This article was co-authored by Grace Quist-Therson, Director, Charities and NFP Team, Audit.
The charity sector is entering a new era of transparency and accountability. With the revised Charities Statement of Recommended Practice (SORP) 2026 set to take effect for accounting periods beginning on or after January 2026, sustainability reporting is no longer a peripheral consideration—it is becoming a core component of governance and financial disclosure. For larger charities, specifically those in Tier 3 (income over £15 million), the new SORP introduces enhanced requirements to report on environmental, social, and governance (ESG) matters, including climate-related risks and opportunities. This shift aligns with broader societal expectations and regulatory trends, creating a natural link between sustainability reporting and carbon accounting.
Why sustainability reporting matters under SORP
The revised SORP reflects growing pressure from funders, regulators, and the public for charities to demonstrate not only financial stewardship but also environmental responsibility. Trustees’ annual reports will now need to include disclosures on sustainability, with Tier 3 charities required—and smaller charities encouraged—to explain how they manage environmental impacts. Examples include reporting key performance indicators (KPIs) for climate risk management and outlining future plans for reducing environmental harm. This is an opportunity for charities to lead by example and get ahead of the curve. By embracing sustainability reporting early, organisations can set themselves apart from others and become recognised leaders in this area. Strong ESG practices also enhance reputation, which can attract significant fundraising opportunities—something charities are always seeking.
This is more than a compliance exercise. Done well, sustainability reporting can strengthen stakeholder trust, enhance fundraising opportunities, and position charities as leaders in tackling climate change. However, to move beyond generic statements, charities need robust data—and that’s where carbon accounting comes in.
Carbon Accounting: The foundation for credible reporting
Carbon accounting is the process of measuring, tracking, and reporting greenhouse gas (GHG) emissions across an organisation’s activities. It typically follows the Greenhouse Gas Protocol, categorising emissions into three scopes:
- Scope 1: Direct emissions from owned sources (e.g., fuel use in vehicles, boilers).
- Scope 2: Indirect emissions from purchased energy (e.g., electricity).
- Scope 3: All other indirect emissions across the value chain (e.g., business travel, supply chain). [pem.co.uk]
For charities, carbon accounting provides the quantitative backbone for sustainability reporting. It enables organisations to identify high-emission areas, set reduction targets, and monitor progress over time. Importantly, it transforms sustainability disclosures from aspirational narratives into evidence-based commitments. In addition to identifying areas for improvement and setting targets, carbon accounting enables organisations to showcase what they are already doing well in terms of sustainability and environmental stewardship. This positive recognition can strengthen stakeholder confidence and reinforce progress made.
The regulatory and strategic imperative
While most charities are not yet legally required to report emissions, some already fall under frameworks like Streamlined Energy and Carbon Reporting (SECR) if they meet size thresholds. Even for those outside mandatory schemes, the direction of travel is clear: funders and partners increasingly expect transparent environmental data. Integrating carbon accounting into financial systems now will future-proof charities against tightening regulations and enhance credibility with stakeholders. [charitydig…tal.org.uk]
Moreover, carbon accounting supports strategic goals. By pinpointing inefficiencies—such as energy-intensive operations or carbon-heavy supply chains—charities can reduce costs while advancing their mission sustainably. This dual benefit makes carbon accounting not just a compliance tool but a driver of operational resilience.
Bridging SORP and Carbon Accounting
The link between SORP sustainability disclosures and carbon accounting is straightforward: SORP tells charities what to report; carbon accounting tells them how to measure it. For example, when trustees’ reports require KPIs on climate risk, carbon accounting provides the data to populate those indicators*. Similarly, future plans for environmental stewardship can be grounded in measurable targets derived from emissions analysis.
Charities could start by:
- Mapping emissions sources across operations and supply chains.
- Selecting a recognised framework (e.g., GHG Protocol) for consistency.
- Integrating carbon data into financial reporting systems, ensuring alignment with SORP requirements.
- Communicating progress transparently, linking emissions reductions to broader sustainability goals such as the UN Sustainable Development Goals (SDGs). [icaew.com]
Final thoughts
As sustainability reporting becomes embedded in the Charities SORP, carbon accounting emerges as an essential enabler. Together, they offer charities a pathway to demonstrate environmental responsibility, comply with evolving standards, and build trust in an increasingly climate-conscious world. By embracing carbon accounting now, charities can turn compliance into leadership—showing that purpose-driven organisations can also be champions of a sustainable future. Demonstrating a strong ESG commitment can also help attract and retain volunteers and staff who value purpose-driven organisations. Furthermore, sustainability initiatives offer charities the chance to amplify their impact within local communities, reinforcing their role as key contributors to social and environmental wellbeing.
Ready to lead the way in sustainability?
Carbon accounting can set your charity apart, attract funders, and make a real impact. Speak to our Carbon Accounting experts today and discover how we can help you measure, report, and showcase your environmental achievements.
*SORP does not specifically mandate carbon emissions reporting or KPI details, however KPI’s are encouraged. Moreover SORP does not prescribe detailed metrics, it sets principles and leaves flexibility for charities to tailor disclosures.