Environmental responsibility: what role should charities play? Questions and Answers

Main Document - Environmental responsibility: what role should charities play?

As expectations on all sections of society to take action to prevent climate change are growing, many charities have begun thinking about what role charities should play in improving the environmental responsibility of the way they work.  We have set out below some answers to questions charities have asked us about their environmental activities.

Q. Some measures charities can take to improve the environmental impact of their premises and the way they work may result in cost-savings.  Others might involve a substantial cost – such as fitting solar panels for example, or switching to a ‘green’ energy supplier that is more expensive than other suppliers.  Are charities allowed to spend their money in this way?

A. Yes, provided the trustees are satisfied that it is reasonable to do so and will enable them to achieve their charitable purposes effectively having considered the relevant factors. Where these measures will reduce costs for a charity (for example shutting PCs off at the end of the day, or lowering thermostats) the charity will be maximising the use of their resources, which they are required to do in any event.  Where a cost is involved, we think it’s reasonable for trustees to do this where they have balanced the additional cost of environmental measures against other factors such as benefits to their reputation and donor confidence. We would encourage charities to be aware of their wider responsibilities to society and the communities in which they work and improving the environmental impact of their premises and the way they work may be an important part of this. As long as trustees have considered the risks of each option and reached a rational decision, they are unlikely to be criticised

Q. Where can we go for more practical information on in-house measures our charity can take?

A. There are many resources charities can refer to for practical advice, including Defra (www.defra.gov.uk), Every Action Counts (www.everyactioncounts.org.uk), Carbon Trust (http://www.carbontrust.co.uk/) and Nottingham CVS (http://www.nottinghamcvs.co.uk/green/index.htm).

Q. We are thinking of moving to new premises.  What sort of environmental factors should we look for?  What if ensuring we move to new premises that are energy efficient and environmentally friendly means it is more expensive?

A. There are specialist organisations that can give good advice on building issues.  As mentioned above, if choosing an environmentally-friendly premises involves a higher cost, trustees must balance the additional cost against other factors such as benefits to their reputation and donor confidence.  It would be useful to think about other measures that could be taken, such as using ‘green’ energy suppliers and making sure the building has good insulation. 

Q. Do charities have to take environmental action?

A. No.  It is for the trustees to decide if becoming involved in environmental activities is in the best interests of the charity and the most effective way of furthering their charitable purposes.

Q. We’re a very small charity, so if we decide to spend money on in-house measures or divert resources to environmental activities as a means of furthering our objects, it’s likely that it will take up a very high proportion of our time and resources.  It’s not fair that we can’t do something to help the environment just because we can’t afford to do other things at the same time.

A. The questions for you are: how much time is likely to need to be devoted? How much is it going to cost? How effective is it going to be?  If getting involved in environmental activities is going to take up an unreasonable amount of your time and resources for the long term, not only do you have to consider if that is an effective use of your resources, but the reputational risks of getting involved or not.

Q. Our charity’s objects contain no reference to the environment. Are we allowed to promote the protection of the environment in our work, or would we be in breach of trust?

A. The law requires charities to act within their objects, which means that all of their assets have to be used to further those objects directly or indirectly.  The Commission would encourage charities to explore the full scope of their objects without acting outside them.  If challenged, trustees must be able to demonstrate, with evidence, the link between their activities and how their charitable purposes are being fulfilled.  

Q. What sort of work could we do within our objects?

A. In deciding whether or not to undertake environmental activity, trustees must apply precisely the same principles that they must apply in considering any other possible means of carrying out the charity’s purposes. It is ultimately for the trustees to decide which activities best further the charity’s objects, although the Commission can provide advice and guidance to trustees who are unsure.  Some examples of charities which do not have objects for the preservation of the environment but may nevertheless carry out environmental work which furthers their existing objects could include:

1. A charity with ‘relief of poverty’ objects delivering environmental projects because they have evidence that the effects of climate change are contributing to the poverty in certain parts of the world and that their efforts can help to reduce these effects. 
2. A charity with ‘relief of sickness’ or ‘promotion of health’ objects researching the effects of pollution on the causes of sickness, or how environmental factors affect the recovery of those with a particular illness.

Q. Our objects just do not give us any scope to get involved and we’d like to change our objects. How do we go about it?

A.  Some charities may want to take things a step further and adopt an additional environmental-related object. Unincorporated charities are likely to require a scheme from the Commission in order to change their objects and would need to satisfy the ‘cy-près’ test under section 13 of the Charities Act 1993, The amendments to the cy-près provisions introduced by the Charities Act 2006 (which are expected to come into force in February 2008) sets out that the current social and economic circumstances are appropriate matters to be considered when an unincorporated charity applies for a cy-près scheme.  The meaning of ‘social and economic circumstances’ is not defined in the Act, but it is certainly possible that environmental issues may be of relevance here.
Charitable companies must apply to the Charity Commission for consent to amend their objects under section 64 of the Charities Act 1993.  

If in any doubt about what charities can and cannot do in terms of green projects under charity law, please contact us for advice and guidance. 

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