What charity trustees need to know to stay ahead

As a charity trustee, you’re constantly being asked to do more, with less time, greater scrutiny and rising expectations. SORP 2026 is one of those critical expectations and it represents a significant shift in how charities are assessed.

What was once treated as a ‘nice to have’ ESG narrative in the Trustees’ Annual Report is now central to how charities demonstrate value, manage risk and build trust. SORP provides the framework for telling that story clearly and consistently and when handled well, it’s not about more paperwork, but about better decisions, stronger accountability and showing how impact is really delivered, not just how money is spent.

SORP sets out:

• What must be included in a charity’s accounts and Trustees’ Annual Report.
• How to explain what the charity does, the difference it makes and the risks it manages.
• Good-practice guidance on governance, sustainability, ESG and impact.

Why this matters for trustees

SORP isn’t theoretical guidance. It’s the authoritative framework used by auditors, regulators and funders to assess whether a charity’s reporting stands up to scrutiny.

Following it well helps trustees demonstrate:

• strong, effective governance
• responsible stewardship of charitable funds
• credible, balanced impact and sustainability reporting.

Not engaging with it fully can increase regulatory, audit and reputational risk because impact is no longer implied, it must be evidenced:

What’s changed under SORP 2026?

Effective from 1 January 2026, SORP 2026 makes the direction of travel clear:

1. Impact reporting is mandatory across the sector

SORP 2026 applies to accounting periods starting 1 January 2026 and introduces a more proportionate, value-focused approach to reporting, aligned to FRS 102.

2. Reporting is now proportionate, based on charity size.

There’s a new three-tier reporting framework:

• Tier 1: Income ≤ £500k
• Tier 2: £500k–£15m
• Tier 3: > £15m

Smaller charities can report more simply but larger charities are expected to provide more decision-useful, stakeholder-focused disclosures.

3. Sustainability and ESG move firmly into the mainstream of reporting, not a side note

ESG is now explicitly embedded in the Trustees’ Annual Report, using clear drafting signals:

• Must = mandatory
• Should = good practice
• May = optional

For Tier 1 this is a summary of main achievements and the difference made.

For Tiers 2 & 3 this is a full explanation of impact, including longer-term outcomes, supported by appropriate measures (including environmental or social indicators where relevant).

This can include:

• Principal risks – for example environmental risks and KPIs (climate-related) some charities may also face energy, carbon or climate disclosures under company law or Irish sustainability requirements.
• Social matters (people, wellbeing, diversity, communities) and where relevant, charities must explain how social, environmental or ethical considerations influence investment decisions.
• Governance and ethics.

Where ESG information sits elsewhere, trustees must clearly signpost it.

How we help trustees respond — simply and confidently

For many boards, the real risk is not under-reporting, it’s over-complicating reporting in a way that increases exposure and drains capacity.

A targeted advisory approach can help trustees:

• Confirm their tier and what truly applies to them.
• Review ESG and impact reporting to ensure it is proportionate, consistent and evidence-based.
• Identify a small, material set of ESG and impact measures that can be reported year-on-year.
• Align reporting with emerging standards (eg IFRS S1) without over-engineering.
• Strengthen principal risk disclosures around environmental and sustainability risks.
• Ensure sustainability achievements are clearly articulated, credible and board-owned.

The result:

• Clearer trustee decision-making.
• Reduced regulatory and reputational risk.
• Reporting that works for stakeholders and for the board.
• Sustainability and impact stories that reflect real achievement.

SORP 2026 is not about doing more reporting, it’s about doing the right reporting, well.

Handled properly, it can make trustees’ lives easier, not harder, while strengthening confidence, credibility and impact.

For more information, please contact Cathy Faria.

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