewall.org.uk • Trade Unions Congress (TUC): www.tuc.org.uk • Work Foundation, The: www.theworkfoundation.com/difference/e4wlb.as px • Workforce Hub: www.ukworkforcehub.org.uk

Funding and assistance This is very brief list of a few places where you can get more help with funding environmental improvements. There will be more, and more local and regional organisations you can also apply to. • Business Link > Grants and Support Directory: www.businesslink.gov.uk • Carbon Trust: www.carbontrust.co.uk • Global Action Plan provides a wide range of environmental support for all organisations: www.globalactionplan.org.uk/SME.aspx • Green Grants Machine: www.greengrantsmachine.co.uk • Low Carbon Buildings Programme: www.berr.gov.uk/energy/environment/etf/lcbp/pa ge30472.html • Waste and Resources Action Programme: www.wrap.org.uk/wrap_corporate/funding/index.h tml

G. Bibliography A Guide to Producing IDB Biodiversity Action Plans, ada, Defra, Natural England, www.defra.gov.uk/environ/fcd/policy/idbrev/idbbapgu idance.pdf A Consumer’s Guide to Retail Carbon Offsets, Clean Air, Cool Planet, www.cleanaircoolplanet.org/ConsumersGuidetoCarbonOffsets.pdf Accounting for Sustainability, Accounting for Sustainability, www.accountingforsustainability.org/output/Page146 .asp (Phase II) Environmental Key Performance Indicators: Reporting Guidelines for UK Business, Defra, Trucost, www.defra.gov.uk/environment/business/reporting/p df/envkpi-guidelines.pdf Going Green: Charities and Environmental Responsibility, The Charity Commission, www.charitycommission.gov.uk/publications/rs17.asp Losing Ground, Friends of the Earth, Sawit Watch and LifeMosaic, www.foe.co.uk/resource/reports/losinggroundsummary.pdf Organisational measurement and reporting, UK Green Building Council,

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www.ukgbc.org/site/resources/showResourceDetails ?id=217 Our Common Future, World Commission on Environment and Development www.worldinbalance.net/agreements/1987brundtland.php Reporting Statement: Operating and Financial Review, Accounting Standards Board, www.frc.org.uk/images/uploaded/documents/Reporti ng%20Statements%20OFR%20web.pdf Sustainability Reporting Guidelines, Global Reporting Initiative, www.globalreporting.org/ReportingFramework/Repo rtingFrameworkDownloads The Greenhouse Gas Protocol: A Corporate Reporting and Accounting Standard, revised edition, World Business Council for Sustainability Development, World Resources Institute, www.ghgprotocol.org/standards/corporate-standard The Living Planet Report, WWF, www.panda.org/news_facts/publications The Materiality Report: Aligning Strategy, Performance and Reporting, A Briefing, AccountAbility, BT, LRQA, www.resourcesaver.org/file/toolmanager/CustomO1 6C45F75795.pdf

Endnotes i

This will reduce your C02 emissions, reduce your fuel costs, reduce the NICs payable on company car benefit tax (since these are linked to cars’ C02 emissions) and improve your cashflow (since from 2009 allowances will be linked to car C02 emissions). The NICs payable are worked out by multiplying the cash equivalent of car and fuel benefits with the Class 1A NICs percentage rate. The percentage rate increases with the approved C02 emissions of the car, www.hmrc.gov.uk/guidance/ca33.pdf ii This is least favoured option because it means it is still virgin rather than recycled paper, although it comes from sustainably managed forests; paradoxically recycled paper can occasionally be FSC certified if the chain of manufacturers (mill, paper-makers, printing company etc. all have FSC certification). iii www.envirowise.gov.uk iv

www.carbontrust.co.uk/solutions/CarbonFootprinting/what_is_a_c arbon_footprint.htm v www.everyactioncounts.org.uk/ vi BS 8555: guide to the phased implementation of an environmental management system including the use of environmental performance evaluation. vii

www.iso.org/iso/iso_catalogue/management_standards/iso_9000 _iso_14000/iso_14000_essentials.htm viii Ibid. ix EMAS website: http://ec.europa.eu/environment/emas/about/participate/index_en. htm

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