THE CLIMATE CHANGE ORGANISATION · THE CLIMATE CHANGE ORGANISATION t/a Annual Report and Accounts 2013/14 12 months to 30 June 2014 COMPANY NUMBER: 4964424 ... up of clean and reliable

THE CLIMATE CHANGE ORGANISATION

t/a

Annual Report and Accounts 2013/14

12 months to 30 June 2014

COMPANY NUMBER: 4964424

CHARITY NUMBER: 1102909

- Annual Report 2013/14 2

Board of Trustees’ Report

Contents

Executive Statement ........................................................................................................................... 3

Our Vision ............................................................................................................................................ 5

Our Mission ......................................................................................................................................... 5

The Challenge ...................................................................................................................................... 6

The Opportunity .................................................................................................................................. 6

Who We Are ........................................................................................................................................ 7

Our Theory of Change ......................................................................................................................... 8

What we do ......................................................................................................................................... 9

How we work .................................................................................................................................... 10

Our work plan and key achievements for 2013/14 .......................................................................... 12

What we will do in 2014/15 .............................................................................................................. 16

Structure, governance and management ......................................................................................... 18

UK Board, management team and advisers ..................................................................................... 20

Financial results ................................................................................................................................ 23

Financial strategy .............................................................................................................................. 24

Trustees’ responsibilities in relation to the Financial Statements .................................................... 26

Independent auditors’ report to the Trustees .................................................................................. 28


Executive Statement

The Climate Group’s financial year 2013-14 coincided with the time when major countries were finally

starting to emerge from the financial crisis of four years earlier and, in most cases, beginning to regain

pre-crisis income levels. At the same time, and perhaps partly as a result, climate change began to

inch its way back up the international policy and news agendas. The Intergovernmental Panel on

Climate Change published its Fifth Assessment report – the most comprehensive overview of climate

science – which offered even greater certainty that the climate is indeed changing and that human

activity is in large part responsible. Unsurprisingly, the report also suggested that we are collectively

still doing far too little to reduce our emissions and prepare ourselves for the impacts.

However, the results of Working Group 3 – on the mitigation of climate change – noted clearly that

there are a huge number of options for reducing emissions that also bring widespread economic and

social benefits. The cost of mitigating climate change, if indeed it is a cost, is far lower than many of

the nay-sayers would have us believe.

This message – and the need to change the dominant narrative of the trade-off between climate

protection and economic development – has of course been at the centre of The Climate Group’s

work over the years. So, as we celebrated our 10th Anniversary in April, we could be satisfied that we

had played an important role in setting the world on a path to believing that low carbon prosperity is

both a desirable and an achievable objective. While many others now trumpet the same message, it

is not hubris to suggest that The Climate Group has been central to making this happen.

Our 10th Anniversary also provided the opportunity for us to review our strategic focus in making this

transition to a low carbon economy a reality. Since we were founded the world has moved on in

many ways: incredible economic growth in China and other emerging economies; remarkable cost

reductions across a range of clean energy technologies; and growing public and political awareness

that the climate change problem cannot be ignored. Nevertheless, at the same time, we still find

ourselves a long way from an economic development model that is consistent with our planetary

boundaries. Therefore while our refreshed strategy has new areas of specific focus – low carbon

finance, the role of sub-national governments and corporate leadership action platforms – the need

for leadership, convening and powerful communications remains as strong as ever. The Climate

Group therefore remains committed to this vision.

One way to achieve this will be through greater collaboration with organisations that share our goals.

Therefore we are proud to be founder members of We Mean Business, a ground-breaking coalition of

seven business facing organisations that have committed to work together to mobilise the business

community, generate a pro-growth climate narrative and push for the most ambitious international

agreement possible in Paris in December 2015.

Other highlights of the year include the kick-off of Bijli, a project that will contribute to the rapid scale-

up of clean and reliable energy in rural India, providing electricity to over fifty thousand people but,

equally and perhaps more importantly, will also make the business case for distributed renewable

energy in areas where conventional grid supplied power does not reach. Over the next two years we

hope to have identified the most promising business models and help them reach commercial scale.

In China we launched the Future Academy, another innovative and collaborative programme that will

train and empower the low carbon leaders of the future. Internationally, our States and Regions

Alliance continues to grow and, in a world in which the bottom-up efforts of non-state actors are

proving ever more important, we are seeing its impact in driving the growth of clean energy and

energy efficiency and in reinforcing and strengthening the actions of national governments. Alongside


all of this our communications work remains at the forefront of our strategy: the excellence of our

social media campaigns is widely recognised while events like Climate Week remain key moments in

the climate change calendar.

There is no doubt that the last two or three years have been far from easy. The financial crisis,

conflicts of increasing number and intensity and the lingering aftermath of the failure in Copenhagen

have made it difficult to inspire climate action. Nevertheless it is more important than ever to stay

resolute: true low carbon prosperity is within touching distance if we are prepared to stay the course.

In this vein, we would like to end by thanking all of those who have indeed stayed the course and

contributed to The Climate Group’s success over the years: our founders Steve Howard and Jim

Walker; Nicol Forster, our longest serving employee who continues to manage our boards and

governance; our trustees and directors – in particular, John Coomber, who stepped down as chair

after six years and who provided the organisation with immeasurable support; our funders and

partners; and of course all our staff without whose dedication and commitment none of our successes

would have been possible.

Mark Kenber, CEO

Phil Levermore, Chairman of the Board


Our Vision

A prosperous, low carbon future for all.

Our Mission To inspire and convince leaders in government, business and society to reduce carbon emissions

now and accelerate the transition to a low carbon economy.

Box 1. Public Benefit

We take full account of the Charity Commission’s general guidance on public benefit to ensure that

our work programmes contribute to our charitable objects and aims.

Our objectives – set out in our governing document are:

To promote for the benefit of the public the protection of the world’s climate systems in such parts

of the world and by such charitable means as the Trustees may from time to time think fit

To advance the education of the public and interested parties in the effective reduction of

greenhouse gases and to promote and carry out for the public benefit research into the effects of

climate change and to publish and widely disseminate the useful results of such research


The Challenge

This century, climate change will challenge the natural, social and economic systems on which

humanity’s development and prosperity depends.

To avoid the worst impacts requires cutting global emissions of greenhouse gases by more than half

by 20501 and virtually eliminate them by 2100.

This means changing the way we produce and use energy, restoring our forests, changing our

agricultural systems and ending our dependence on fossil fuels to power our economies.

The Opportunity

Large scale investment in the building blocks of a low carbon economy can cut emissions today and

eliminate them tomorrow.

Rapid scale-up of renewable energy, clean transportation technologies, ultra-energy efficient homes

and buildings will also drive business innovation, help create jobs, and deliver healthier, more vibrant

cities, towns and communities.

The benefits will accrue to all, but the greatest rewards will go to those that lead.

1 The Intergovernmental Panel on Climate Change states that a reduction in greenhouse gas emissions of around 40-70% from

2010 levels is necessary for a two-in-three change of keeping the increase in global temperature to 2°C.


Who We Are

The Climate Group is an award-winning, international non-profit. Our goal is a prosperous, low carbon

future. We believe this will be achieved through a ‘clean revolution’: the rapid scale-up of low carbon

energy and technology.

We work with corporate and government partners to find climate and clean energy solutions. We

develop finance mechanisms, business models which promote innovation, and supportive policy

frameworks. We convene leaders, share hard evidence of successful low carbon growth, and pilot

practical climate and energy solutions which can be replicated worldwide. Together, we are working

to cut greenhouse gas emissions today and lay the foundations for future low carbon prosperity.

Our global staff of over 50 professionals are located in offices in Greater China (Beijing and Hong

Kong), North America (New York City), India (New Delhi) and Europe (London). In April 2014 we

celebrated our 10th Anniversary.

Box 2. Our philanthropic supporters

As a charity with no regular government funding and to ensure our continued independence, The

Climate Group depends on the support of like-minded donors who appreciate the scale of the

challenge that we face and the time-limited nature of an effective response.

Philanthropic supporters give more than just financial support. We value their leadership and view

of the world, which is often different to our corporate and government partners. As such, we will

continue to invite philanthropic supporters to join our International Leadership Council or to

become Ambassadors where their leadership can help drive forward our vision.

Our current philanthropic supporters include the Tellus Mater Foundation, Dutch Postcode Lottery,

Zennström Philanthropies, The Prince Albert II of Monaco Foundation, Rockefeller Brothers Fund

and the Khemka Foundation, as well as a number of private donors.


Our Theory of Change

There is a moment when a new idea or technology moves from the margins and becomes

mainstream: a tipping point. Once this happens, change is unstoppable. To reach that tipping point

you need to inspire the top 20% of the most influential people – policymakers, business leaders,

public figures. If you win over those people, the rest will follow.

At The Climate Group, this is our theory of change and why we concentrate our work on scaling up

climate leadership and focusing on a message of opportunity. We know that by focusing on a small

community of influential leaders, in government, business and civil society – a ‘Global 1000’ – we can

have a disproportionate impact as a small but nimble non-profit organisation.

It takes courage and clear information for leaders to make big changes, so our role is to support

leading individuals and their organisations on this path. We bring leaders together and support them

with the evidence and networks they need to move forward. We create opportunities for them to

collaborate on more risky and transformational action at opportune times. This is why we are here.

Box 3. Dutch Postcode Lottery

We are fortunate to be one of the 92 long-term beneficiaries of

the Dutch Postcode Lottery, the biggest private fundraiser in

the world. Their funding allows us the financial confidence to

plan strategically and to respond quickly to breaking news and

changes in policy.


What we do

We deliver our charitable objectives of public education, research and communication through a

variety of means:

Activity Relevant Charitable

Objective

Building coalitions that bring leaders together, bridging sectors and

regional boundaries, with a particular focus on leading state and regional

governments, major corporations and clean technology providers.

Communication;

education

Delivering carbon reductions whilst benefiting local communities, by

developing and delivering, replicable transformational projects with

our partners in North America, Europe, China and India (recent examples

include energy-efficient LED street lighting, and off-grid solar energy

projects).

Research; education;

communication

Building awareness of solutions, rewarding leadership and driving new

commitments through media and communications campaigns including

our websites and social media channels.

Education;

communication

Sharing knowledge, removing barriers and facilitating new partnerships for

action through focused events, forums and bilateral meetings including

Climate Week NYC, our major annual forum in New York.

Communication;

education

Demonstrating the benefits and opportunities of increased action through

conducting research and producing publications and briefings for

our network and the general public.

Research; education;

communication

We draw on the progress that our members are making in deploying new technologies, policies,

financing mechanisms and business strategies for a low carbon future, and we use our in-house

communications expertise to show how these advances can become the ‘new normal’.

In short, we pinpoint the most influential people in government, business and society. We offer them a

credible, positive, politically neutral and inclusive vision of the low carbon future, arm them with hard

evidence and success stories and spur them into action so we can reach that tipping point where

transformation to a low carbon economy becomes inevitable.


How we work

All our work is guided by four core principles:

Climate change is an economic issue not just an environmental concern. Government and

business leaders are sensitive to moral imperatives, but they respond best to clear messages and

proposals that combine economic, social and environmental benefits. Leaders also respond better to

approaches that enrol and involve people. So we present solutions professionally and in business

terms, making the economic case for their implementation.

A small community has a big influence. A small number of organisations have a huge influence on

the future economy and its carbon intensity. If the 200 sector-leading global companies, 50 leading

governments (national, regional and city), and most influential individuals within these organisations –

CEOs, political leaders, ministers, governors, mayors, senior executives and advisers pursue the

economic, strategic, social and environmental benefits of a low carbon future, their actions and

commitments can be decisive in making it happen.

Partnerships are more effective than organisations acting alone. Our active network of

governments, business and other partners enables new, innovative partnerships to generate original,

bold and exciting actions for low carbon growth. We look to partner like-minded organisations to

ensure that the total of our efforts is greater than the sum of their parts.

Clear communication of practical success stories drives action. Information about the science

and economics of climate change is extensive, occasionally overwhelming, and often inaccessible to

decision and opinion makers. Much can be achieved by presenting case studies and evidence of

success in new and compelling ways, and by communicating a positive vision of a low carbon future

at the same time as demonstrating that this future is truly achievable.


Box 4. Our Partners

We are a partnership driven and centred organisation. To deliver effective action on climate

change at the scale required, we work with our government and business members – it is their

leadership and action that ultimately drives progress. We work with partners to deliver specific

projects, events and reports. We also work with other non-government organisations (NGOs)

where our combined efforts and expertise can drive change forward more quickly.

NGOs: The World Bank, United Nations Global Compact, CDP, and the Climate Knowledge

Innovation Centre (Climate-KIC) are official partners in our Clean Revolution initiative. We also

work with a range of other non-profits and academic organisations in delivery of our programmes

worldwide. Recent partners have included the World Resources Institute, IRENA, Carbon War

Room, The Carbon Trust, WWF, Forum for the Future, Institute for Sustainability, Ceres, the

Institutional Investors Group on Climate Change, Metropolis, NRG4SD, R20 and S3IDF.

Philanthropic: Dutch Postcode Lottery, Zennström Philanthropies, The Prince Albert II Monaco

Foundation, Tellus Mater Foundation, Rockefeller Brothers Fund and the Khemka Foundation.

States & Regions: Government of Baden-Württemberg, Government of the Basque Country,

Government of Bavaria, Government of Brittany, Government of California, Government of

Catalonia, Government of Connecticut, Government of Gujarat, Government of Ile-de-France,

Government of KwaZulu-Natal, Government of La Réunion, Government of Manitoba,

Government of New York State, Government of North Rhine-Westphalia, Government of Ontario,

Government of Québec, Government of Quintana Roo, Government of Rhône-Alpes, Government

of Rio de Janeiro State, Government of São Paulo State, Government of Scotland, Government of

South Australia, Government of Tasmania, Government of Upper Austria, Government of Wales

and Government of Wallonia.

Corporate: Arup, Bloomberg, BT, Broad Group, CB Richard Ellis Group, CECEP, CLP Holdings

Limited, Dell, Duke Energy, En+ Group, Goldman Sachs, Greenstone Carbon Management,

Hanergy, HP, IKEA, IWC Schaffhausen, Landsea, News Corporation, Philips, Procter & Gamble,

Suzlon, Swiss Re, Taobao, VantagePoint Venture Partners. We also work with aligned companies

and industry associations in the development of our programmes and events (recent examples

including Knight Frank, Nike, Intel, DESSC, GE Lighting, Lockheed Martin, CapGemini, SKF,

Kingfisher, Coca-Cola Enterprises, Johnson Controls International, Facebook, Marblar,

CityMart.com, Research Triangle Institute and Selco) and look to profile selected start-up

companies developing innovative and transformational products and services (examples include

Solar City, Beijing XinAo Concrete, Lowfoot, Ecovative, bioMASON, NewLight, and One Earth

Designs).

International Leadership Council: We are also honoured to count on the guidance and support

of the international leaders that make up The Climate Group’s International Leadership Council

(ILC). Chaired by the Rt Hon. Tony Blair the ILC brings together leaders in business and

government from around the world, to accelerate global action on climate change and drive low

carbon economic transformation. (For a full list of Council members see page 21).

Advisory Boards: We work with small groups of experts to help us shape and guide our

initiatives. See page 22 for a full list.


Our work plan and key achievements for 2013/14

Guided by our four core principles, during 2013/14 we once again focused on building on our Clean

Revolution Campaign work, driving and supporting leadership to maximise the influence on the future

economy and its carbon intensity, and worked with key partners to demonstrate potential

transformational change,

Clean Revolution Campaign

We set out to build support for a Clean Revolution by generating and communicating thought

leadership and evidence that highlights the opportunities in the low carbon economy and so changes

the current climate change discourse.

Two major events defined our Clean Revolution Campaign in 2013/14 – our fifth annual Climate Week

NYC (CWNYC) and our 10th Anniversary celebration event. Both provided a platform for show casing

the actions that are being taken and that could be taken to rapidly scale up clean technologies to cut

emissions and create prosperous low carbon economies.

CWNYC held in September 2013, reached an audience of 900 million and generated media coverage

in a range of high profile publications, including [The New York Times, Huffington Post and Guardian.]

The theme of the opening ceremony – ‘Leadership, Opportunity and Security’ – was discussed by

speakers including The World Bank President, Jim Kim, former US Marine, Brigadier Steven Cheney,

entrepreneur Richard Branson; CEO of HP, Meg Whitman; and Tony Blair amongst others.

Our 10th Anniversary event in April was an opportunity to reflect on ten years of leadership and

innovation in addressing climate change. Speakers included Rt Hon Ed Davey, UK Secretary of State

for Climate & Energy; Premier Jay Weatherill of South Australia, and co-chair of our States & Regions

Alliance; and China’s ambassador to the UK, H.E. Liu Xiaoming. The event also saw the

announcement of a new renewable energy initiative – ‘RE100’ – aimed at scaling up corporate use of

clean energy (see below for more information), as well as a report looking at what it means to be a

‘Net Positive’ business.

We actively supported communication of key findings from the Fifth Assessment Report (AR5) which

was released by the Intergovernmental Panel on Climate Change in three parts. This included a

livestream from climate scientists to our VIP audience at CWNYC on the morning of the launch of the

first part of the AR5. We subsequently had a live Q&A Twitter session in April with the co-chair of the

third volume that covered the mitigation of climate change. Comments by our CEO, Mark Kenber, on

the IPCC findings reached an audience of over 60 million.

Other key achievements in support of the Clean Revolution Campaign included reaching new social

and digital media milestones. Our number of followers on Twitter passed 60,000, while our Google+

numbers hit 50,000. These figures made us one of the top social media performers among

environmental non-profit organisations.

We reviewed our Clean Revolution Ambassador programme during the year as part of our wider

Strategic Review process. This will see a more integrated and streamlined programme developed

during the next reporting year. New Ambassador prospects continued to be approached, however,

with Brigadier General Steve Cheney and former US Republican Congressmen, Bob Inglis, both

recruited.


Driving and supporting leadership

In line with our leadership programme, we set out to drive and support leadership through our States

and Regions Alliance and network of corporate partners, so they commit to strategies consistent with

a prosperous low carbon future and actively advocate for a robust and ambitious climate policy.

2013/14 saw our States & Regions work solidify around key online and in-person meetings, such as

practitioner webinars, the annual ministerial gathering of States & Regions members at COP19 in

Warsaw and a members’ meeting alongside the 10th Anniversary event in London. The year also saw

further development of government-led Working Groups, covering topics such as adaptation, clean

tech innovation and electric vehicles. A briefing summarising the outcomes of the EV working group

was published in November. We also established a partnership with CDP to develop a reporting

platform for sub-national governments, building on the ground-breaking work CDP conducts with

corporates and cities. The pilot-testing of the state and regional online disclosure portal run from May

till September 2014 with 11 participating governments from different world regions. Our engagement

with members was energised through a new States & Regions team, comprising a director and

manager that settled into their roles during the year.

Our engagement with our corporate partners and the wider business community also continued to

deliver results in 2013/14. Together with our lead partner IKEA, along with Nike and five other

business-focused non-profits (BSR, Ceres, CDP, Corporate Leaders Group, and WBSCD) we

established the We Mean Business (WMB) initiative in January 2014. The purpose of this pioneering

coalition is to amplify the voice of forward-looking businesses that understand the risks and

opportunities of climate change, catalyze bold climate action by all, and promote smart policy

frameworks. WMB goal is securing an effective new global climate deal in Paris in December 2015.

Working closely with our other lead partner, Philips, we also began delivery of an international

consultation programme focused on addressing barriers to the scale-up of LED street lighting.

Lighting is responsible for about 19% of global emissions and is a major cost for city governments.

Ultra energy efficient LEDs provide a solution to both problems. Meeting with a range of cities in both

developed and developing countries, this work will continue into FY2014/15.

As noted above, we launched a new report, in partnership with WWF, Forum for the Future, IKEA,

Kingfisher, Coca Cola, CapGemini, SKF and BT, looking at the concept of ‘Net Positive’. A number of

businesses, including the aforementioned, have made commitments to rebuild social and

environmental capital beyond the boundaries of current business models. The report looked at what

this means in practice and how to evaluate the concept.

Our Beijing team also used ‘Net Positive’ case studies as the foundation for the first Future Academy

course, which was run in the first half of 2014. The Future Academy will be one of our main initiatives

in China over the coming few years and aims to equip the country’s next generation of corporate and

government leaders with knowledge about climate change and the Chinese government’s concept of

“Eco-civilisation”.

The announcement of the RE100 initiative represents a further expansion of our renewable energy

work. The project’s objective is to get at least 100 leading international businesses to commit to using

100% renewable power by 2020. The idea is to build a critical mass from this nucleus that unleashes

a wave of ‘demand destruction’ for high-carbon power through driving demand for renewables. By

June 30, IKEA and Swiss Re had confirmed support, with a further five to six corporates expected to

join by the official launch at CWNYC 2014 in September.


Demonstrating (the potential for) transformational change

Demonstrate the potential for transformational change by continuing to work with our partners, States

and Regions members, companies and regional governments to bring about transformative actions in

LED, ICT and climate finance initiatives.

Our flagship India project – ‘Bijli – Clean Energy for All’ – went from strength to strength in 2013-14.

Funded by the Dutch Postcode Lottery, this project aims to provide off-grid renewable energy to a

number of India’s rural communities, while also investigating the best business models for subsequent

large scale deployment of off-grid solutions. The initial target was to provide power to 5300 people,

but success during the year meant that this has now been revised up to 50,000 by the project’s end in

September 2015. By June 2014, some 13,000 people had already been connected. Off the back of

these achievements we are continuing discussions with both Goldman Sachs and US-AID on future

financing models for scaling off-grid energy.

In China, our team delivered transformational change projects in financing, energy planning and the

development of low-carbon, ‘green’ concrete. In Guangdong Province, we completed a GIZ-

sponsored climate finance policy mapping project, which is expected to contribute to official policy

making in the region. We were also part of a winning team for the Sha’anxi Energy Efficiency

Financing and Green Credit Lending project. This initiative opens up the door to working with

industries and the Chinese banking sector in developing green credit lending for industry energy

efficiency measures in the region.

In Guiyang, we successfully completed work on strategic energy planning, which has been submitted

to the municipal government. This thought-leadership will inform the development of Guiyang’s 13th

Five Year energy plan. Finally, we also continued our work with the Xin Ao Concrete Group, including

discussions on a carbon emissions reduction credit methodology and development of a briefing on

100% construction waste recovery, which we plan to submit to the State Council.

Due to changes in staff and a reassessment of our priorities, our work on ICT-enabled low carbon

businesses and cities, along with our proposed innovation strategy was not taken forward in 2013/14.

Elements of these areas are expected to be picked up, as appropriate, in other ongoing initiatives,

however.

An organisation that is fit for purpose

A final objective for the year was to refresh our strategy based on an assessment of external political and business conditions together the latest climate science, in consultation with internal and external stakeholders and an evaluation of our core strengths to ensure effective delivery of our Mission.

To this end we conducted a major strategic review in 2013/14 involving staff, outreach to corporate

and government partners and discussions with our boards and others in our broader network. As a

result of this work we have agreed a new, three-year, ‘pillar’ strategy that will guide our work from July

2014 to June 2017. The thematic pillars and respective three year strategic goals (to be reviewed

annually) are set out in the table below.

Thematic Pillar 3 Year Strategic Goal

States & Regions Policy By June 2017, the leading states and regions we work with will

have in place targets, timetables and policies consistent with

achieving net zero emissions by 2050.


Low Carbon Finance By June 2017, we will have identified and proposed implementable

solutions to the principal barriers to the scale up of commercial

financing for low carbon technologies in the regions in which we

work.

Smart Business Action By June 2017 a hub of major incumbent corporates will be at the

forefront of ambitious climate action and the creation of thriving low

carbon economies. This will happen because our coalition-based

advocacy and high-impact projects will have helped persuade the

business mainstream to drive such change and publicly support it

as the best economic option and most socially responsible strategy

Clean Revolution Leadership By June 2017, together with our partners, we will have built a

global network of low carbon leaders who have pushed the

economic and business opportunity narrative into the heart of

boardroom and cabinet discourse by effectively engaging targeted

members of the ‘Global 1000’ leaders and influencers.

Organisational Excellence Over the next three years we will deploy resources efficiently and

effectively to maximise the impact on our programmes, improve

staff satisfaction and deliver maximum value for money for our

funders.


What we will do in 2014/15

Our work in FY2014/15 will focus on embedding our new three year strategy and delivering the

projects and support functions that we believe will enable us to meet the strategic objectives we have

set ourselves.

States & Regions Policy

We will:

• Work with partners, such as nrg4SD, R20, CDP, and government partners to operationalise the

‘Compact of States & Regions’ on sub-national climate commitments and reporting

• Continue working with CDP to develop the states and regional emissions reporting pilot into a full

program platform

• Further develop and begin to implement our ‘Policy Innovation Lab’ to identify and scale

successful state and regional policy innovations, through interventions in each stage of the “policy

diffusion” process- increasing the pace of policy adoption worldwide.

• Continue to facilitate peer-to-peer experience sharing around key climate and energy policy

themes through the States & Regions Peer Forums,

• Continue to strengthen and improve the governance and management of our States & Regions

Alliance and recruit new members in key regions.

Low Carbon Finance

We will:

• Continue to advance our work on LED street lighting in India

• Continue to successfully manage the ‘Bijli’ project on off-grid rural energy in India, as well

advance related financing work with Goldman Sachs and US-AID

• Work with our partners in China to implement the Financing Energy and Environment Solutions

(FEES) project

Smart Business Action

We will:

• Formally launch the RE100 project at CWNYC 2014, and continue to expand corporate

membership through the year

• Continue the LED consultation project, working closely with our partner, Philips.

• Begin phase one of our proposed ‘Home 2025’ project with IKEA looking at the low-carbon house

for the coming decade

• Continue our work with our ‘Net Positive’ partners to further develop and begin embedding the

concept within mainstream business.

• Further develop our work with Xin Ao Concrete on sustainable building construction

• Hold our inaugural Beijing Global Cleantech Summit in September 2014 and begin planning for

our second in 2015.

Clean Revolution Leadership

We will:

• Hold our sixth annual Climate Week NYC in September 2014 and begin planning for a 2015 event

• Develop and implement our revised ‘Leadership Program’


• Continue to support, promote and help to develop the We Mean Business coalition so that it has a

substantive impact on efforts to secure a new global climate deal in Paris in December 2015.

• Develop and deliver our second ‘Future Academy’ program in China

Organisational Excellence

• Implement the agreed ‘Organisational Excellence’ strategy to improve various support functions

including HR, IT, fundraising, finance, and office management.


Structure, governance and management

The Climate Group is an international not-for-profit organisation with representation in London, New

York, Beijing, Hong Kong and New Delhi. This report is produced by our international headquarters,

which is a UK charitable company limited by guarantee and registered under the legal name of The

Climate Change Organisation. Our statutory objects and powers are established in a Memorandum of

Association, and the company is governed under its Articles of Association.

Our Trustees are elected to serve for three years and can be re-elected for a second term. After six

years, Trustees must take a minimum 12 months’ break before being eligible for re-appointment.

Trustees meet quarterly, with additional meetings if required, and delegate the day-to-day operations

of the organisation to the Executive Management Team headed by the Chief Executive. All Trustees

give of their time freely and no remuneration or expenses were paid in the year.

The Trustees look for a range of skills for representation on the board when recruiting and appointing

new Trustees, including familiarity with the ways that leading businesses and governments should

respond to climate change. Our current Board includes members with finance, communications,

business and legal expertise.

The induction of new Trustees is tailored to the skills, knowledge and expertise of each individual. Our

Chairman and Chief Executive brief new Trustees on recent progress, future plans, legal structure

and finances, as well as Trustees’ obligations in their role. We also encourage prospective Trustees

to observe one or two Trustee Board meetings to familiarise themselves with our work before formal

election.

The Board is supported by three committees. The Finance and Audit Committee strengthens

oversight of our finances, budgeting and fundraising performance, meeting with and obtaining reports

from the organisation’s auditors. The Remuneration Committee recommends remuneration strategies

and policies and the Board Appointments Committee advises on matters pertaining to the

appointment of Trustees. The committees meet quarterly, or as required, in addition to the regular

Trustee meetings.

The Trustees are responsible for ensuring that major risks facing The Climate Group are appropriately

managed. The major risks identified are regularly reviewed and their potential impact assessed.

Strategies and controls to manage each risk appropriately are in place, with some subject to

continuous improvement. In those areas of our work where a degree of risk is inevitable, appropriate

steps have been taken to mitigate that risk where possible. Updates to the register and key risks are

reported to the Finance and Audit Committee.

The Climate Group is represented by legal entities in the US, Australia, China, Hong Kong, Belgium

and India which enable us to hire staff and raise and direct funds towards our work internationally

(see Note 15 of the accounts for further details). They work closely with the UK charity, with local

board positions for members of our Executive Management Team strengthening international

relationships. Our Chief Executive sits on the corporation board of the US, and together with our

International Programmes and Strategy Director, sits on the Australian, Chinese, Hong Kong, and

Belgian corporation boards. Our head office’s relationship with the regional offices is underpinned by

legal contracts. These contracts cover co-ordination of work programmes and licensing of the name

and trademarks to the regional representatives. Our UK trading subsidiary (The Climate Change

Organisation Services Limited), carries out any trading or service activities of the charity.


Carbon Management Policy

According to organisational policy The Climate Group’s operations and activities are (certified) carbon

neutral. As well as endeavouring to keep our CO2 emissions as low as possible by eliminating

unnecessary travel, we offset unavoidable emissions using carbon credits certified under the Verified

Carbon Standard or the Gold Standard.


UK Board, management team and advisers

Registered name The Climate Change Organisation

Trading name The °Climate Group

Charity number 1102909

Company number 4964424

Incorporation

14 November 2003 and registered as a UK charity on 26 March 2004

Principal office & Registered office

Second Floor, Riverside Building

County Hall

Belvedere Road

London SE1 7PB

Board of Trustees

Zoë Ashcroft

Greg Barker – appointed 23 February 2015

Matt Brittin

Vivienne Cox – resigned 23 February 2015

Phil Levermore (Chairman)

Joan MacNaughton

Andrew Smith

Dominic Waughray

Niklas Zennström – resigned 16 June 2014

Company Secretary

Ian McLintock

Chief Executive Officer

Mark Kenber

Executive Management Team

Jonathan Badger, Fundraising Director – from 13 October 2014

Ben Ferrari, Director of Corporate Partnerships

Eduardo Gonçalves, International Communications Director

Mark Kenber, Chief Executive Officer

Ian McLintock, International Operations Director

Damian Ryan, Senior Policy Manager (International) – from 10 July 2014

Amy Davidsen, Executive Director US

Krishnan Pallassana, India Director

Jim Walker, International Programmes and Strategy Director

Changhua Wu, Greater China Director


Accountants Solicitors

JS2 Limited Winston & Strawn London

One Crown Square CityPoint

Woking One Ropemaker Street

Surrey GU21 6HR London EC2Y 9HU

Bankers Auditors

HSBC Bank plc Crowe Clark Whitehill LLP

34 High Street St. Brides House

Walton-on-Thames 10 Salisbury Square,

Surrey KT12 1DD London EC4Y 8EH

Trustees / Directors of our International Boards

Professor Bill Moomaw, US

Steve Westly, US

Paul Dolan, US

David L. Pogue, US – appointed 18 December 2013

Douglas P. Lawrence, US – appointed 23 September 2014

Jeffrey B. Gracer, US – appointed 23 September 2014

Plato K. Yip, Hong Kong

Suresh Prabhu, India – resigned 7 November 2014

Uday Khemka, India

Dr Kirit Parikh, India

Dr Rana Kapoor, India – appointed 9 September 2014

International Leadership Council

Rt Hon Tony Blair (Chair)

HSH Prince Albert II, Sovereign Prince of Monaco

Dr. Sultan Al Jaber, Chief Executive Officer, Abu Dhabi Future Energy Company and Masdar Initiative

Mr. Clesio Antonio Balbo, President, Balbo Group

Mr. Sunil Bharti Mittal, Chairman and Managing Director, Bharti Group

Mr. Thor Björgólfsson, Chief Executive Officer, Novator

Mr Andrew Brandler, Director, CLP Holdings Limited

Sir Richard Branson, Chairman, Virgin Group

Lord Browne of Madingley, Managing Director, Riverstone

Mr. John Coomber, Board Member, Swiss Re Group

Mr. Johan Eliasch, Chairman, The HEAD Group

Dr. Steve Howard, Chief Sustainability Officer, IKEA

Lady Barbara Judge, Eversheds

Dr. Rana Kapoor, Managing Director & CEO, Yes Bank Limited

Mr David Kenny, CEO, The Weather Company

Chairman Li, Chairman, Hanergy

Mr Dennis Mehiel, Chairman, US Corrugated

Mrs. Karen Mehiel, CEO, KAMPACK INC

Mr. James Murdoch, Deputy Chief Operating Officer, Chairman & CEO, International, Twenty-First

Century Fox, Inc.

Mr. Idan Ofer, Chairman of Better Place and Israel Corp.

Mr Mikael Ohlsson, Former Chief Executive Officer, IKEA

Mr. Boudewijn Poelmann, Co-Founder, Dutch Postcode Lottery


Mr. Anthony Pratt, Chairman of Pratt Industries and Visy

Mr. Jim Rogers, President and Chief Executive Officer, Duke Energy

Mr. Alan Salzman, Chief Executive Officer, Vantage Point Venture Partners

Mr. Vinod Sekhar, Chairman and Chief Executive Officer, Petra Group & Chairman, Sekhar

Foundation

Dr. Andrew Steer, President, World Resources Institute

Mr. Tulsi Tanti, Founder, Chairman, and Managing Director, Suzlon Energy Ltd.

Mr Steve Westly, Managing Partner, The Westly Group

Mr Mark Wilson, Chief Executive Officer, Aviva

Mr. Zhang Yue, Former Chairman and Chief Executive Officer, Broad

Mr. Niklas Zennström, Co-Founder Skype, Atomico Investments and Zennström Philanthropies

Advisors

Cleantech Expert Panel

Magnus Agerström, Managing Director, Cleantech Scandinavia

Ricardo Angel, Managing Director, GE Ventures

Peter Cook, Senior Investment Officer Clean Technology Investments, IFC Venture Capital

Rob Day, Partner, Black Coral Capital

Olivier Dupont, Chairman, Demeter Partners

Yuan Fang, Investment Manager, Aster Capital

Lawrence Jin, Partner, Deloitte China

Fredrik Jonsson, Partner, Cleantech, Deloitte

Mike Kiang, Vice Chairman, CHC Capital

Paul Kloppenborg, Partner, Global Cleantech Capital

Julien Mialaret, Investment Manager, Idinvest Partners

Bernhard Mohr, Managing Director, Evonik Venture Capital

Lassi Noponen, Chairman & Partner, Cleantech Invest

Nicholas Parker, Co-founder & Managing Partner, Global Acceleration Partners

Gary Rieschel, Founding Managing Partner, Qiming Venture Partners

Niki Rosinski, Partner, Generation IM

Zhongmin Shen, Partner, Hudson Clean Energy

Kerryn Tay, Head of China, Clean Resources Group, CLSA Capital Partners

Joost Waeterloos, European Technology Scouting Leader, The Dow Chemical Company

Jochen Wermuth, Chief Investment Officer & Founding Partner, Wermuth Asset Management

Changhua Wu, Greater China Director, The Climate Group

Calvin Xu, Executive Director, Olympus Capital Asia

Richard Youngman, Managing Director, Europe & Asia, Cleantech Group

Bijli Clean Energy for All Project

Professor Gerard George, Director, Rajiv Gandhi Centre, Imperial College, London

Jeffrey Prins, Programme Manager, Stichting DOEN

Dr Kirit Parikh, Chairman, Integrated Research and Action for Development (IRADe)

Dr S P Gonchaudhuri, Chair, Ashden Sustainable Energy Collective

Mohua Mukherjee, Senior Energy Specialist, World Bank Institute


Financial results

The Statement of Financial Activities (page 30) and the following show our full financial results for the

year. Financial information on this report relates to both the UK charity (indicated by “Charity” in the

accounts) and the consolidated reports of the UK, the US, Australia, China, Hong Kong and India

(indicated by “Group”). Figures in this section reflect the consolidated Group figures.

Income

Our total income for the 2013/14 financial year was £3,746,579 (2013: £5,723,654), which consists of

voluntary income of £3,472,499 (2013: £5,507,383), income from activities for generating funds of

£270,425 (2013: £216,185) and investment income of £3,655 (2013: £86).

Development

We continued to develop our programmes with a diverse group of funders, but giving from individuals,

foundations, government grants and corporate philanthropy remains challenging. This reflects the

continuing economic down turn and a move away from giving to organisations working on the climate

change agenda.

We directed 21% (2013: 14%) of our budget towards generating funds, with most allocated to staff

costs.

Our new strategy makes a compelling fundraising case and we have also continued to invest in our

fundraising capability and, consequently, are confident that we shall substantively increase our

fundraising income over the coming year and beyond.

Expenditure

During the accounting period we spent a total of £4,363,169 (2013: £4,138,474), including £1,119,831

on research activities (2013: £1,138,580) which represents a significant investment in

transformational technologies which will form case studies for the Clean Revolution, £1,163,411

(2013: £891,218) on raising awareness of climate change and its solutions, and £1,049,503 on

education of business and government partners on leadership opportunities associated with ‘low

carbon’ policy and strategy (2013: £1,380,761). The cost of generating funds was £924,314 (2013:

£597,982) and governance costs were £106,110 (2013: £129,933).

Financial position at year end

We made a deficit of £616,590 (2013: £1,585,180 surplus). We closed the reporting period with a

positive position of £1,349,048 (2013: £1,938,824) comprising a restricted funds position of

£1,768,098(2013: £2,029,070) and a negative unrestricted funds position of £419,050 (2013: £90,246

deficit). The result included a gain on revaluation of foreign currency subsidiaries of £26,814 (2013:

£8,706 loss).


Financial strategy

Reserves Policy

The Climate Group’s long term objective is to hold reserves equal to 25% of expenditure. In order to

secure The Climate Group’s long term viability and enable the organisation to become properly

entrepreneurial, the Board set a financial objective to restore reserves within three financial years. To

achieve this, the objective was to deliver operating surpluses to reduce the long standing balance

sheet deficits of £834,000 as at 1 Jul 2014 to zero by end 14/15 (30 Jun 2015) and £500,000

surpluses in each of the two subsequent financial years.

As at 30 June 2014, total reserves were £1,349,000 (2013: £1,938,000), of which £1,768,000 was

restricted (2013: £2,029,000) and an unrestricted deficit of £419,000 (2013: deficit £90,000).

Financial Review and Results

For the year ended 30 June 2014, total incoming resources were £3,746,000 (2013: £5,723,000). This

very large fall was due to The Climate Group being paid an extremely generous two year grant in full

(£2,293,000) from the Dutch Postcode Lottery in 13/14 for our innovative and highly successful Bijli

work in India.

Total resources expended in the year were £4,363,000 (2013: £4,138,000).

The net movement in funds for the year was a deficit of £616,000 (2013: surplus £1,585,000), due to

the Bijli income being taken fully into the accounts in 13/14 with the majority of expenditure incurred in

the two subsequent years. £587,000 was drawn down from the Bijli restricted funds, so the

underlying net movement position was a deficit of £29,000.

The net cash outflow totalled £904,000 (2013: inflow £1,912,000), due to Bijli expenditure against

restricted funds, leaving total cash balances of £2,023,000 at the year end.

Financial Strategy

The funding pipeline has been very significantly built in recent years and the UK operation is on track

to deliver a significant operating surplus in 14/15 and again in 15/16, but security of income streams

remains a major challenge and, probably always will. Nonetheless, we have been able to access

substantial funding from the We Mean Business Coalition that will run to end February 2016.

However, the successes of the UK operation have in large measure been degraded by weakening

financial performance in the overseas offices and this is an issue that needs to be addressed. To

address this, the UK operation income generation team has continued to be built and is now much

more capable, and has taken on a global role.

The Bijli funding for India has not only enabled us to deliver desperately needed technology to poor

villagers in rural areas of India, but also enabled us to build substantially the small India office team in

a key strategic area. The programme is on track to over deliver and come in significantly under

budget. As a consequence, the Dutch Postcode Lottery have kindly allowed us to use the saved

funding to extend the programme from April 2015 to the end of September 2015. Bijli has enabled us

to build from a strong base and we now have a highly capable expanded India team who will be able

to deliver new programmes and income streams when the funding ends in September 2015.

The Board agreed that our focus in the short and medium term should be narrower than is currently

the case while retaining the four pillar strategy that was agreed following our strategic review earlier

on in the year.


This is a very positive way forward through coordinating capabilities and assets, key programmes and

events in a way that would help focus programmatic delivery more effectively, drive up income

streams, and lose cost without impact through combining activities. This is being supported by new

processes to manage project development that will provide a much more compelling case and suite of

projects for potential funders.


Trustees’ responsibilities in relation to the Financial Statements

The Trustees (who are also directors for the purposes of company law) are responsible for preparing

the Trustees’ Annual Report and the financial statements in accordance with applicable law and

United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

Company law requires the Trustees to prepare financial statements for each financial year. Under

company law the Trustees must not approve the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the charitable company and the group and of the

incoming resources and application of resources, including the income and expenditure, of the

charitable group for that period. In preparing these financial statements, the Trustees are required to:

• select suitable accounting policies and then apply them consistently;

• observe the methods and principles in the Charities SORP;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material

departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to

assume that the charitable company will continue on that basis.

The Trustees are responsible for keeping proper accounting records that are sufficient to show and

explain the charitable company’s transactions and disclose with reasonable accuracy at any time the

financial position of the charitable company and to enable them to ensure that the financial

statements comply with the Companies Act 2006 and the provisions of the charity’s constitution. They

are also responsible for safeguarding the assets of the charity and the group and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

Provision of information to auditors

Each of the persons who are a Trustee at the date of approval of this report confirms that:

• so far as he/she is aware, there is no relevant audit information of which the company’s

auditors are unaware; and

• the Trustee has taken all the steps that he/she ought to have taken as a Trustee in order to

make himself/herself aware of any relevant audit information and to establish that the

company’s auditors are aware of that information.

Members of the Board of Trustees who are directors for the purpose of company law and Trustees

for the purpose of charity law, who served during the period and up to the date of this Report are set

out on page 20.


Auditors

A resolution to re-appoint Crowe Clark Whitehill LLP as auditors will be proposed at the forthcoming

Annual General Meeting.

This report has been prepared in accordance with the Statement of Recommended Practice:

Accounting and Reporting by Charities (issued in March 2005).

Approved by the Board of Trustees on 27 March 2015 and signed on its behalf by:

Phil Levermore

Chairman of the Board


Independent auditors’ report to the Trustees

We have audited the financial statements of The Climate Change Organisation for the year ended 30

June 2014 set out pages 30 to 45.

The financial reporting framework that has been applied in their preparation is applicable law and

United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This Report is made solely to the charitable company’s members, as a body, in accordance with

Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we

might state to the charitable company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the charitable company and the company’s members as a

body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Trustees and auditor

As explained more fully in the Statement of Trustees' Responsibilities, the Trustees (who are also the

directors of the charitable company for the purpose of company law) are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with

applicable law and International Standards on Auditing (UK and Ireland). Those standards require us

to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements

sufficient to give reasonable assurance that the financial statements are free from material

misstatement, whether caused by fraud or error. This includes an assessment of: whether the

accounting policies are appropriate to the company's circumstances and have been consistently

applied and adequately disclosed; the reasonableness of significant accounting estimates made by

the directors; and the overall presentation of the financial statements.

In addition, we read all the financial and non-financial information in the Trustees’ Annual Report to

identify material inconsistencies with the audited financial statements. If we become aware of any

apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the group’s and the charitable company’s affairs as at 30

June 2014 and of the group’s incoming resources and application of resources, including its

income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.


Emphasis of matter – going concern

In forming our opinion, which is not qualified, we draw attention to the disclosures in Note 1(a) of the

financial statements concerning the charitable company’s ability to continue as a going concern.

The Climate Change Organisation, like many charities, is dependent on voluntary income to fund its

activities and therefore does not have adequate committed funding in place to meet its future

commitments. The Climate Change Organisation is continuing to implement a new strategy to

generate income and is dependent on the success of this strategy in order to continue as a going

concern. The Trustees therefore consider that a material uncertainty exists that may cast doubt on the

entity’s ability to continue as a going concern. The financial statements do not include the

adjustments that would result if the company was unable to continue as a going concern.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Trustees Annual Report for the financial year for which the

financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires

us to report to you if, in our opinion:

• the parent charitable company has not kept adequate accounting records, or returns adequate

for our audit have not been received from branches not visited by us; or

• the parent charitable company financial statements are not in agreement with the accounting

records and returns; or

• certain disclosures of Trustees' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit; or

• the Trustees were not entitled to take advantage of the small companies exemption in

preparing the Trustees’ Annual Report.

Pesh Framjee FCA

Senior Statutory Auditor

for and on behalf of

Crowe Clark Whitehill LLP

Statutory auditor

St Bride’s House

10 Salisbury Square

London

EC4Y 8EH

framjeep

Pesh Framjee

framjeep

Typewritten Text

30 April 2015

framjeep

Typewritten Text

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES FOR THE GROUP

(INCLUDING AN INCOME & EXPENDITURE ACCOUNT)

For the year ended 30 June 2014


Notes Restricted Unrestricted Year ended

30 June

2014

Year ended

30 June

2013

Incoming resources £ £ £ £

Incoming resources from generated funds

Voluntary income

Donations & similar funding 72,372 327,438 399,810 182,738

Grants 2 1,131,497 - 1,131,497 4,193,717

Membership and partnership income 274,298 1,666,894 1,941,192 1,130,928

__________ __________ __________ __________

1,478,167 1,994,332 3,472,499 5,507,383

Activities for generating funds

Other 3,702 266,723 270,425 216,185

__________ __________ __________ __________

3,702 266,723 270,425 216,185

Investment income - 3,655 3,655 86

__________ __________ __________ __________

Total incoming resources 1,481,869 2,264,710 3,746,579 5,723,654

__________ __________ __________ __________

Resources expended

Costs of generating funds

Costs of generating voluntary income 339,915 584,399 924,314 597,982

Charitable activities

Research 558,010 561,821 1,119,831 1,138,580

Communications 627,783 535,628 1,163,411 891,218

Education & engagement 768,992 280,511 1,049,503 1,380,761

__________ __________ __________ __________

1,954,785 1,377,960 3,332,745 3,410,559

Governance costs 20,745 85,365 106,110 129,933

__________ __________ __________ __________

Total resources expended 3 2,315,445 2,047,724 4,363,169 4,138,474

__________ __________ __________ __________

Net (outgoing) / incoming resources for

the period (being the net expenditure)

before other recognised gains and losses 4 (833,576) 216,986 (616,590) 1,585,180

Other recognised gains and losses

Gains / (losses) on revaluation of foreign

currency subsidiaries

26,814 - 26,814 (8,706)

__________ __________ __________ __________

Net movement in funds (806,762) 216,986 (589,776) 1,576,474

Funds at 30 June 2013

2,029,070 (90,246) 1,938,824 362,350

Transfer between funds 545,790 (545,790) - -

__________ __________ __________ __________

Funds at 30 June 2014 10 1,768,098 (419,050) 1,349,048 1,938,824

__________ __________ __________ __________

All of the above results derive from continuing activities. There are no gains and losses other than those disclosed

above. Movements in funds are disclosed in Note 10 to the financial statements.

BALANCE SHEETS COMPANY NUMBER: 4964424

As at 30 June 2014


Notes

Group

30 June

2014

Group

30 June

2013

Charity

30 June

2014

Charity

30 June

2013

£ £ £ £

Fixed assets

Tangible fixed assets 6 8,523 7,302 - -

__________ __________ __________ __________

Current assets

Debtors 7 796,615 459,416 848,403 786,887

Short term deposits 803,716 1,339,533 803,716 1,200,062

Cash at bank & in hand 1,218,795 1,586,528 890,517 1,396,291

__________ __________ __________ __________

2,819,126 3,385,477 2,542,636 3,383,240

Creditors: amounts falling due within

one year

8

(1,478,601) (1,453,955) (1,167,814) (1,198,703)

__________ __________ __________ __________

Net current assets 1,340,525 1,931,522 1,374,822 2,184,537

__________ __________ __________ __________

Net assets 9 1,349,048 1,938,824 1,374,822 2,184,537

__________ __________ __________ __________

Represented by

Restricted funds 1,768,098 2,029,070 1,793,687 2,274,735

Unrestricted funds (419,050) (90,246) (418,865) (90,198)

__________ __________ __________ __________

Total funds 10 1,349,048 1,938,824 1,374,822 2,184,537

__________ __________ __________ __________

The accompanying notes form an integral part of these financial statements.

The accounts on pages 30 to 45 were approved by the Board of Trustees and authorised for issue on 27 March

2015 and signed on its behalf by:

Phil Levermore

Chairman of the Board

CONSOLIDATED CASH FLOW STATEMENT



Year ended

30 June

2014

Year ended

30 June

2013

£ £

Net cash (outflow) / inflow from operating

activities (Note a) (903,009) 1,911,779

Returns on investment and servicing of

finance

Bank interest received 3,655 86

Capital expenditure and financial investment

Payments to acquire tangible fixed assets (4,196) (227)

(Decrease)/increase in cash (903,550) 1,911,638

Net cash at start of the year 2,926,061 1,014,423

Net cash at end of the year 2,022,511 2,926,061

NOTES TO THE CASH FLOW STATEMENT

a) Reconciliation of net outgoing / (incoming) resources to

net cash inflow from operating activities

2014 2013

£ £

Net (outgoing) / incoming resources for the year (616,590) 1,585,180

Bank interest received (3,655) (86)

Depreciation 2,242 47,083

Loss on disposal of fixed assets - 2,885

Foreign exchange differences, excluding gains arising on

revaluation of fixed assets

27,547

(9,320)

(Increase) / decrease in debtors (337,199) 50,544

Increase in creditors 24,646 235,493

Net cash (outflow) / inflow from operating activities (903,009) 1,911,779

NOTES TO THE ACCOUNTS



1 Accounting policies

a) Basis of accounting

The financial statements have been prepared under the historical cost convention and in accordance with applicable

UK accounting standards and follow the recommendations in Statement of Recommended Practice, Accounting and

Reporting by Charities (SORP 2005) and the Companies Act 2006.

The statement of financial activities (SOFA) and balance sheet consolidate the financial statements of the charity and

its subsidiary undertakings (see Note 14). The results of the charity and its five subsidiaries are consolidated on a

line-by-line basis. No separate SOFA has been prepared for the charity alone as permitted by Section 408 of the

Companies Act 2006.

Going concern

The Climate Change Organisation, like many charities, is dependent on voluntary income to meet its future

commitments. The Climate Change Organisation's ability to generate voluntary income going forward is significantly

dependent on the charity's new strategy and planned income generation from strategic partners and trusts. As

discussed in more detail in the Trustees' Report, as at March 2015 there was not sufficient committed funding in place

to allow the charity to meet its forecast liabilities for the following 12 months. If income generation targets are not met

then the charity would be unable to continue as a going concern.

However, the Trustees are content that this deficit will be made good in 2014/15, as the UK operation is forecast to

achieve very significant improvements in performance and increase unrestricted reserves over the next two financial

years.

The Trustees have considered the charity's new strategic plan and current income forecasts for 2015/16 and beyond.

The Trustees are confident that the charity's strategy for future income generation will be successful. They have

therefore prepared the Financial Statements on the going concern basis. The key issues and uncertainties in respect

of the going concern assumption are set out in the ‘Financial Risk’ section of the Trustees’ Report.

b) Income

Voluntary income is received by way of donations and gifts and is included in full in the Statement of Financial

Activities when receivable. Donated services and gifts in kind are brought in at their value to the charity as income and

the appropriate expenditure.

Income is credited to incoming resources when the conditions of entitlement, certainty and measurement have been

met. Where income relates to a specific future period, it is deferred.

Membership and partnership income is recognised in the financial statements evenly over the period to which the fee

relates.

Legacies, if received, are credited to the Statement of Financial Activities when the entitlement has been established,

the amount receivable is known and the likely date of receipt has been fixed.

NOTES TO THE ACCOUNTS (CONTINUED)



Grants for the purchase of fixed assets, if received, are credited to restricted incoming resources when received or

receivable whichever is earlier. Depreciation on the fixed assets purchased with such grants is charged against the

restricted fund.

c) Expenditure

Cost of generating funds are those costs incurred in the charity seeking voluntary contributions

Resources expended are recognised in the period in which they are incurred. Resources expended include

attributable VAT which cannot be recovered.

Resources expended are allocated to a particular activity where the cost relates directly to that activity. Remaining

support costs are apportioned to activities based on staff time, which is an estimate of the amount attributable to each

activity. Note 3 shows how support costs have been allocated to each activity.

d) Fixed assets and depreciation

Fixed assets are stated at cost and such items of equipment are capitalised where the purchase price exceeds

£1,000. Depreciation costs are allocated to activities on the basis of the use of the related assets in those activities.

Depreciation is provided on all tangible assets at rates calculated to write each asset down to its estimated residual

value on a straight line basis as follows:

Office equipment - 3 years

Furniture and fixtures - 3 years

e) Fund accounting

Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure which meets these

criteria is charged to the fund together with a fair allocation of support costs.

Unrestricted funds are donations and other incoming resources receivable or generated for the objects of the charity.

f) Governance costs

Governance costs include those incurred in the governance of the charity and its assets and are primarily associated

with compliance with constitutional and statutory requirements.

g) Pension costs

Contributions to the defined contribution scheme are charged to the statement of financial activities as incurred.

h) Operating leases

Rental costs under operating leases are charged to the SOFA on a straight line basis over the lease life.




i) Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Foreign

currency balances have been translated at the rates of exchange ruling at the balance sheet date. The results of

overseas operations are translated at the closing rates of exchange during the period and their balance sheets at the

rates ruling at the balance sheet date.




2 Grants

Restricted Unrestricted

Year ended

30 June

2014

Year ended

30 June

2013

£ £ £ £

Corporations 568,169 - 568,169 744,133

Government 67,571 - 67,571 92,324

Foundations & NGOs 495,757 - 495,757 3,357,260

__________ __________ __________ __________

1,131,497 - 1,131,497 4,193,717

__________ __________ __________ __________

3 Analysis of total resources expended

Direct

staff costs

Other

direct

costs

Total

direct

costs

Support

staff costs

Other

support

costs

Total

support

costs

Year

ended 30

June 2014

Year ended

30 June

2013

£ £ £ £ £ £ £ £

Cost of generating funds 366,480 297,118 663,598 95,515 165,201 260,716 924,314 597,982

Research 588,382 247,225 835,607 95,526 188,698 284,224 1,119,831 1,138,580

Communications 599,992 258,592 858,584 123,654 181,173 304,827 1,163,411 891,218

Education & Engagement 590,449 168,434 758,883 108,063 182,557 290,620 1,049,503 1,380,761

Governance 35,552 41,622 77,174 11,280 17,656 28,936 106,110 129,933

________ ________ ________ ________ ________ ________ _________ _________

Total 2014 2,180,855 1,012,991 3,193,846 434,038 735,285 1,169,323 4,363,169 4,138,474

________ ________ ________ ________ ________ ________ _________ _________

Total 2013 2,322,625 675,757 2,998,382 493,415 646,677 1,140,092

________ ________ ________ ________ ________ ________

Support costs are apportioned to activities based on staff time, which is an estimate of the amount of effort attributable

to each activity. Support costs include such expenditure as rent, office running costs and financial and legal services.




4 Net incoming/(outgoing) resources

is stated after charging:

Year ended

30 June

2014

Year ended

30 June

2013

£ £

Operating lease rentals – buildings 248,943 194,947

Depreciation 2,242 47,083

Fees payable to charity auditors: audit of the charity’s annual accounts 24,500 23,500

__________ __________

The Trustees received neither remuneration nor reimbursed expenses during either period.

5 Employees

Staff costs during the period amounted to: Year ended

30 June

2014

Year ended

30 June

2013

£ £

Wages & salaries 2,026,014 2,127,724

Social security costs 165,478 228,568

Employer’s pension contributions 167,566 196,250

Other staff costs 112,013 107,167

______________ ______________

2,471,071 2,659,709

Temporary staff 143,822 156,331

__________ __________

2,614,893 2,816,040 ________________ _______________

Number of employees with emoluments exceeding £60,000 2014 2013

Number Number

£80,001 - £90,000 p.a. 3 3

£90,001 - £100,000 p.a. 1 2

£100,001 - £110,000 1 -

£110,001 - £120,000 p.a. 1 1

£120,001 + p.a. 1 1




5 Employees (continued)

Retirement benefits are accruing to the nine higher paid staff under defined contribution schemes. Employer

contributions of £44,705 (2013: £58,595) were made during the year.

The average weekly number of employees (full time equivalents) during the period was as follows:

Year ended

30 June

2014

Year ended

30 June

2013

Fundraising & publicity 7.8 5.9

Research 5.6 4.0

Communications 11.0 9.6

Education & engagement 14.2 18.1

Support 10.9 10.6

Governance 1.9 1.9

___________ ___________

51.4 50.1

___________ _______

6 Tangible fixed assets

(Group)

Office Leasehold

Equipment improvements Total

£ £ £

Cost

At 1 July 2013 278,822 4,035 282,857

Revaluation on consolidation (9,002) - (9,002)

Additions 4,196 - 4,196

__________ __________ __________

At 30 June 2014 274,016 4,035 278,051

__________ __________ __________

Depreciation

At 1 July 2013 271,520 4,035 275,555

Revaluation on consolidation (8,269) - (8,269)

Charge for the period 2,242 2,242

__________ __________ __________

At 30 June 2014 265,493 4,035 269,528

__________ __________ __________

Net book value

At 30 June 2014 8,523 - 8,523

__________ __________ __________

At 1 July 2013 7,302 - 7,302

__________ __________ __________




6 Tangible fixed assets (Continued)

(Charity)

Office Leasehold

equipment improvements Total

£ £ £

Cost

At 1 July 2013 and

At 30 June 2014 193,466 4,035 197,501

__________ __________ __________

Depreciation

At 1 July 2013 and

At 30 June 2014 193,466 4,035 197,501

__________ __________ __________

Net book value

At 30 June 2014 - - -

__________ __________ __________

At 1 July 2013 - - -

__________ __________ __________

7 Debtors

Group

30 June

2014

Group

30 June

2013

Charity

30 June

2014

Charity

30 June

2013

£ £ £ £

Trade debtors 415,465 267,182 255,755 257,662

Other debtors 35,869 39,223 483 8,390

Due from subsidiary companies - - 265,109 387,514

Prepayments 62,934 82,785 44,709 63,095

Accrued income 282,347 70,226 282,347 70,226 __________ __________ __________ __________

796,615 459,416 848,403 786,887 __________ __________ __________ __________




8 Creditors: amounts falling due within one year

Group

30 June

2014

Group

30 June

2013

Charity

30 June

2014

Charity

30 June

2013

£ £ £ £

Trade creditors 131,822 101,218 112,027 84,740

Taxation & social security 62,869 48,143 52,318 38,420

Other creditors 25,000 34,107 19,791 18,699

Due to subsidiary companies - - - 27,707

Accruals 122,323 118,687 62,935 54,654

Short term loans 450,000 450,000 450,000 450,000

Deferred income 686,587 701,800 470,743 524,483

__________ __________ __________ __________

1,478,601 1,453,955 1,167,814 1,198,703

__________ __________ __________ __________

Deferred income

At 1 July

2013

Released to

incoming

resources

Deferred in

the year

At 30 June

2014

£ £ £ £

Membership 491,328 (491,328) 445,743 445,743

Grants 33,155 (33,155) 25,000 25,000

__________ __________ __________ __________

Charity total 524,483 (524,483) 470,743 470,743

The Climate Group Inc 154,443 (154,443) 210,169 210,169

The Climate Group (Hong Kong) Limited 22,874 (22,874) 5,675 5,675

__________ __________ __________ __________

Group total 701,800 (701,800) 686,587 686,587

__________ __________ __________ __________




9 Analysis of net assets between funds (Group)

Restricted

funds

Unrestricted

funds

Total

funds

£ £ £

Tangible assets 8,523 - 8,523

Current assets 2,148,678 670,448 2,819,126

Current liabilities (389,103) (1,089,498) (1,478,601)

__________ __________ __________

Net assets 1,768,098 (419,050) 1,349,048

__________ __________ __________

Analysis of net assets between funds (Charity)

Restricted

funds

Unrestricted

funds

Total

funds

£ £ £

Current assets 1,872,011 670,625 2,542,636

Current liabilities (78,324) (1,089,490) (1,167,814)

__________ __________ __________

Net assets 1,793,687 (418,865) 1,374,822

__________ __________ __________




10 Movement in funds (Group)

At 1 July

2013

Incoming

resources

Outgoing

resources

Transfers and

exchange

At 30 June

2014

differences

Restricted Funds £ £ £ £ £

Agile Cities 21,300 - (21,300) - -

Bringing Light to India’s Rural Poor 2,253,435 - (586,892) - 1,666,543

Clean Revolution Website - 25,000 (25,000) - -

States and Regions - 125,075 (56,239) - 68,836

LED - 71,171 (54,659) - 16,512

Climate Week NYC - 10,818 (44,851) 34,033 -

Bijli – Clean Energy for All - - - 41,795 41,795

We Mean Business - 60,102 (60,102) - -

Climate KIC - 63,876 (63,876) - -

2,274,735 356,042 (912,919) 75,828 1,793,686

China Programme 21,617

357,309 (514,460) 93,314 (42,220)

Hong Kong Programme (266,409)

54,226 (258,051) 476,148 5,914

US Programme (14,881)

696,125 (611,734)) (71,138) (1,628)

Australia Programme - 501 (501) - -

India Programme 14,008

17,666 (17,780) (1,548) 12,346

_________ __________ __________ __________ __________

Total restricted funds 2,029,070 1,481,869 (2,315,445) 572,604 1,768,098

Unrestricted funds (90,246) 2,264,710 (2,047,724) (545,790) (419,050)

_________ __________ __________ __________ __________

Total funds 1,938,824 3,746,579 (4,363,169) 26,814 1,349,048

_________ __________ __________ __________ __________

Total incoming resources for the charity were £2,696,564 (2013: £4,323,592) and the deficit for the year was

£809,715 (2013: £1,982,562 surplus).

NOTES TO THE ACCOUNTS



10 Movement in funds of the Group (continued)

Purpose of funds

Agile Cities

Funding to better address the challenges of smart city innovation. Its objective

is to understand and overcome barriers to procuring smart ICT products and

services in cities through a two-phase program.

Bijli – Clean Energy for

All

Funding to reduce greenhouse gas emissions and enhance the lives of rural

inhabitants across three states in India by deploying renewable energy

technologies in addition to identifying sustainable off-grid electrification models

whilst addressing the challenges of scalability.

Clean Revolution Website Funding to develop the Clean Revolution website which is integral to our

support and mentoring for the Clean Revolution Ambassadors.

States and Regions Funding to engage state and regional government members to promote low

carbon policy development.

LED Funding to investigate key remaining barriers to scale up of LED public lighting

and to produce recommendations for action.

We Mean Business Funding to develop a powerful business coalition to advocate ambitious climate

action; funding provided to develop the RE100 campaign and to support

CWNYC.

Climate Week NYC Funding to enable delivery of the 5th Annual Climate Week NYC event.

Convening business, government and civil society leaders and communicating

their action through a strategic media and digital campaign.

Climate KIC Funding to develop a smart city pilot in Tianjin and to support the EPPA project

investigating a European index of building Energy Performance Certification.

China Programme Funding to engage China’s government, cities and businesses.

India Programme Funding to engage India’s government, cities and businesses.

Hong Kong Programme Funding to engage Hong Kong’s government, cities and businesses.

US Programme Funding to develop The Climate Group's outreach to US state governments,

cities and businesses. The programme includes the development of

relationships with key US states, cities and corporations.

Australia Programme Funding to engage Australia’s government, cities and businesses.




11 Taxation

The Climate Change Organisation has charitable status and as such is partially exempt from tax on its income and

gains to the extent that they are applied to its charitable objects.

12 Related party transactions

There were no related party transactions during the 12 month period to 30 June 2014.

13 Leasing commitments

The annual commitments under non cancellable operating leases are as follows:

2014 2013

Land and Land and

Buildings Buildings

£ £

Expiring within 1 year 87,932 126,946

Expiring between 1 and 2 years 86,964 84,832

Expiring between 2 and 5 years 17,492 -

========= =========

14 Subsidiaries

Advantage has been taken of the exemptions available under FRS8 from the disclosure of certain intra group

transactions. The charity is represented by legal entities incorporated in the United States (registered on 5 March

2004), Australia (registered on 19 May 2005), China (registered on 7 December 2007) and Hong Kong (registered on

10 January 2008). The charity also has a trading subsidiary in the UK called The Climate Change Organisation

Services Ltd (registered on 1 May 2007). These entities operate in close conjunction with the UK charity with a

relationship maintained via places on the boards for members of the charity’s management team. All of these entities

have a year-end date of 30 June except for the Chinese entity which has a 31 December year end due to local

regulations.

United States – The Climate Group Inc

2014 2013

Net assets as at 1 July 2013 £(14,717) £(53,082)

Income for the year to 30 June 2014 £762,761 £684,966

Net surplus for the year to 30 June 2014 £13,089 £38,365

Net assets as at 30 June 2014 £(1,628) £(14,717)




14 Subsidiaries (continued)

Australia – The Climate Group Limited

China – The Climate Group (China) Limited

Hong Kong – The Climate Group (Hong Kong) Limited

UK – The Climate Change Organisation Services Limited

India – The Climate Group (India) Limited

2014 2013

Net assets as at 1 July 2013 £- £164,535

Income for the year to 30 June 2014 £501 £18,829

Net deficit for the year to 30 June 2014 £(501) £(164,535)

Net assets as at 30 June 2014 £- £-

2014 2013

Net assets as at 1 July 2013 £125,374 £93,963


Net surplus/(deficit) for the year to 30 June 2014 £(170,068) £31,411

Net assets as at 30 June 2014 £(44,694) £125,374

2014 2013

Net assets as at 1 July 2013 £(266,409) £(88,184)


Net (deficit)/surplus for the year to 30 June 2014 £(175,371) £(178,225)

Net assets as at 30 June 2014 £(441,780) £(266,409)

2014 2013

Net assets as at 1 July 2013 £66 £100

Income for the year to 30 June 2014 £16 £2

Net deficit for the year to 30 June 2014 £(142) £(34)

Net assets as at 30 June 2014 £(76) £66

2014 2013

Net assets as at 1 July 2013 £14,008 £36,973

Income for the year to 30 June 2014 £17,666 £-

Net (deficit)/surplus for the year to 30 June 2014 £(1,662) £(22,965)

Net assets as at 30 June 2014 £12,346 £14,008

Documents

THE CLIMATE CHANGE ORGANISATION · THE CLIMATE CHANGE ORGANISATION t/a Annual Report and Accounts 2013/14 12 months to 30 June 2014 COMPANY NUMBER: 4964424 ... up of clean and reliable