ESG Investing and Economic Uncertainty for Charities

Mar 20, 2023
Author: Simon Bladen
Simon is one of the firm's Audit Partners. Simon is responsible for looking after the firm’s legal, charitable and not-for-profit clients.
ESG investing and economic uncertainty

Investec’s 2022 charities conference has delved into how current economic uncertainty has affected ESG investing. At the conference back in September, experts and charity representatives discussed environmental, social and governance (ESG) investing in an era of economic uncertainty.


Economic change

Over the past 12 months we have seen a huge amount of change in the economy. The invasion of Ukraine has altered the political climate and has changed the conversation around climate change. Many countries are over still reliant on Russian energy and these countries are now looking to become less reliant.

Charity trustees are currently looking at how they can maximise investments that meet their charitable goals. But with the current economic climate, there is no one solution fits all to the challenges ahead so collaboration and communication across the sector will be key.


Economic concern

Research conducted by the Charities Aid Foundation and the Institute of Chartered Accountants in England and Wales in early 2022 found that charities were concerned about financial resilience, diversity, climate change, sustainability and digital fundraising. Arguably, we are now in more challenging economic times than during Covid-19 so it is more important than ever that charities have the ability to focus on their goals towards responsible investing, sustainability and climate change.


What should ESG investors focus on during times of uncertainty?

We are currently in times of political and economic uncertainty, is it time for investors to review their ESG investing strategy? Often when investing in ESG, organisations tend to prioritise tackling environmental issues over social or governance issues as this is seen as the most pressing issue to tackle. But is now the time to increase focus on tackling social and governance issues?

Tackling social issues involves ensuring that equality and fairness are at the heart of an organisation and that you are impacting the wider society and workplace culture in a positive manner. This is key to building trust within your organisation and between other organisations.

Investing in governance is reviewing how decisions are made within your organisation when it comes to environmental and social issues. Reviewing your governance on a regular basis could help organisations make better decisions when it comes to environmental and social issues.


Charity leadership in ESG

The charity sector reflects all that is positive in society and are natural leaders when it comes to ESG which carries a huge weight of responsibility. The charity sector is doing great work particularly through these difficult times. The charity sector as a whole should continue to push their ESG agendas as they have the passion and the knowledge of what is happening globally when it comes to ESG. Pushing these agendas and sharing this knowledge will help all organisations within the financial ecosystem act positively towards ESG.


How can we help?

At Hawsons our accountants recognise that not-for-profit organisations have very different requirements from other businesses and are currently exposed to a challenging economic climate.

Our dedicated team of charity accountants fully understands the complex, ever-changing regulatory requirements of the charity and not-for-profit sector. Irrespective of your size we wish to support you to maximise the benefits you could achieve through our specialist professional advice.

Charities & not-for-profit organisations are currently facing extensive changes in their regulatory and legal framework. Given the additional pressures on fundraising, complex tax regimes, internal risk exposure, and stakeholder demands, it has never been more important to obtain specialist professional advice.

More from our charity experts

You can find all of our latest charity sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Simon Bladen


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