This paper seeks to outline the rise of environmental, social (or sustainability1) and governance factors (ESG) in the commercial sector and explain how they will become increasingly relevant to modern charities. It covers the drive behind the increasing use of ESG factors in investment decisions, reputational risks, environmental awareness amongst consumers and clients and the need to attract talent with different motivations to work.

Such a committee is not a requirement, but there are increasing numbers of them. This guidance note sets out how to ensure this committee adopts good practice in accordance with other committee recommendations under the UK Corporate Governance Code.