ESG for Non-Profit

Why ESG for Non-Profit?

The revised Code of Governance for Charities and IPCs, effective from the financial year commencing on or after 1 January 2024, mandates the integration of ESG considerations into their operations. Which areas are to be included? Environmental responsibility, social impact, and governance practices.

Charities are expected to disclose their ESG efforts through the Governance Evaluation Checklist (GEC) submitted via the Charity Portal. This submission is publicly accessible and aims to enhance transparency and accountability within the non-profit sector.

Benefits of ESG reporting for Non-Profit

For Charities and IPCs, this is an opportunity to align their missions with responsible practices. The advantages are:

(1) build greater trust with donors, beneficiaries, and the wider community,

(2) comply with regulatory requirements,

(3) demonstrate their commitment to positive societal impact,

(4) adopting sustainable practices helps to minimize environmental impact,

(5) ensuring strong leadership and ethical management.

(6) attract like-minded donors and partners and thus ensures long-term impact and sustainability for all. 

Requirements of ESG reporting for Non-Profit

To comply with the new regulations, Charities and IPCs in Singapore must establish an ESG governance structure, outlining clear roles and responsibilities for managing ESG initiatives. They will also need to define a tailored ESG strategy that aligns with their organizational goals, ensuring transparency and accountability in their sustainability efforts.

This is a recommendation how Charities and IPCs can consider:

1. Establish ESG Governance Structure

• Form a Team

• Assign Responsibility

• Appoint ESG Champions 

• Create ESG Policies

• Board Oversight

2. Define Tailored ESG Strategy

• Assess Current Operations (All-rounded assessement, not just financials)

• Set Clear ESG Goals (Be realistic!)

• Stakeholder Engagement (Get buy-in from all stakeholders)

• Align with Mission (Re-energize the Team about your Charity's Mission)

• Resource Allocation (Getting trained in ESG is one of the best skills for the future)

3. Implementation and Monitoring

• Action Plan Development

• Data Collection and Reporting

• Training (Internal or External)

4. Periodic Review and Adjustments

• Monitor Progress

• Continuous Improvement

Here are the guides on the Focus and Actions that can be taken: