SORP 2026: why impact and sustainability reporting matters

The new Charities SORP 2026 builds directly on these expectations. By strengthening reporting requirements around impact and sustainability, it aims to support greater transparency, stronger accountability and, ultimately, better outcomes for beneficiaries and communities. Rather than seeing these requirements as an administrative burden, charities can view them as an opportunity: a chance to describe their achievements, demonstrate responsible stewardship and show why their work matters.

If your charity has limited experience in impact and sustainability reporting, also consider joining our free webinar, Impact and sustainability reporting: turning principle into practice, to learn about the new SORP requirements and how to put them into action.

Under SORP 2026, the trustees’ annual report adopts a three-tier structure aligned to a charity’s gross annual income:

• tier 1: up to £500,000
• tier 2: between £500,000 and £15 million
• tier 3: above £15 million

This approach recognises that, while all charities should report openly on their work, proportionality matters. Smaller organisations are not expected to adopt the same level of disclosure as larger charities, but they are still encouraged to explain clearly how they make a difference.

The overall purpose of the trustees’ annual report remains the same: to ensure public accountability and offer a narrative that links mission, activities, results and resources. What changes is the level of detail expected, particularly around achievements, performance (impact) and sustainability.

SORP 2026 places strong emphasis on explaining not only what a charity did, but what changed as a result. Stakeholders increasingly want to understand a charity’s outputs, outcomes and, where possible, its impact. After all, that’s what charities are here to deliver.

Tier 1 charities must include a summary of their main achievements during the year. Trustees should also consider explaining:

• how their work made a difference to beneficiaries
• how it provided wider benefits to society

Even simple, qualitative descriptions such as beneficiary and volunteer testimonials can be valuable. The key is to link activities to results in a way that is honest, meaningful and accessible.

For Tier 2, the reporting obligations are significantly enhanced. The report must review how well the charity and its subsidiaries performed against the aims and objectives set for the reporting period. If the charity holds material financial investments, the report must also review performance against investment objectives.

The report must explain the impact the charity is making and must consider the long-term effect of its activities on both individual beneficiaries and society. To support this, Tier 2 and 3 charities should include a summary of the measures or indicators used to assess performance, alongside an explanation of the outputs achieved by activities (such as numerical targets or services delivered).

Furthermore, they should comment on significant positive and negative factors, both internal and external, that affected the achievement of objectives.

In addition to Tier 1 and 2 requirements, Tier 3 charities must also include a review of how their fundraising activities performed against objectives. If material resources were allocated towards fundraising activities, the report must also explain the actual or intended return on the funds invested, including the net return from fundraising activities in the current and future financial periods.

Sustainability reporting, covering environmental, social and governance matters, is increasingly seen as an essential part of organisational transparency. Many funders and corporate partners now expect it, and employees and communities want assurance that charities live their values in areas such as climate responsibility, equity, workforce wellbeing and governance.

For Tier 1 and Tier 2 charities, sustainability reporting is optional. Trustees may choose to explain how the charity manages environmental, governance and social matters, taking into account the expectations of their stakeholders. Although not required, many organisations may find voluntary disclosure useful in strengthening trust and demonstrating good governance.

For the largest charities, sustainability reporting becomes mandatory. Tier 3 charities must provide a summary of how they are responding to and managing environmental, governance and social matters.

Examples of disclosures that might be included, cover details of key performance indicators used to manage climate-related risks and opportunities, and information on social aspects such as employee engagement, board diversity or community support.

Charitable companies that fall under specific UK or Republic of Ireland company legislation (such as the Large and Medium-sized Companies and Groups Regulations 2008) must also provide any specific climate-related disclosures required by those regulations.

To ensure efficiency, if a Tier 3 charity is already reporting on these matters outside of the TAR, details on where to find the information (e.g., a website link) should be included in the report.

While the new SORP introduces clearer expectations, its broader intention is simple: to help charities communicate the value they create. Good reporting is not merely compliance; it is storytelling rooted in evidence. When charities explain their impact and their approach to sustainability, they not only meet regulatory requirements but also strengthen relationships, build trust and make a compelling case for continued support.

• Register for our free webinar, Impact and sustainability reporting: turning principle into practice (24 February 2026)