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2020-12-31-accounts

Annual Report and Financial Statements For the year ended 31 December 2020 Charity Registration no. 1053988

Company Registration no. 2863827 (England and Wales)

CLIENTEARTH

LEGAL AND ADMINISTRATIVE INFORMATION

Trustees H Covington (Chair)
G Stratenwerth (Treasurer)
F Beinecke
H Bruhn
S Butler-Sloss
B Eno
S Hockman
P Joubert
W McIntosh
S Medina Gomez
D Mokhtarzadeh (Appointed 19 November 2020)
A Razzouk (Appointed 19 November 2020)
Sir Martin Smith
Dr E Ugirashebuja (Appointed 19 November 2020)
Charity number 1053988
Company number 2863827
Principal address The Joinery
34 Drayton Park
London
N5 1PB
Registered office 10 Queen Street Place
London
EC4R 1BE
Auditor Arram Berlyn Gardner LLP
30 City Road
London
EC1Y 2AB

CLIENTEARTH

CONTENTS

Page
Trustees' report 1 - 30
Independent auditor's report 31 - 34
Statement of financial activities 35
Statement of financial position 36
Statement of cash flows 38
Notes to the financial statements 39 - 67

ClientEarth Annual Report and Financial Statements, 2020

ClientEarth is an environmental charity with a unique approach - we use the law to create powerful change and a future where people and planet thrive together.

“Once something becomes law, it becomes actionable and enforceable. Shortly afterwards, it becomes ‘common sense’. It becomes possible for a small group of people to use the law to trigger big changes. The task is pretty daunting but the rewards are huge.”

— Brian Eno, musician, artist and ClientEarth trustee

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ClientEarth Annual Report and Financial Statements, 2020

ClientEarth Trustees’ Report (including Directors’ and Strategic Report) For the year ended 31 December 2020

The trustees (who are also the directors of ClientEarth for the purposes of company law) present their report and accounts for the period ended 31 December 2020. The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the Companies Act 2006 and the Statement of Recommended Practice, ‘Accounting and Reporting by Charities’, FRS102 (effective 1 January 2015).

The charity is a company limited by guarantee and is governed by its memorandum and articles of association. The trustees, who are also the directors for the purpose of company law, who served during the period, were:

Charity Registration No. 1053988 Company Registration No. 2863827 (England and Wales)

Company Secretary / Legal Advisors: Bates Wells, 10 Queen Street Place, London, EC4R 1BE ClientEarth principal address: The Joinery, 34 Drayton Park, London, N5 1PB ClientEarth registered address: 10 Queen Street Place, London, EC4R 1BE

Auditors: Arram Berlyn Gardner LLP, 30 City Road, London EC1Y 2AB

Bankers: HSBC, 16 King Street, London WC2E 8JF / Barclays, 1 Churchill Place, London, E14 5HP Tax advisors: BDO, 2 City Place, Beehive Ring Road, Gatwick, West Sussex, RH6 0PA

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ClientEarth Annual Report and Financial Statements, 2020

Contents

About ClientEarth ...................................................................................................................... 4 Introduction from Howard Covington, Chair of ClientEarth Board of Trustees .................. 5 Our Strategic Approach - a note from CEO and Founder, James Thornton ......................... 6 An overview of ClientEarth’s work ........................................................................................... 6 Public benefit ........................................................................................................................... 10 Achievements and performance in 2020................................................................................ 10 Detailed performance review .................................................................................................. 12 Monitoring, evaluation and learning....................................................................................... 21 Structure, governance and management ............................................................................... 22 Climate Change and Environmental Policy ........................................................................... 24 Remuneration ........................................................................................................................... 24 Risk management .................................................................................................................... 25 Fundraising ............................................................................................................................. 25 People ....................................................................................................................................... 26 Equality, diversity and inclusion (EDI) ................................................................................... 27 Financial review ....................................................................................................................... 27 Reserves policy ........................................................................................................................ 28 Trustees’ responsibilities ........................................................................................................ 29

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ClientEarth Annual Report and Financial Statements, 2020

About us

At ClientEarth, we’re focused on creating seismic change. We can take on governments, hold businesses to account, change financial markets. One well-placed, hard-won legal victory can change the system. Enough of them can change the future. That future can be one in which people and planet thrive together. It’s not only possible, it’s essential. It’s this vision that we fight for every single day, using the most powerful tool citizens have: the law.

We work on behalf of citizens. We fight to strengthen citizen’s laws and work to ensure that all citizens can usefully access them.

We work in partnership. We work in coalition with local individuals, communities, NGOs and other organisations, merging our experience with their on-the ground expertise.

We build better foundations. We work with businesses to create robust legal frameworks, and train experts to uphold them.

We secure stronger laws. We work with legislators to strengthen planned laws and improve existing ones.

We hold power to account. We monitor how laws are implemented and upheld, and force corporations and governments to be wholly accountable for their actions.

We change the game. We mount high-profile campaigns that change the conversation and force action.

We get results. We aim to achieve the greatest possible impact and create precedents that can be taken up worldwide.

We go after the worst-offending institutions and industries where we can have the greatest impact: coal, plastics, finance, forests, chemicals and much more. We choose strategic targets and actions that set powerful precedents, creating opportunities for others to follow suit. Wherever we work, and whatever we’re tackling, our approach is the same: establish citizens’ access to the law, work in local partnership, and use our expertise to strengthen and defend the laws that protect people and planet.

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ClientEarth Annual Report and Financial Statements, 2020

Introduction from Howard Covington, Chair of ClientEarth’s Board of Trustees

Like all people and organisations across the world, ClientEarth felt the impact of the pandemic during 2020. As the world went into lockdown we were forced to move swiftly into a remote model of working. Our people have responded magnificently under very difficult circumstances and I would like sincerely to thank them for coping so well. I’m deeply proud of the way that ClientEarth has supported our team so that they could continue to work at the highest standard and we will continue to prioritise their wellbeing well into the future.

The year was also one of global reflection on the issue of racism. At ClientEarth we have redoubled our own focus on equality, diversity and inclusion (EDI). We established an EDI committee of the Board to ensure that this subject is on the agenda at every Board meeting and are undertaking development of an EDI and long-term strategy. I look forward to reporting in detail on progress in future years.

It is to the credit of the staff, leadership, donors and supporters of ClientEarth that in spite of the pandemic we were able to keep operating effectively, increase our impact and position ourselves for future success. The environmental clock is ticking and if we want to deliver on our vision of a future in which people and nature thrive together, the coming years are critical. We are therefore working hard to scale up our efforts.

We were fortunate that while many charitable organisations were forced to scale back their operations in 2020, we were able to grow significantly, with our spend on operations increasing by 15%. We started scoping work in in the Americas and set ourselves for the launch of our office in Singapore, one year ahead of schedule. We will continue to look for opportunities for our impact.

Thanks to the skill and dedication of its people and the generosity of it supporters, ClientEarth is in the strongest position it has ever been to make the systemic change that we so need to see in the world.

Howard Covington, Chair

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ClientEarth Annual Report and Financial Statements, 2020

Our strategic approach – a note from CEO and Founder, James Thornton

While the global COVID pandemic affected us all in 2020, it was with great pride that I watched the ClientEarth staff manage to stay focused on delivering work that will make the world a better, healthier place to live for all of us.

We now have a team of more than 220 people at ClientEarth, working in our eight offices and bringing together a range of professional and life experiences. Naturally, we have a wealth of legal expertise but that expertise in itself is wide-ranging, covering environmental law, human rights, company and financial law and much more. Our lawyers come from 26 jurisdictions.

The experience of our people covers international development, large law practice, academia, government, campaigning, diplomacy, science, the cultural sectors and many other areas. This is by design: I have always believed that one of the keys to innovation is bringing together people with different viewpoints and perspectives to find new ways of addressing big problems. We encourage collaboration, critical thinking and an entrepreneurial approach to developing and delivering strategies.

This approach is delivering results. We have, for instance, pioneered the application of company law in the fight against climate change. And by encouraging people to share across teams and practice areas, these approaches are now being applied to tackle issues related to human health, biodiversity and marine protection. The pioneering work that our people are doing builds tools for the environment sector as a whole.

As they innovate, though, it’s important that our people to do so within a framework. We use the same framework now that I have applied at ClientEarth from day one, always keeping a number of key factors in mind in order to ensure that we provide the highest possible impact and make the best use of the funding that we have available:

Importance: Our actions must focus on the most serious environmental threats.

Impact: Our actions must have fair prospects of success and any action must contribute to systemic change in tangible ways.

Leverage: We must focus on interventions where ClientEarth can directly target the problem, advance solutions, or create systemic change.

Venue: We must find the right venues in which to act, assessing a range of factors from political situation to rule of law. New venues may at times need to be created.

Space: ClientEarth can bring a distinctive and non-duplicative approach, perspective and expertise to the field. The positive work of other actors can be supported and amplified.

By setting this clearly defined framework we create the space and opportunity for our people to develop new approaches and ways of thinking that allow for creative application of that most powerful of tools: the law. We also ensure that our work delivers impact and contributes to the collective efforts of the environmental movement as whole.

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ClientEarth Annual Report and Financial Statements, 2020

An overview of ClientEarth’s work

Ending coal power

There’s no doubt: coal power is the biggest contributor to the climate crisis. We intend to end coal – globally. We block coal-fired plants and mines, both planned and existing. We defend communities’ rights to protect their homes and ecosystems. We win ground-breaking legal victories that cut coal off from the finance it needs to continue business as usual. We work to open the space and create the right market conditions so that renewable energy can thrive.

Since ClientEarth started its work, we have:

Plastics: preventing oil’s ‘plan B’

Each year, about 335 million tonnes of plastic is produced – equivalent to the combined weight of every human on the planet. Making a single plastic bottle uses the energy equivalent to filling it a quarter-full of oil. As energy generation moves away from fossil fuels, plastics are fast becoming the biggest driver of oil demand – but we’re fighting it. In Belgium, Europe’s largest petrochemical company plans to build a €3billion plant. We’re using the power of the law to shut down construction before it can begin.

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The future of the world’s forests

Since 1990, the world has lost areas of forest equivalent to the size of South Africa. Forests are a critical piece of the battle against climate change, home to some of the world’s most diverse ecosystems. We’re working to protect our forests for the communities that rely on them and for generations to come. We’re focused on reducing demand and supply. Less demand means less deforestation: we secure tougher laws and enforcement in countries where illegal timber (and other forest products) end up. We also prevent illegal logging at source, collaborating with local communities, legal experts and NGOs.

Saving our seas

About 820 million people worldwide depend on fishing for their livelihoods. Oceans are essential to life on earth. But the threats they face are many: chemical and plastic pollution, overfishing, loss of biodiversity, global heating and acidification. We work across 12 different legal frameworks to achieve our aims: making sure marine laws are robust, and enforced. We push for better fisheries management and responsible fishing practices. We tightened EU-wide plastics legislation to reduce devastating marine pollution. We also established the powerful Sustainable Seafood Coalition – now a beacon of best practice for the industry worldwide.

Coming clean about chemicals

60% of all chemicals in production are hazardous to the environment, and 40% to human health. Behind the scenes, powerful corporations are lobbying hard to block or delay regulation that would prevent contamination of our water, soil and air. We’re taking them on. With other NGOs, we secured a radical change: under new law, EU institutions must publish their studies on the safety of chemicals that end up in our food, including pesticides – telling the public the truth about their harmful effects.

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ClientEarth Annual Report and Financial Statements, 2020

Cleaner air, liveable cities

Breathing polluted air causes around 400,000 early deaths across the EU each year. We’re working with citizens and organisations to slash illegal air pollution and realise a new vision of cities with people at their heart. In the UK, ClientEarth has won three major court cases against the government, forcing action to drastically improve air quality. A ban on the sale of petrol and diesel cars from 2030 has been announced in the UK. In Germany, we brought more than 40 cases, forcing a radical shift towards electric. We’re helping clean up Krakow’s air with wins that have banned domestic burning of wood. Now we’re working in Belgium, Hungary, Bulgaria and Poland to ensure they follow suit.

Changing the terms of business

Scientists warn that we have just 10 years to stop global warming going above 1.5 degrees, beyond which drought, floods and extreme heat will affect hundreds of millions of people worldwide. Meeting the goals of the Paris Agreement – the first universal, legally binding agreement to keep global warming to well below 2ºC – will require radical change in our laws, economies, policies and businesses. But political and corporate will is often too weak or too slow for the task.

We’re working to ensure governments establish climate laws, plans, policies and targets to meet their commitment to the Agreement, monitoring, and challenging the worst-performing countries to slash their emissions.

We’re focusing on corporations too, ensuring companies are responsible under law for the emissions and climate change they create. We’ve thwarted plans to build Europe’s largest gas plant and forced BP to pull its multimillion pound greenwashing campaign.

Next, we’re focusing on sources of finance for climate-destroying industries. Our influence persuaded the European Investment Bank to end all lending to fossil fuels in 2021. We’re pressuring the pension sector to come clean to investors about the extent of their investment in projects that are fuelling climate change.

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Public benefit

The charity has had regard to the Charity Commission's guidance on public benefit. The main aim of the charity is to promote the protection of the environment to the benefit of broad sections of the public where the charity operates, and on a global basis, for current and future generations. The public benefit of the charity includes:

Our public benefit is further illustrated in this report through the Achievements and Performance section of this report.

Achievements and performance in 2020

Highlights from 2020

  1. BP’s advertising pulled: Two months after our complaint about its ‘Possibilities Everywhere’ advertising campaign, BP cancelled the campaign, and agreed to end all “corporate reputation advertising”. This was an important win against one of the world’s biggest carbon emitters. The OECD’s opinion in our case recognised our legitimate interest in the matter and that the issues raised were material and substantiated. This win opens the door to further use of the OECD Guidelines to tackle corporate greenwashing.

  2. Protecting the Kresna Gorge: Following our action, the Bulgarian Government withdrew its request for EU funding for the Struma motorway through the Kresna Gorge. If this had gone ahead, it would have decimated an area of outstanding natural beauty, and key habitat. The move followed pressure from on the European Commission to push the Bulgarian authorities to answer tough questions about their compliance with the Habitats Directive.

  3. Challenging Europe’s biggest emitter: We made progress in our action against the Bełchatów coal plant, the largest greenhouse gas emitter in Europe, which puts out more greenhouse gases each year than New Zealand. The judge ordered the company to sit down with us, giving them 90 days to reach an agreement on how and when to close the plant.

4. Leading the way on State Aid: Our work on State Aid brought many victories that will pave the way for the energy transition in Europe. We continued to use State Aid complaints to the Commission as a powerful lever against fossil fuel subsidies. Our intervention stopped Bulgaria from adopting subsidies that would have propped up coal plants. Due to our efforts, Greece

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abandoned a capacity mechanism proposal that would favour lignite and fossil gas generation and financially unviable plants.

5. Overfishing cases: We wrote sustainability into the Common Fisheries Policy when it was revised in 2013. In 2020 our Fisheries Team initiated ground-breaking cases to enforce this fundamental obligation under the Common Fisheries Policy, after years of EU-level advocacy toward sustainable fishing, the arrival of the 2020 deadline, and the EU’s failure to achieve that requirement.

  1. Tackling the fossil fuel industry’s plan B: The fossil fuel industry has a Plan B: as oil and gas are moved out of the market due to climate change, they plan to shift them over to plastics manufacture, greatly increasing plastics while continuing their greenhouse emissions. As part of our strategy to challenge fossil fuel infrastructure, including against plastics, we launched legal proceedings against the new EUR 3bn petrochemicals facility that INEOS intends to build in the port of Antwerp, Belgium. This is a vital piece of work that will carry into 2021 and tackle climate change, plastic pollution and the destruction of nature.

  2. Legal protection for African forests: After more than eight years of work by ClientEarth’s legal experts and our local partners, the Republic of Congo has passed a new law to help ensure more sustainable management of the country’s vast forests. Forests in the central African nation form part of the Congo Basin – the largest tropical rainforest in the world after the Amazon. This law has the potential to preserve forests and combat forest exploitation and illegal logging.

  3. Fighting for EU citizens’ environmental rights: We have been fighting to get citizens allowed into EU courts for 12 years. We will soon succeed in getting part of what we want. The European Commission has published a proposal to amend the regulation that governs citizen access to the EU courts (the Aarhus Regulation). Once adopted, it will allow NGOs to challenge non-legislative acts in the EU courts. This is a direct result of our complaint to the UN Aarhus Convention Compliance Committee in 2008, which found against the EU in 2017, and of our maintaining constant pressure on the EU institutions and Member States since then.

  4. Supporting China-EU biodiversity ambitions and alignment: The work of the teams in supporting China and the EU toward a meaningful biodiversity COP continued this year. We are proving to be a vital link between these powers. Just one example is our role co-hosting a series of virtual workshops with the Office of the Executive Committee for CBD COP15 on biodiversity on behalf of the EU – China Environment Project. The workshops focused on dialogue towards the post-2020 Global Biodiversity Framework to be agreed upon at COP15 in Kunming next year, which is a key element of the EU-China cooperation that is vital if COP15 is to be a success.

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Detailed performance review

Rule of Law

We work to ensure that the legal system enables public and environmental interests to be duly considered in decision making at local, national and international levels. We believe this will result in environmental justice placed in the heart of international trade agreements, post-Brexit UK’s environmental governance, China’s law and policy, as well as at EU level and across the EU’s Member States.

Environmental democracy in the EU

Our legal interventions proved effective at enforcing the Aarhus Convention rights to access environmental information, public participate in decision-making and access to courts. Following our complaints:

We also began advocacy on the EU Climate Law for ClientEarth at the organisational level. The European Parliament has already adopted a position that reflects most of our asks, including exact text on transparency and access to justice.

Environmental rule of law in China

We continued to support the Chinese Government and Judiciary to put in place a robust environmental law system and to strengthen China’s accountability and leadership in global environmental governance:

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of China subsequently pulled out of the Tapanuli hydropower dam in Indonesia, following our efforts to highlight the environmental impacts of the project.

International trade and UK environment

International trade agreements

Our calls are ongoing for modernisation of the EU’s standard set of sustainable development provisions for trade agreements, and for environmental issues to sit at the top of the EU’s trade agenda:

UK Environment

We maintained our position as experts on the post-Brexit framework for environmental governance:

Climate and the Paris Agreement

Mitigating greenhouse gas emissions, in line with the Paris Agreement goals, is one of the major challenges facing society today. States and companies are failing to rise to the challenge and time is running out. We work to establish the duties of States and companies to reduce their emissions and to ensure financial flows are consistent with the Paris Agreement.

Climate Accountability

As part of our corporate accountability work we successfully defended an appeal affirming that the planned Ostrołęka C coal power plant in Poland poses major financial risks to shareholders due to climate change. The plant operator companies wrote down a PLN 2 billion loss related to the project, the

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stock price went up indicating that the market agrees with our position. An estimated 160 million tonnes of CO2 emissions have been avoided and an international precedent on the legal risks of stranded assets was established.

We also opened the door to the use of the OECD’s Guidelines on Multinational Enterprises to tackle corporate greenwashing, making a complaint about BP’s ‘Possibilities Everywhere’ advertising campaign. Two months later BP announced cancellation of the campaign and agreed to end all ‘corporate reputation advertising’.

In our State accountability work we made great strides in integrating climate transition considerations into planning policy in the UK: We obtained an appeal judgment in our case regarding the Government’s decision to approve construction of Europe’s largest gas plant. This sets an important legal precedent confirming climate policy must be taken into account in assessing major energy projects. At the local level, we saw several local authorities commission comprehensive assessments of potential emissions reduction policies. This follows our letters to 100 local authorities highlighting their legal obligation to support delivery of the net zero target through local planning policy.

Climate finance

We maintained our work with financial institutions, encouraging them to recognise climate risk in their portfolios:

Energy transition

The EU’s energy system contributes the vast majority of the bloc’s climate-harming emissions. We are accelerating the closure of coal plants across Europe, improving legal, policy and regulatory frameworks to remove the market barriers for a greener, fairer and de-centralised energy market, and to ensure public spending supports a just transition.

Fossil Fuel Infrastructure

We continued our legal strategy to eliminate coal in Europe and played a central role in the Europe Beyond Coal campaign:

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In 2020 we expanded our work. Firstly we built legal capacity in Serbia through the establishment of a first-of-its-kind environmental law clinic, with the country's leading environmental lawyer training the next generation. Secondly, we began work on other industrial activities beyond coal, for example targeting the fossil fuel industry’s Plan B - a large-scale shift to plastics manufacture – which would entail greenhouse gas emissions equivalent to coal.

EU Energy Systems and State Aid

As legal experts we made a significant contribution to the civil society voice at EU level for a just and fair energy transition. Many of our proposals were integrated in the updated texts of the EU Clean Energy for all Europeans Package (CEP), and we successfully argued for inclusion of the ‘energy efficiency first’ principle in the EU’s methodology for assessing the adequacy of its energy system. We also contributed to the implementation of CEP provisions on prosumers and energy communities - for many countries the participation of citizens in the energy system is a novelty, yet it is critical to an expedient transition.

Despite the EU’s 2020 State of the Energy Union report confirming that subsidies to fossil fuels should end, a number of Member States continue to pay out huge sums of State aid to coal and gas energy producers across Europe without adequate scrutiny. We have had a number of successes in this area:

Human health

The air we breathe, the food we eat, and the water we drink are all polluted. The WHO estimates that almost a quarter of all deaths globally are linked to environmental factors. We work to

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minimise the use of harmful chemicals and plastics to safeguard everyone’s right to breathe clean air; and to ensure a healthier, sustainable agriculture model in the EU.

Clean Air, Transport, and Cities

Our legal advocacy and litigation work kept air quality a top issue in our target jurisdictions, despite temporary drops in pollution levels caused by COVID-19 lockdowns:

The EC concluded a major review of EU air quality laws, taking on board our recommendations and acknowledging the key role of ClientEarth’s work in ensuring the reduction of air pollution in Europe. The EU Green Deal included a commitment to align EU air quality limit values more closely with WHO guidelines. We are ideally placed to influence the content of the revised laws.

Harmful Chemicals

We achieved a landmark success this year when the European Parliament vetoed the illegal authorisation of lead in PVC, using this power for the first time in history. We also built support in the Parliament to pursue a challenge to the exceptions to the ban on chromium trioxide, a chemical that causes cancer and gene mutation.

In October, the EC published its Chemicals Strategy for Sustainability containing everything that we had asked for in our studies and recommendations on closing the gaps in EU chemical regulation that threaten people and the environment. The EC workplan shows they relied heavily on our documents. Subsequent legal analysis we produced has set the stage for us and our allies to push for changes in the upcoming review of the EU’s regulation of endocrine disrupting chemicals.

This year we defended the European Chemicals Agency (ECHA) against abusive industry litigation, intervening in two cases to support ECHA’s regulation of toxic chemicals. The first case was the third attempt by a plastics association to reverse the classification of BPA as a substance of very high concern. The EU General Court found in ECHA’s favour, relying explicitly on our arguments. The second ongoing case concerns GenX chemicals - the replacement for Teflon - known as “forever chemicals” because they cannot fully degrade.

We also contributed to an ambitious EU restriction on the intentional use of microplastics, securing a recommendation from an ECHA body for more stringent testing before a material can be considered “biodegradable”.

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Forests land conversion and trade

Globally, forests have decreased by 129 million hectares in 25 years. We build the legal capacity of civil society to influence forest law reform to ensure more sustainable and equitable forest governance. We work on the implementation and enforcement of legislation on illegal logging and advocating for the development of new requirements for companies placing commodities associated with deforestation on the EU and UK market.

After more than eight years of advocacy by ClientEarth and partners, the Republic of Congo passed a new law to ensure the sustainable management of the country’s vast forests. This law contains new provisions to preserve forests and combat forest exploitation and illegal logging, we well as provisions about community forestry. This marks a big step forward in regulating and protecting climate-critical forests.

We continued to empower local communities to steward forest management - our community guides for Congo and Liberia are assisting local populations to negotiate fair agreements with companies logging in the forests they depend on for their livelihoods. We supported a legal challenge by local partners to oppose a proposed bauxite mine in Ghana’s Atewa forest that would destroy much of the forest. We hope this case will send a strong message to investors and companies, as well as develop our partners’ capacity to undertake litigation.

We maintained our reputation as a leading NGO on forestry issues with EU officials inviting us to discuss our comments on the EU’s review of its timber import regulations. We also worked with our partner Climate Advisors, to lay the foundations for innovative use of non-environmental laws within the EU (tax, customs, consumer protection) to crack down on illegal trade in timber and other forest products. Similarly, our calls for the UK Government to adopt a “due diligence” standard to address its environmental footprint overseas have become a core element of ongoing advocacy efforts with NGO partners.

Oceans

One of the biggest impacts humans have on the ocean is through fishing, and unsustainable fishing continues to be the most immediate and significant threat in European waters. Marine ecosystems face the additional pressure of plastics pollution, which is a growing threat. We work to ensure sustainable fishing and promote stronger laws to reduce plastic supply and make producers bear the real cost of plastic on the environment.

Fisheries and seafood

The EU failed to meet its binding 2020 deadline to end overfishing, as agreed in the 2013 Common Fisheries Policy. Since citizens cannot yet bring cases against the EU in EU courts we launched two national court cases in France and Ireland requesting a preliminary reference to the EU Court of Justice. The aim is to set ground-breaking precedent on enforcing legislative deadlines for action on nature and climate.

We also secured greater transparency in EU fisheries as a key step in ensuring the EU and Member States follow the law. Following our successful complaint to the European Ombudsman on the lack of transparency around the setting of catch limits, the EC is now making all of its proposals, and the

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underlying justifications, public. The European Ombudsman also found in our favour on transparency around EU fisheries control – the enforcement of EU rules to stop illegal fishing and overfishing. Another important win came at the end of the year when the European Parliament’s Environment Committee accepted our suggested amendments to the revised Fisheries Control Regulation.

In our seafood work, the UK Sustainable Seafood Coalition (SSC) members collectively advocated for the inclusion of sustainability as an objective of UK post-Brexit fisheries legislation. Although the amendment failed, this first exercise in political advocacy has built the capacity of the SSC to more in the future. In Spain we established ourselves with NGOs and national authorities as the key experts on matters related to EU fisheries law, using this position to support the Fisheries Team’s work on the Control Regulation. Our work with Spanish retailers in the Plataforma por la Sostenibilidad Pesquera led to improvement in supermarkets’ compliance with EU labelling rules.

Marine habitats and plastics

We successfully delayed the new EUR 3bn petrochemicals facility that INEOS plans to build in the port of Antwerp, Belgium by at least 12 months by challenging the environmental impact assessments. In January 2021, INEOS indefinitely suspended one of the two planned installations. We aim towards full cancellation and will use this as an iconic exemplar for other companies creating excess supply of plastic products.

We continued to work with the Rethink Plastic Alliance to ensure that the new package of EU plastics legislation is transposed and that the EC rejected a definition of ‘plastics’ in the Directive that would have rendered the Directive useless. EC Vice-President Timmermans publicly announced at the height of the COVID crisis that there would be no watering-down of the Single-Use Plastics Directive (due to be transposed by 2021). As a result of work done by the Link Coalition, of which we are a key member, bans on certain single-use plastic items (stirrers, straws, and cotton buds) came into force in the UK on 1 October 2020.

Wildlife

Biodiversity is under increasing threat; 1 million species of plants and animals face extinction, many within decades. We enforce EU biodiversity laws and hold Member States to account. Agricultural spending amounts to almost 40% of the whole EU budget, yet the sector does not really engage in mitigating climate change nor biodiversity decline. We use advocacy and litigation to align the Common Agriculture Policy (CAP) with EU environment legislation.

Wildlife and habitat loss

We focused attention on preparing for the CBD COP15 and the delivery of a legal strategy to protect precious habitats and wildlife across Europe. Together with other NGOs, we successfully advocated for a pledge by the EU to protect 30% of its land and seas by 2030, which will form part of their negotiating position for the COP.

Our legal action has resulted in successes in our target countries:

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concerned improper adoption of the Habitats Directive in national law. Romania has been given two months to remedy the situation before they face another reasoned opinion.

Agriculture

Since beginning to work on agriculture in 2019, we swiftly established our position as legal experts in relevant Brussels networks and are now a member of the civil society group working on the Common Agricultural Policy (CAP) Reform, as well as the EU Food Policy Coalition. This legitimacy has enabled us to engage in legal advocacy at EU-level calling for the alignment of the CAP and the European Green Deal.

We shared a set of amendments to the CAP with Members of the European Parliament (MEPs). Although a number of these did not pass, the engagement was very fruitful; we persuaded entire delegations to vote in line with our positions. This is a clear signal that MEPs can be positively influenced and that working with the Parliament is an effective way of bringing about change.

We exposed concerns about the Special Committee on Agriculture (SCA) - an administrative body. The CAP’s legislative work goes straight from the SCA to the council of ministers, circumnavigating other bodies, potentially undermining the integration of the CAP with EU climate, biodiversity and environmental policies. Our briefings shed light on the peculiar status of the SCA, which was highlighted by the Vice President of the EC in reaction to our briefing.

Challenges in 2020

Covid-19

During 2020 the impacts of the Covid-19 pandemic were faced across the organisation. Programme delivery was of course disrupted, especially advocacy where face-to-face contact is most impactful. We overcame some obstacles with the creative use of online tools to keep stakeholders engaged, such as webinars and our ClientEarth summit, which gave us the opportunity to bring together over 100 partners, donors and others from across the environmental world. When it came to decision-making processes, however, we were unable to physically attend meetings at the EU or national level, which impacted the effectiveness of our engagement with a number of institutions.

Of further concern was the distraction from the climate and biodiversity emergencies that resulted from the pandemic, making it difficult to maintain momentum with some stakeholders. Nature conservation legislation in Hungary, Romania and Slovenia was rolled back during the pandemic; short-term reductions in pollution levels triggered authorities to attempt to water down clean air targets; and COVID

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ClientEarth Annual Report and Financial Statements, 2020

has created an impression that plastic packaging is safer, with public funding allocated to plastic producers.

In response, we are strongly advocating the need for a green recovery, countering the industry position of a no-strings-attached bail-out, and we are communicating climate and biodiversity as twin crises to reunite engagement and action. We have also adjusted our climate finance strategy to focus on shifting the behaviour - rather than mindset - of financial institutions.

Erosion of the Rule of Law

A rapidly declining respect for the rule of law has also been a challenge faced by many of our programmes. During 2020 our concerns about the independence of the judiciary and shrinking the space in which civil society can operate increased considerably in Poland, Hungary, Bulgaria, Romania, Slovenia, Serbia, Ireland, and the UK

We will be dedicating greater capacity to rule of law actions in countries where the space for civil society to operate is shrinking, and we will use our presence in Brussels to use EU law mechanisms. For example, there is currently a debate on the EU recovery budget being made conditional upon Member States meeting rule of law criteria. We will engage in legal advocacy to ensure that any future conditionality mechanism is as strong as possible to prevent further contraventions of Aarhus rights in the EU.

At the EU level, a lack of access to justice before EU courts has remained a major obstacle to our work, particularly in relation to EU decisions, which cannot be challenged in national courts. Similarly, there is little transparency in relation to energy markets, where information can be denied for alleged confidentiality reasons, or and State aid, where the European Commission is secretive and public consultations are rare. Opening the door for civil society access to the EU Courts will be crucial for us.

Getting the timing of legal interventions right is of critical importance and we were sometimes hampered by not being able to gather causal evidence (evidence that documents a relationship between an activity and its outcomes) to support innovative litigation, or difficulties in finding experts who are not representing industry interests. For example, it became impossible to scope climate accountability cases in Greece as we were unable to gather evidence establishing the link between pollution and individual health outcomes. We are now fostering relationships with experts who can help to generate causal evidence that stands up in court, and who will collaborate with NGOs rather than big industry, so we are ready to rapidly respond to opportunities.

The general approach of the current UK government to some environmental issues has made our work in the UK harder. The lack of progress on fisheries prevented us from making advocacy plans; there was push-back on a legally binding commitment to WHO guideline levels of air pollution; and it was unclear whether/how the UK would reproduce the EU’s complex chemical-regulation system. We are being responsive, assessing urgency on a case-by-case basis, however, since the UK has lost its strategic importance as a global player following Brexit, we are/will shift some of our attention and resources to Europe.

Managing growth

We know that we are in one of the most important decades in human history and that unless there is concerted, systemic action on climate change, a future in which people and nature thrive together is

20

ClientEarth Annual Report and Financial Statements, 2020

unlikely. We have proved that our unique approach has a key role to play in delivering just the kind of systemic change that we need to see.

The organisation has grown consistently since its inception 14 years ago and in the last five years our income roughly doubled. This growth has allowed us to scale our impact significantly and has been supported by our donors, who recognise the efficacy of our work. This support from donors continues and we will continue to explore opportunities for growth that will deliver greater impact. However, consistent and rapid growth presents organisational challenges, from time spent on recruitment through to implementing the new systems and processes required for us to operate at greater scale.

We have set ourselves limits on our growth, particularly in terms of restricted income and staff numbers, which will ensure that our focus remains on delivering impact. Any growth of the own organisation will be guided by strategic imperative and high leverage opportunities. We will continue to prioritise scaling impact through our partners, using their existing infrastructure and ensuring that we are scaling-up the whole environmental movement not just our own organisation.

Future plans

At an organisational level we will undertake a significant piece of work on an updated long-term vision and five year strategy, while also spending time to reassert our values, ensuring that they are well embedded across the whole organisation and that they continue to orient the way that we approach our work.

We will place major emphasis on managing the short and long-term effects of the COVID pandemic. While we have so far seen little effect on our income as a result the impact on the wider economy, we are mindful of the potential for significant economic downturn and recession in some of our main fundraising markets. Significant support will be given to our Development team as they develop new income streams in order to mitigate the risk and impact of any major economic downturn. In addition to managing any financial challenges related to the pandemic, we will also continue to focus heavily on ensuring the wellbeing of our staff. We will continue to provide high-levels of support, open up learning and development opportunities and implement a more systematic approach to working from home.

Developing a longer-term approach to equality, diversity and inclusion (EDI) will be a key theme and we will undertake a full EDI audit so that have a measurable baseline from which to improve and we have data to inform the development of a long-term EDI strategy. The Board, the senior leadership team and staff are all committed to delivering long-term, meaningful change and we expect to make significant progress towards that goal in 2021.

Programmatically we will continue to build our work in Asia, with a particular focus on challenging existing and new fossil fuel infrastructure, while also doubling down on our efforts in Europe. In addition to challenging the use of coal for generating power, we will also challenge the use of gas and petrochemicals in both geographies, taking on what has been described as ‘the fossil fuel industry’s Plan B’.

We will build the use and application of our corporate and finance tools, such as our pioneering work on the materiality of environmental risks in corporate reporting and management, and on greenwashing, among multiple teams, including plastics, seafood, and fisheries. We have also prioritised the development of further corporate-focused regulations and tools at the EU-level.

21

ClientEarth Annual Report and Financial Statements, 2020

We will work on a number of cross-cutting themes and issues, such as the green recovery generally from the COVID pandemic, governance and the rule of law issues in a number of key jurisdictions and the connection between our work and environmental justice.

Monitoring, evaluation and learning

From late 2019, ClientEarth embarked on an organisation-wide project to align monitoring, evaluation and learning (MEL) processes toward overarching organisational goals. The existing MEL processes were specific to each programme area and aligned primarily to the programmatic objectives or goals set in the five-year strategy. Moreover, the majority of monitoring focused heavily on the activities and output of the programmes with only limited ability to evidence the longer-term impact of the work. While this decentralised approach evolved organically in response to the growth of our programmatic work, it has been recognised that a new process is needed to ensure maximum cohesion between the different areas of work.

We are now developing four measurement frameworks to correspond to the four areas of impact of ClientEarth’s programmes - climate, nature, human health and rule of law. Each team can have impact in any of the four areas, allowing us to better capture, analyse and understand the connections among different programmes and geographies and to more holistically communicate on the impact of the organisation, ensuring high levels of accountability internally and externally. The new measurement frameworks will be finalise and rolled out in early 2021.

Structure, governance and management

The charity is a company limited by guarantee and is governed by its memorandum and articles of association.

The trustees, who are also the directors for the purpose of company law, who served during the period are listed on page 2.

None of the trustees has any beneficial interest in the company. All of the trustees are members of the company and guarantee to contribute £10 in the event of a winding up.

ClientEarth’s governance is undertaken by the trustees, who meet four times a year. There are four board committees, covering finance and investment, governance, CEO performance and remuneration, and equality, diversity and inclusion. The Finance and Investment Committee meets four times a year ahead of board meetings, the Governance Committee and Equality, Diversity and Inclusion Committee also meet four times a year. The Remuneration Committee meets on an ad hoc basis.

New trustees are appointed by the Board through the Governance Committee. They are selected on the basis of their sympathy with ClientEarth's charitable objects and their ability to further them as a trustee. The Governance Committee actively considers skills gaps in the Board of Trustees and seeks to fill these with any new appointments. New trustees are elected by resolution and approved by a majority of trustees where a Board quorum is present.

New trustees are provided with an induction material containing relevant information regarding the charity, including the governing document, latest management reports and financials, together with relevant guidance on the role and responsibilities of trustees.

22

ClientEarth Annual Report and Financial Statements, 2020

In 2021, Trustees will implement their plans to gradually move to new term limits. The intention is that trustees will serve three-year terms. Trustees are eligible to remain on the Board for up to two terms. A final term can be extended by the Board in special circumstances in order to meet a skill or experience gap.

The trustees are responsible for setting the overall programmatic and financial strategy of the charity and for approving the annual budget, but delegate the day-to-day management to the chief executive officer (CEO), James Thornton, who is supported by a senior leadership team (SLT).

ClientEarth Offices

ClientEarth has its headquarters in the UK, and a number of offices throughout the world: Belgium, Germany, Luxembourg, Poland, Spain, the USA and China. In addition, it operates in many countries throughout Europe, Central and Eastern Europe, Central and Western Africa, and Asia Pacific through partners and sub-grantees.

The charitable work of the organisation is structured by programme, which are led by programme heads or programme leads. This programme-centric structure is distributed across the offices without reference to geographical location, so that teams may be dispersed in more than one office. This structure is complemented by staff in geographic locations that can bring local expertise and a strategic perspective on the strategic issues in the region. The London headquarters accommodates the majority of the core functions of the charity such as the CEO’s office, finance, development, communications, human resources and administration teams.

In December 2020 ClientEarth established a trading subsidiary ClientEarth Trading Ltd in the UK with a registered number 13095280. ClientEarth is the sole member of the company. It is intended that the subsidiary will be carrying out small-scale primary purpose trading activities which directly further the charity's charitable objects.

ClientEarth in Europe

----- Start of picture text -----
Country Legal Form Year of
Formation
Belgium ClientEarth AISBL International non-profit 2018
association (AISBL)
Belgium ClientEarth ASBL Branch of ClientEarth Limited 2008
(currently
inactive)
France ClientEarth France French Foundation 2011
(currently
inactive)
Germany ClientEarth gGmbh Limited Liability Company 2018
Luxembourg ClientEarth ASBL (previously Non-profit association 2017
EarthRights Luxembourg ASBL)
Poland Fundacja ClientEarth Prawnicy Polish Foundation 2016
dla Ziemi
Spain Branch of ClientEarth Limited
----- End of picture text -----

23

ClientEarth Annual Report and Financial Statements, 2020

UK ClientEarth Trading Limted Trading subsidiary of
ClientEarth Limited		 2020
ClientEarth in China
Country Legal Form Year of
Formation
China ClientEarth (UK) Beijing
Representative Office		 Representative Office of
ClientEarth Limited		 2017

There is a related, independent ClientEarth entity in the US, ClientEarth USA Inc., which operated as a 501(c)(3). There is also a related independent entity in Germany, ClientEarth – ANWÄLTE DER ERDE, which operates as a Registered Association

Climate Change and Environmental Policy

ClientEarth is committed to reducing energy consumption and waste by encouraging staff to adopt sustainable practices and behaviours in the office. As such the overarching principle guiding our Environmental Policy is that our own actions will be aligned to our programmatic aims. The policy includes guidance in facilities management, recycling waste management, procurement and travel.

In 2020 the carbon emissions from all business related travel were measured and then offset with a Gold Standard-certified environmental project[1] selected by staff.

ClientEarth’s Environmental Policy and the principles are endorsed by the Senior Leadership Team and can be found on the ClientEarth website. The Deputy Chief Executive is accountable for the policy and it is subject to periodic review.

Remuneration

Attracting, retaining and motivating employees is critical to delivering on ClientEarth's mission. This is supported by a process which benchmarks our salary scales against similar roles generally within the charitable sector in the countries in which we work.

The organisation has an annual review process where performance against objectives is evaluated and staff may be awarded an increase in pay if appropriate. The reviews and any pay awards are conducted in accordance with the policy framework agreed by the Remuneration Committee and within the salary budget agreed annually by the Board.

1 Gold Standard was established in 2003 by WWF and other international NGOs to ensure projects that reduced carbon emissions featured the highest levels of environmental integrity and also contributed to sustainable development.

24

ClientEarth Annual Report and Financial Statements, 2020

The CEO's salary is set by the Remuneration Committee, a sub-committee of our Board of Trustees, and is approved by the whole Board. The Committee includes specialists with significant organisational management expertise and knowledge, including in the charity sector.

Risk management

The trustees are responsible for the oversight of the risks faced by the organisation. A risk register identifies the major financial, regulatory, governance, external, operational and reputational risks to which the charity is exposed, assesses their likelihood and potential impact, and details the mitigation measures that are a) already in place and b) necessary to implement. The trustees of the Governance Committee review this risk register on behalf of the Board at each Board meeting and consider any further steps which may be necessary to manage the risks, highlighting key issues to the full Board as relevant. Then once a year, the full Board will examine the register in detail.

The trustees consider the most serious risks to which the charity is exposed at present to be:

Fundraising

The Covid 19 pandemic had a dramatic impact on ClientEarth’s fundraising activity but despite this, we have seen a strong performance of all our existing income channels. Our biggest challenge continues the balance of restricted and unrestricted funds, we continue to diversify our funder base and we have made progress in strengthening our capacity to ensure that unrestricted income continues to grow whilst monitoring the speed of growth in our restricted income. Despite the good results, 2020 of course posed many challenges in terms of fundraising.

With the constraints around in-person meetings and events of all kinds, the Development team redesigned its programmes of regular events and pivoted to online cultivation via a series of webinars in early March. This events programme has grown ever since and enabled us to stay in touch with our donors and ensure that despite the circumstances, we were able to communicate about our work.

Over the months we have seen rising attendance numbers and our events programme culminated in a public, three-day online summit that saw over 800 people sign up and listen in. As a result, we have seen strong loyalty and support especially from existing major donors who generously renewed their gifts. Whilst our ability to meet and build relationship with new donors was inhibited, we were encouraged by the fact that in 2020 our major donor income exceeded our target.

In order to strengthen our financial sustainability and widen our sources of unrestricted income, we have also continued to build our digital fundraising capacity throughout the year. In 2020, we employed our first dedicated digital fundraiser and have grown our base of regular supporters that give via Direct Debit to now over 1,300, almost a doubling in numbers. We also saw the highest numbers of cash gifts online we have ever received. This was in direct response to our first coordinated online appeal in the run up to Christmas, and exceeded our target for online income. We have more than doubled our total income

25

ClientEarth Annual Report and Financial Statements, 2020

online compared to last year and exceeded target, and as a result have ambitious targets to grow digital income further in the year come.

Our fundraising from foundations and trusts has also stayed on course and we were able to solidify the funding of major programmes through the generous support of grant making institutions. Our restricted fundraising was therefore on target and we continue to widen our network globally and seek to reflect ClientEarth’s global footprint not just in our work but also in our fundraising.

During the year, ClientEarth also benefited from a deeper relationship with the People’s Postcode Lottery, a long term funder of our work. We were invited to become a Promoting Society and as a result benefited from three lottery draws that raised over £2m for our work. This was a one off opportunity that has had tremendous impact on our programmes and also enabled us to invest in strengthening our fundraising capacity and brand awareness.

2020 was also the year where we embarked on our first major, specific fundraising campaign for our ambitions to halt coal and enable the clean energy transition in Asia. This appeal has the long term aim to raise $100m over ten years, and the first major contribution of $2m building on the foundation gift by the Children’s Investment Fund Foundation was made by the Grantham Foundation.

To ensure ClientEarth can continue on its growth trajectory, we will continue to strengthen our unrestricted fundraising, and aim to grow our network of trusts and foundations internationally. As a result, we continue to build the capacity of our team: both our digital fundraising team and our business development is growing and we also are investing in our capacity to manage our funds well and to highest standard. Whilst 2020 posed many challenges in terms of building new relationships, with our focus on online events and online fundraising, we were able to make headway and build a strong foundation for the future. We have used the time to improve our processes and infrastructure, to ensure our technology and way of working reflects the growing target and budget needs. The key challenge for 2021 is to keep momentum and ensure we find ways to grow our networks in creative ways given the ongoing uncertainty of Covid 19 and its impact.

Fundraising statement:

ClientEarth employs an in-house development team who specialise in philanthropy and grants fundraising. ClientEarth does not employ any third-party professional fundraisers (either individuals or organisations) and has no commercial partners contributing to fundraising efforts.

ClientEarth is registered with the Fundraising Regulator. The charity has not received any complaints about fundraising activities. In addition to philanthropy and grants fundraising, ClientEarth offers members of the public the opportunity to donate through its website, and is committed to fundraising in a way that meets the expectations of the public and respects the rights of all individuals.

People

Since the onset of the pandemic in March 2020, one of our key areas of focus was on the wellbeing of our people in all our offices. The global COVID pandemic was a physical health crisis but increasingly it impacted on mental health and wellbeing as an outcome of social constraints, different and often challenging work-life pressures and general uncertainty and insecurity.

26

ClientEarth Annual Report and Financial Statements, 2020

During the year, we carried out regular ‘staff pulse surveys’ to gauge wellbeing levels and to provide the senior leadership team with reliable and timely feedback upon which to base decisions on how to best support our people during these unprecedented times. Average of 93% of our people felt they were being kept informed and an average of 95% of our people felt supported overall. These figures were consistent and very encouraging.

We focused our efforts on providing the IT infrastructure to quickly enable people to work from home, along with an extensive range of on-line training activities to support these news ways of working, to promote the health and wellbeing of our people and to combat social isolation.

We launched our new learning and development framework during the year and this aimed to provide a more holistic and joined-up approach to learning, development and career progression. This new learning and development framework covered all aspects of learning from global induction and standard setting, to learning new skills and acquiring new knowledge in order to progress through the organisation, share knowledge and learning, and meet our ambitious aims and objectives.

As our organisation continued to grow, during the year we advertised 97 jobs, received 5283 applications, carried out 430 interviews and made 83 job offers.

Equality, diversity and inclusion (EDI)

ClientEarth is committed to promoting equality, good diversity management and providing an inclusive working environment for all our staff, volunteers and interns.

Underpinned by leadership from our trustees, our senior leadership team (SLT) and an EDI plan, we have embarked on a journey to realise our commitment through the establishment of a Global EDI Committee, an SLT EDI sub group and a Board EDI Committee. This gives us a strong infrastructure to support our commitment to anti-racism, equality, diversity and inclusion across all the countries in which we work.

To promote and raise awareness of EDI matters among our people, we have delivered 16 EDI and unconscious bias sessions to staff and have facilitated 20 anti-racism and anti-discrimination training sessions over the last year. We have incorporated EDI thinking into our HR activities across recruitment and selection practices and wellbeing initiatives based on an analysis of reliable data.

Have also created an extensive EDI resource centre for our staff and will be offering paid work placements aimed at people of colour this year. ClientEarth has representation on an external EDI Group with a number of other environmental charities and is part of the Steering Group for a State of Diversity in the Environment Sector project.

Looking forward into 2021, we intend to engage a consultant to undertake an EDI audit early in the year and the findings of this audit, supported by diversity data for trustees, staff and extensive recruitment metrics will inform our planned 3-5 year Global Equality, Diversity and Inclusion Strategy that will be launched later in 2021.

Financial review

In 2020 we secured income of £20,791k, a growth of 30% in underlying income. Total income is lower than total income in 2019 of £29,489k, due to the significant one-off gift in 2019 (underlying income was £15,890k). As in previous years, most of our income is in the form of restricted grants funding our

27

ClientEarth Annual Report and Financial Statements, 2020

charitable activities. These grants come from private foundations and governmental agencies, predominantly based in the UK, Europe and the USA and are restricted to specific projects. In addition, 10% of income came from lottery operations in the last quarter of 2020 to support key programmes in 2021.

Total expenditure increased by 19% to £16,850k (2019: £14,198k), with increased charitable activities expenditure across key programmes including Energy Transition, Forests and Wildlife protection.

Managing key financial risks

Financial resilience: over recent years, we have focused on diversifying income streams to reduce our reliance on key donors. In 2020 we continued to invest in increasing our profile and digital fundraising, secured funding from new philanthropy and foundation donors, and became a registered agent for the People's Postcode Lottery. We continue to monitor our income mix, in particular to manage the risk of growing restricted income faster than unrestricted impacting our ability to cover core costs.

Impact of the Covid-19 pandemic: in March, we modelled the potential impact on fundraising, and on our ability to implement our charitable activities. In response to this risk we took steps to reduce unrestricted costs and ensured we could allocate funds to support staff well-being and remote working.

Reserves policy

The charity's reserve policy considers the financial risks that the charity is exposed to, and sets the target level of free reserves accordingly at 25% of annual internal expenditure (defined as total annual expenditure, less sub-grant and litigation costs). The target level of free reserves at the end of 2020 is £3,629k.

Reserves are held to cover unexpected falls in income, to provide bridging funding between grants, to provide rapidly deployable seed funding for new initiatives, and to cover cash flow needs, especially where grants are paid in arrears.

Overall Reserves at the end of 2020 were £26,045k (2019: £20,882k), made up of:

Unrestricted Reserves

Restricted Reserves of £8,144k (2019: £5,164k)

28

ClientEarth Annual Report and Financial Statements, 2020

Reserves review:

Unrestricted reserves:

At the end of 2020 a net unrestricted surplus of £825k boosted unrestricted Reserves to £4,372k which, after £326k tied up in Fixed Assets leaves £4,046k of Free Reserves. This strong performance enabled the charity to exceed its free reserves target of £3,629k, and plan for Fixed Asset spend in 2021.

Designated reserves:

At the end of 2019 the trustees resolved to designate £12,171k of the generous unrestricted GilmourSamson gift, to be used over the medium term to fight climate change and build the capacity of the organisation. During 2020 £1,096k. was spent on programme initiatives and capacity building. In 2020 lottery operations generated a net unrestricted income of £2,024k due to be spent during 2021, which the trustees resolved to carry over as designated funds for specific charitable purposes.

Restricted reserves:

We spent down restricted funds received in prior years, and secured new funding, finishing 2020 with a higher total balance of restricted funds (£8,144k; 2019: £5,164k). This includes grant funding received at the end of the financial year for charitable activities in 2021.

Trustees' responsibilities statement

The trustees (who are also directors of ClientEarth for the purposes of company law) are responsible for preparing the Trustees’ Annual Report (including the Strategic Report) and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

 there is no relevant audit information of which the charitable company’s auditor is unaware; and

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ClientEarth Annual Report and Financial Statements, 2020

The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Disclosure of information to the auditors

We, the directors of the company who held office at the date of approval of these Financial Statements as set out above each confirm, so far as we are aware, that:

In approving the Trustees' Annual Report, we also approve the Strategic Report included therein, in our capacity as company directors.

On behalf of the board

………………………

H Covington, Trustee

21 June 2021 Date………………….

Beijing

Berlin Brussels

London Los Angeles Luxembourg Madrid Warsaw

ClientEarth is a charity registered in England and Wales, number 1053988, company number 02863827. EU Transparency register 96645517357-19. ClientEarth US is a registered 501(c)(3) organization - EIN 81-0722756. KRS 0000364218.

30

CLIENTEARTH

INDEPENDENT AUDITOR'S REPORT TO THE TRUSTEES OF CLIENTEARTH

Opinion

We have audited the financial statements of ClientEarth (the ‘parent charitable company and subsidiaries’) for the year ended 31 December 2020 which comprise of the consolidated statement of financial activities, consolidated and charitable company statement of financial activities, consolidated cash flow statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the accounts in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the trustees' annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

CLIENTEARTH

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF CLIENTEARTH

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Act 2011 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees' (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group's and parent charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group and parent charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

CLIENTEARTH

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF CLIENTEARTH

We assessed the susceptibility of the charitable company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

Through these procedures, we did not identify any material actual or suspected incidents of fraud.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

CLIENTEARTH

INDEPENDENT AUDITOR'S REPORT (CONTINUED) TO THE TRUSTEES OF CLIENTEARTH

Use of our report

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 and to the charitable company’s trustees, as a body, in accordance with regulations made under section 154 of the Charities Act 2011. Our audit work has been undertaken so that we might state to the charitable company’s members and its trustees 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 charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Sarah Wilson FCA (Senior Statutory Auditor) for and on behalf of Arram Berlyn Gardner LLP

24/6/2021

.........................

Chartered Accountants Statutory Auditor

30 City Road London EC1Y 2AB

CLIENTEARTH

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Designated
funds
funds
2020
2020
Notes
£
£
Income and endowments from:
Donations and legacies
3
3,287,840
-
Charitable activities:
4
18,302
-
Investments
5
56,998
98,108
Other income
6
2,115,431
-
Total income
5,478,571
98,108
Expenditure on:
Raising funds
813,215
243,255
Charitable activities:
8
1,816,709
1,743,267
Total resources expended
2,629,924
1,986,522
Net gains/(losses) on investments
12
-
1,221,976
Net incoming resources before
transfers
2,848,647
(666,438)
Gross transfers between funds
(2,023,742)
2,023,742
Net movement in funds
824,905
1,357,304
Fund balances at 1 January 2020
3,547,561
12,171,179
Fund balances at 31 December
2020
4,372,466
13,528,483		 Restricted
funds
2020
£
1,295,492
13,842,628
-
75,908
15,214,028
112,719
12,121,070
12,233,789
-
2,980,239
-
2,980,239
5,163,537
8,143,776		 Total
2020
£
4,583,332
13,860,930
155,106
2,191,339
20,790,707
1,169,189
15,681,046
16,850,235
1,221,976
5,162,448
-
5,162,448
20,882,277
26,044,725		 Total
2019
£
17,893,574
11,413,578
30,985
150,827
29,488,964
814,430
13,384,050
14,198,480
-
15,290,484
-
15,290,484
5,591,793
20,882,277

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

CLIENTEARTH

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

Notes
Fixed assets
Intangible assets
13
Tangible assets
14
Investments
15
Current assets
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within
one year
17
Net current assets
Total assets less current liabilities
Income funds
Restricted funds
19
Designated funds
20
Unrestricted funds		 2020
£
3,868,189
10,257,183
14,125,372
(1,162,924)		 £
72,131
253,797
12,756,349
13,082,277
12,962,448
26,044,725
8,143,776
13,528,483
4,372,466
26,044,725		 2019
£
£
29,892
136,876
-
166,768
1,733,312
19,404,501
21,137,813
(422,304)
20,715,509
20,882,277
5,163,537
12,171,179
3,547,561
20,882,277		 2019
£
£
29,892
136,876
-
166,768
1,733,312
19,404,501
21,137,813
(422,304)
20,715,509
20,882,277
5,163,537
12,171,179
3,547,561
20,882,277
166,768
20,715,509
20,882,277
5,163,537
12,171,179
3,547,561
20,882,277

21 June 2021

The financial statements were approved and authorised for issue by the Board on .........................

.............................. H Covington (Chair) Trustee

Company Registration No. 2863827

CLIENTEARTH

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2020

Notes
Fixed assets
Intangible assets
13
Tangible assets
14
Investments
15
Current assets
Debtors
16
Cash at bank and in hand
Creditors: amounts falling due within
one year
17
Net current assets
Total assets less current liabilities
Income funds
Restricted funds
19
Designated funds
20
Unrestricted funds		 2020
£
3,740,607
9,514,570
13,255,177
(1,220,070)		 £
72,131
230,208
12,756,349
13,058,688
12,035,107
25,093,795
7,634,048
13,528,483
3,931,264
25,093,795		 2019
£
£
29,892
136,876
-
166,768
1,697,950
18,002,675
19,700,625
(257,333)
19,443,292
19,610,060
restated
4,974,289
12,171,179
2,464,592
19,610,060		 2019
£
£
29,892
136,876
-
166,768
1,697,950
18,002,675
19,700,625
(257,333)
19,443,292
19,610,060
restated
4,974,289
12,171,179
2,464,592
19,610,060
166,768
19,443,292
19,610,060
restated
4,974,289
12,171,179
2,464,592
19,610,060

A separate statement of the financial activities and Income & Expenditure accounts are not presented for the charity itself following the exemptions permitted by section 408 of the Companies Act 2006 and paragraph 397 of the SORP. The total incoming resources for the charity for the period ended 31 December 2020 were £20,286,414 (2019: £27,925,106) with the positive movements in funds being £5,483,735 (2019 £14,122,113).

21 June 2021 The financial statements were approved and authorised for issue by the Board on .........................

.............................. H Covington (Chair) Trustee

Company Registration No. 2863827

CLIENTEARTH

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020

2020
Notes
£
£
Cash flows from operating activities
Cash generated from operations
27
2,995,207
Investing activities
Purchase of intangible assets
(65,988)
Purchase of tangible fixed assets
(186,954)
Purchase of investments
(20,640,959)
Proceeds on disposal of investments
8,596,270
Interest received
155,106
Net cash (used in)/generated from
investing activities
(12,142,525)
Net cash used in financing activities
-
Net (decrease)/increase in cash and cash
equivalents
(9,147,318)
Cash and cash equivalents at beginning of year
19,404,501
Cash and cash equivalents at end of year
10,257,183		 2019
£
£
15,049,181
-
(13,426)
-
-
30,985
17,559
-
15,066,740
4,337,761
19,404,501		 2019
£
£
15,049,181
-
(13,426)
-
-
30,985
17,559
-
15,066,740
4,337,761
19,404,501
15,066,740
4,337,761
19,404,501

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

Charity information

ClientEarth is a private company limited by guarantee incorporated in England and Wales. The registered office is 10 Queen Street Place, London, EC4R 1BE. The principal place of business is The Hothouse, 274 Richmond Road, London, E8 3QW.

1.1 Accounting convention

The accounts have been prepared in accordance with “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)” (published October 2019). The charity is a Public Benefit Entity as defined by FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

The accounts have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2 Going concern

At the time of approving the financial statements, the trustees have a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus the trustees continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3 Charitable funds

Unrestricted funds are available for use at the discretion of the trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.

Designated funds comprise unrestricted funds which have been voluntarily set aside at the discretion of the trustees for specific purposes. The purposes and uses of the designated funds are set out in the notes to the financial statements.

Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.

1.4 Incoming resources

Income is recognised when the charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Legacies are recognised on receipt or otherwise if the charity has been notified of an impending distribution, the amount is known, and receipt is expected. If the amount is not known, the legacy is treated as a contingent asset.

Value added tax is not recoverable by the charity, and as such is included in the relevant costs in the Statement of Financial Activities.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

(Continued)

Income from grants are recognised at fair value when the charity has entitlement after any performance conditions have been met, it is probable that the income will be received and the amount can be measured reliably. If entitlement is not met then these amounts are deferred.

Grants received with both a restricted and unrestricted purpose are allocated on receipt directly into the correct fund and are not transferred between restricted and unrestricted funds.

1.5 Resources expended

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

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

Support costs comprising the salary and overheads costs of the central function are apportioned to each activity on the following per capita basis:

Costs of generating funds 10%
Rule of Law 13%
Climate 10%
Energy Transition 22%
Pollution & health 14%
Forests 10%
Oceans 10%
Wildlife 11%
2019 comparatives
Costs of generating funds 7%
Rule of Law 18%
Climate 11%
Energy Transition 20%
Pollution & health 15%
Forests 10%
Oceans 11%
Wildlife 8%

Value added tax is not recoverable by the charity and as such is included in the relevant costs in the Statement of financial activities.

Governance costs include all costs of compliance with constitutional and statutory requirements, including legal, audit fees and the costs of board meetings.

1.6 Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Software

20% straight line

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

(Continued)

1.7 Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment 20% straight line Computers 20% straight line

1.8 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in income/ (expenditure for the year, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9 Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits with banks, other investments with original maturities of three months or less, and bank overdrafts.

1.10 Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

(Continued)

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.

1.11 Employee benefits

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

The charity operates a defined contributions pension scheme. Contributions are charged in the accounts as they become payable in accordance with the rules of the scheme.

1.12 Foreign exchange

Transactions denominated in foreign currencies are recorded at the rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. All differences are included in net outgoing resources.

1.13 Accumulated funds

Restricted funds are subject to specific conditions by donors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the accounts.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

1 Accounting policies

(Continued)

1.14 Basis of Consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

The consolidated financial statements incorporate those of ClientEarth and all of its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All financial statements are made up to 31 December 2019. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

2 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

Income recognition

Income from grants are recognised at fair value when the charity has entitlement after any performance conditions have been met, it is probable that the income will be received and the amount can be measured reliably. If entitlement is not met then these amounts are deferred. The key area of judgement relates to entitlement of grants that have funding tranches, other conditions may need to be met before the charity is entitled to future tranches.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

3 Donations and legacies

Unrestricted Restricted Total Unrestricted Restricted Total
funds funds funds funds
2020 2020 2020 2019 2019 2019
£ £ £ £ £ £
Donations and gifts 3,287,840 1,295,492 4,583,332 17,298,621 594,953 17,893,574

Total 2020 £ 18,302 13,842,628 13,860,930 Total 2019 41,927 11,371,651 11,413,578
Wildlife protection £ - 613,892 613,892 250 999,697 999,947
Oceans protection £ - 626,016 626,016 1,600 873,355 874,955
Forests £ - 1,595,366 1,595,366 14,991 1,476,124 1,491,115
Pollution & health £ 1,090 1,676,355 1,677,445 - 2,032,032 2,032,032
Energy transition £ - 4,235,175 4,235,175 - 2,710,832 2,710,832
Climate and the Paris agreement £ 17,037 2,306,326 2,323,363 24,872 1,647,510 1,672,382
Rule of law £ 175 2,789,498 2,789,673 214 1,632,101 1,632,315
Charitable activities: Analysis by fund Unrestricted funds Restricted funds For the year ended 31 December 2019 Analysis by fund Unrestricted funds Restricted funds
4

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

5 Investments

Unrestricted Endowment
funds
funds
designated
2020
2020
£
£
Income from investments
-
98,108
Interest receivable
56,998
-
56,998
98,108
6
Other income
Unrestricted
Restricted
Total Unrestricted
funds
funds
funds
2020
2020
2020
2019
£
£
£
£
Rental income
30,339
-
30,339
40,620
Litigation awards
31,366
-
31,366
64,028
Memberships
-
75,908
75,908
-
Income from absorption
of new entities
28,090
-
28,090
-
Insurance claims
-
-
-
443
Lottery income
(a)
2,023,742
-
2,023,742
-
Other income
1,895
-
1,895
641
2,115,431
75,908
2,191,339
105,731
For the year ended 31
December 2019
105,731
45,096
(a)
Lottery income
Lottery Ticket Sales
6,344,423
Lottery Prizes
(2,537,769)
Lottery Operation Costs
(1,782,912)
2,023,742		 Total Unrestricted
funds
2020
2019
£
£
98,108
-
56,998
30,985
155,106
30,985
Restricted
Total
funds
2019
2019
£
£
-
40,620
-
64,028
45,304
45,304
-
-
(207)
236
-
-
641
45,096
150,827
150,827		 Total Unrestricted
funds
2020
2019
£
£
98,108
-
56,998
30,985
155,106
30,985
Restricted
Total
funds
2019
2019
£
£
-
40,620
-
64,028
45,304
45,304
-
-
(207)
236
-
-
641
45,096
150,827
150,827
30,985
Total
2019
£
40,620
64,028
45,304
-
236
-
641
150,827
150,827

Lottery income is the proceeds of lotteries held by the external lottery manager for the People's postcode lottery. ClientEarth has no ability to alter the ticket price, prizes or management charge and therefore, does not act as principal for these draws. Proceeds have therefore been recognised as net of prizes and other expenditure.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

7 Top Five Donors

Included within income are the following top 10 donors:

£
Children's Investment Fund Foundation 5,084,221
People's Postcode Lottery (PPL) 2,023,742
Grantham Foundation 1,688,011
Department for International Development (DFID) 1,078,401
Bloomberg via European Climate Foundation (ECF) 715,635
The Wellspring Philanthropic Fund 579,482
EU funding (EU Life; EU Life+; GOPA; Horizon 2020) 529,711
The Tilia Fund 505,025
The AKO Foundation 500,000
European Climate Foundation (ECF) 487,785
Other donors 7,275,991

20,468,004

Total 2020 £ 10,523,753 325,651 1,140,103 545,557 1,461,222 363,174 164,870 171,776 1,406,052 232,075 12,720 409,500 93,782
Support Costs 2020 £ 994,527 46,683 77,465 8,747 6 21,212 27,253 17,175 199,234 110,096 12,633 53,235 12,192
Govern - ance costs 2020 £ 36,071 2,010 954 - - 13 - 450 4,253 35,420 - - -
Wildlife 2020 £ 934,649 22,283 51,914 6,055 12,307 7,109 7,635 14,079 108,828 8,030 9 36,855 8,440
Oceans 2020 £ 902,559 20,431 78,808 5,383 30,532 3,230 9,546 8,827 75,322 7,067 8 32,760 7,503
Forests 2020 £ 1,037,284 29,634 401,209 5,383 4 213,676 42,703 10,251 85,321 7,097 8 32,760 7,503
Pollution & health 2020 £ 1,386,746 37,125 70,368 95,041 381,346 17,315 12,805 25,209 179,493 10,820 12 49,140 11,254
Energy Transition 2020 £ 2,173,541 54,984 99,650 205,828 732,437 24,780 28,181 45,043 319,804 18,103 20 81,900 18,756
Climate 2020 £ 1,082,957 42,172 43,525 147,758 277,477 8,004 8,968 20,622 146,819 8,156 9 36,855 8,440
Rule of Law 2020 £ 1,240,146 42,619 178,737 64,634 27,108 56,233 10,321 17,025 129,745 9,803 11 45,045 10,316
Charitable activities: Cost of generating funds 2020 £ Personnel & recruitment
735,273		 Holiday pay
27,710		 Consultants/ external assistance
137,473		 Sub-grants
6,728		 Litigation costs
5		 Travel, events and meetings
11,602		 Publications, subscriptions & memberships and trainings
17,458		 Training & research
13,095		 Premises and Office running costs
157,233		 Accounting and professional fees
17,483		 Bank charges & interests
10		 Exchange rate variance
40,950		 Depreciation
9,378
8

(Continued) (187,816)
-		 1,392,642
16,850,235		 (1,392,642)
-		 -
-		 -
16,850,235		 Support
Total		 Costs 2019
2019		 £
£		 768,681
8,066,057		 42,954
790,346		 -
591,988		 -
1,418,622		 158,357
945,840
- 79,171 - (79,171) - Govern - ance costs 2019 £ 46,672 1,194 - - 21,336
26,473 1,244,666 153,191 8,709 1,406,566 Wildlife 2019 £ 508,213 29,320 - 7,672 20,362
38,216 1,220,192 139,264 7,917 1,367,373 Oceans 2019 £ 727,593 38,944 - - 31,095
93,925 1,966,758 139,264 8,709 2,114,731 Forests 2019 £ 719,327 261,926 - - 149,032
22,224 2,298,898 194,970 12,667 2,506,535 Pollution & health 2019 £ 1,104,781 86,699 128,578 457,644 55,945
93,620 3,896,647 306,382 20,584 4,223,613 Energy Transition 2019 £ 1,472,542 57,261 167,541 591,800 76,853
49,382 1,881,144 139,264 9,501 2,029,909 Climate 2019 £ 909,037 53,065 94,711 326,402 35,780
Charitable activities: Overheads Recharge
(144,474)
8,450		 1,029,924
1,840,193		 Allocate costs Support Costs
139,264
181,043		 Governance costs
-
11,084		 1,169,188
2,032,320		 Comparatives Cost of
Rule of Law		 generating funds 2019
2019		 £
£		 Personnel & recruitment
508,969
1,300,242		 Consultants/ external assistance
71,835
147,148		 Sub-grants
-
201,158		 Litigation costs
-
35,104		 Travel, events and meetings
64,882
332,198
8

(Continued) 423
148,737		 8,171
124,167		 141,867
1,151,061		 28,924
125,325		 9,468
16,278		 90,478
754,026		 7,417
61,807		 507
4,226		 (155,750)
-		 1,101,497
14,198,480		 (1,101,497)
-		 -
-		 -
14,198,480
- 490 4,910 23,672 - - - - - 98,274 - (98,274) -
8,558 8,685 72,931 5,785 - 52,779 4,326 296 20,571 739,498 88,120 8,845 836,463
10,697 13,347 74,574 7,438 - 67,859 5,563 380 17,217 994,707 121,165 10,810 1,126,682
26,476 11,792 76,053 7,438 - 67,859 5,563 380 60,329 1,386,175 110,150 10,810 1,507,135
12,520 16,642 237,770 11,571 - 105,558 8,653 592 1,732 2,228,685 165,224 16,707 2,410,616
27,286 25,540 206,059 14,877 - 135,757 11,125 761 56,312 2,843,714 220,299 21,620 3,085,633
9,080 20,348 134,887 7,438 - 67,859 5,563 380 52,593 1,717,143 121,165 11,793 1,850,101
23,732 14,683 123,947 12,397 - 113,098 9,271 634 37,850 2,351,462 198,269 17,689 2,567,420
29,965 4,469 78,063 5,785 6,810 52,779 4,326 296 (90,854) 737,325 77,105 - 814,430
Charitable activities: Publications, subscriptions & memberships and trainings Training & research Premises and Office running costs Accounting and professional fees Bank charges & interests Exchange rate variance Depreciation Bad Debt Overheads Recharge Allocate costs Support Costs Governance costs
8

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2020

9 Auditor's remuneration

The analysis of auditor's remuneration is as follows:
Fees payable to the charity's auditor and associates:
Audit of the charity's annual accounts
Non-audit services
Audit-related assurance services
Other assurance services
Total non-audit fees		 2020
£
21,240
7,920
6,375
14,295		 2019
£
19,200
-
4,965
4,965

10 Trustees

None of the trustees (or any persons connected with them) received any remuneration during the year. During the year £174 (2019: £13,064) of expenses were reimbursed to a trustee.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

11 Employees

Number of employees

The average monthly number of employees during the year was:

Restricted funds projects
Unrestricted funds projects
Designated funds projects
Employment costs
Wages and salaries
Social security costs
Other pension costs
Other employment related costs and temps
Holiday pay accrual		 2020
Number
118
69
13
200
2020
£
9,044,080
614,117
292,744
572,812
325,651
10,849,404		 2019
Number
90
56
-
146
2019
£
6,973,836
461,987
238,950
391,284
-
8,066,057

During the period a total amount of £211,277 (2019: £nil) of termination and redundancy was paid to 4 employees according to the charity's accounting policy. The full amounts due to employees were made in full in the year ended 31 December 2020 and have been included in other employment related costs. This was primarily related to re-structuring within the organisation.

Due to the global pandemic the charity changed its policy on the number of holiday days that employees could carry forward to the next year. This increased the holiday pay accrual to a material amount and therefore the accumulative position has been provided for in the current year. If the accrual had been provided in previous years the accrued position at 31 December 2019 would have been £181,047.

The number of employees whose annual remuneration was £60,000 or more were:

more were:
2020 2019
Number Number
£60,000 - £70,000 11 10
£70,001 - £80,000 2 1
£80,001 -£90,000 2 4
£90,001-£100,000 2 -
£100,001 - £110,000 1 -
£120,001 - £130,001 3 2
£130,001- £140,000 - 1
£140,001 - £150,000 1 -
£200,000-£210,000 - 1
£210,001 - £220,000 1 -

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

11 Employees

(Continued)

Pension contributions for employees whose annual remuneration was £60,000 or more amounted to £69,496 (2019: £63,012).

Remuneration of key management personnel

The Key management personnel of ClientEarth comprises of the CEO. The remuneration of key management personnel, is as follows.

Salary
Employers national insurance
Pension contributions
12
Net gains/(losses) on investments		 2020
£
214,200
29,753
8,400
252,353		 2019
£
210,000
27,730
17,900
255,630
Endowment
funds
designated
2020
£
Revaluation of investments
1,221,976
13
Intangible fixed assets
Cost
At 1 January 2020
Additions - internally developed
At 31 December 2020
Amortisation and impairment
At 1 January 2020
Amortisation charged for the year
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019		 Total
2019
£
-
Software
£
52,750
65,988
118,738
22,858
23,749
46,607
72,131
29,892

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

14
Tangible fixed assets
Cost
At 1 January 2020
Additions
At 31 December 2020
Depreciation and impairment
At 1 January 2020
Depreciation charged in the year
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019
15
Fixed asset investments
Cost or valuation
At 1 January 2020
Additions
Valuation changes
Exchange movement
Disposals
At 31 December 2020
Carrying amount
At 31 December 2020
At 31 December 2019		 Fixtures,
fittings &
equipment
£
46,630
18,775
65,405
19,686
12,960
32,646
32,759
26,944		 Computers
Total
£
£
215,866
262,496
168,179
186,954
384,045
449,450
105,934
125,620
57,073
70,033
163,007
195,653
221,038
253,797
109,932
136,876
Investments
£
-
20,640,959
1,207,833
(510,316)
(8,582,127)
12,756,349
12,756,349
-

The investment portfolio is managed by Sarasin & Partners LLP. The investments are stated at market value as at the year end.

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

16
Debtors
Amounts falling due within one year:
GROUP
Other debtors
Prepayments and accrued income
PARENT CHARITY
Other debtors
Prepayments and accrued income
17
Other creditors falling due within one year
GROUP
Other creditors
Accruals and deferred income
PARENT CHARITY
Other creditors
Accruals and deferred income		 2020
£
418,241
3,449,948
3,868,189
214,476
3,526,131
3,740,607
2020
£
660,159
502,765
1,162,924
860,810
359,260
1,220,070		 2019
£
95,209
1,638,103
1,733,312
101,696
1,596,254
1,697,950
2019
£
335,325
86,979
422,304
195,687
61,646
257,333

18 Retirement benefit schemes

ClientEarth operates defined contribution pension schemes for staff in the UK and Belgium. These schemes match employee contributions up to a maximum of 5% of pensionable salary and staff are automatically enrolled into the relevant scheme in line with government legislation. No employees receive benefits under a defined benefit pension scheme. The assets of the schemes are held separately from those of the charity in independently administered funds

The charge to profit or loss in respect of defined contribution schemes was £292,744 (2019: £238,950).

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19 Restricted funds

The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes:

Group and Parent Movement in funds
Balance at Incoming Resources Balance at
1/1/2020 resources expended 31/12/20
£ £ £ £
Rule of Law
European Commission DG Environment (LIFE programme) (176,802) 175,760 1,042 -
Children's Investment Fund Foundation - China 2018-21 136,718 624,162 (490,631) 270,249
European Union via GOPA 11,185 111,620 (120,767) 2,038
MacArthur Foundation 2018-21 (27,479) 228,987 (201,508) -
MacArthur NGO Fund 2019-21 14,682 - - 14,682
Esmée Fairbairn Foundation - Brexit 254,184 42,688 (296,872) -
World Wildlife Fund 2019 671 - (671) -
Waterloo Foundation 2019-20 15,428 - (15,428) -
Funders for Fair Trade 2019-20 77,486 (1,296) (76,190) -
Norwegian Embassy Biodiversity seminars - 7,837 (7,837) -
Green Alliance 2020 - 50,000 (50,000) -
Asia Development Bank 2020 - 25,136 (25,136) -
SDSNA - UN China 2020 - 19,147 (19,147) -
Henocq Law Trust 2020 - 100,000 (28,752) 71,248
Therium Access 2020-21 - 50,000 (15,169) 34,831
World Resources Institute - WRI 2020 - 59,770 (63,459) (3,689)
Waterloo Foundation 2020-21 - 40,000 (14,745) 25,255
Hewlett Foundation 2020 -21 - 194,332 - 194,332
Funders for Fair Trade 2020-21 - 93,271 11,242 82,029
Samworth Foundation 2020-2023 - 100,000 - 100,000
Climate Imperative Foundation 2021 - 187,557 - 187,557
Grantham China 2020/21 - 750,227 - 750,227
SDSNA - 2020 -21 - - 8,982 (8,982)
-
Climate and the Paris agreement
Children's Investment Fund Foundation - Climate
Accountability 2018-21 94,277 396,259 (364,064) 126,472
Children's Investment Fund Foundation - Company Financial
2018-21 111,129 155,658 (189,608) 77,179
The Sunrise Project 2019-20 16,232 - (16,232) -
Friends Provident Foundation 2019-20 - 94,428 (94,428) -
Wallace Global Fund 2019-20 7,639 - (7,639) -
Sainsbury Family Charitable Trusts (Mark Leonard Trust/
Ashden Trust/JJ Charitable Trust - Finance 2019-21 40,961 75,000 (78,274) 37,687
Pickwell Foundation 2019-22 14,025 30,000 (27,454) 16,571
The Sunrise Project 2021 - - (725) (725)
Jane Thompson - 13,459 (5,477) 7,982
Quadrature Climate Foundation 2020 - 33,157 (33,157) -
Climate Crisis Foundation 2020-21 - 2,437 - 2,437
Grantham SEES Asia 2020-21 - 750,227 - 750,227
Sub total 590,336 4,409,823 (2,262,552) 2,737,607

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19 Restricted funds (Continued)
Balance at Incoming Resources Balance at
1/1/2020 resources expended 31/12/20
£ £ £ £
Brought forward from previous page 590,336 4,409,823 (2,262,552) 2,737,607
Energy Transition
German Federal Ministry for the Environment, Nature
Conservation and Nuclear Safety (EUKI) (22) 1,815 (1,793) -
European Commission - Horizon 2020 60,694 25,893 (94,893) (8,306)
Children's Investment Fund Foundation - Energy Markets
2018-21 57,121 137,753 (146,650) 48,224
Children's Investment Fund Foundation - Coal 2018-21 181,722 320,069 (333,650) 168,141
European Climate Foundation (ECF) - EU State Aid 2019 (5,061) 4,845 216 -
ECF - EU Internal Energy Markets 2019 (6,627) 6,346 281 -
Bloomberg Energy Markets via ECF 2019-20 (13,043) 101,444 (88,401) -
ECF - Poland Coal & Clean Air 2019 (6,213) 6,281 (68) -
ECF - Poland Energy Market Transition 2019 (17,968) 18,193 (225) -
Bloomberg Energy Poland via ECF 2019-20 1,836 20,670 (22,506) -
Kestrelman Trust - Energy Poland 2019-20 15,000 - (15,000) -
ECF Poland 2020 - Coal - 78,593 (78,593) -
ECF Poland 2020 Energy Sector - 30,564 (30,564) -
ECF Poland 2020 Climate Youth Movement - 39,190 (35,670) 3,520
Bloomberg 2020 - 21 Poland - 61,084 (63,533) (2,449)
Kestrelman Trust 2020 - 21 - 46,000 (14,976) 31,024
ECF State Aid 2020 Bridge funding - 19,119 (19,119) -
Tilia Foundation 2020 - 139,665 (139,665) -
Green Alliance 2020 - 100,000 (100,000) -
ECF State Aid 2020-21 - 82,781 (71,910) 10,871
ECF IEM 2020-21 - 201,873 (143,242) 58,631
Bloomberg 2020 - 21 Energy - 137,783 (157,269) (19,486)
* German Postcode Lottery 2020-21 - 225,670 (112,694) 112,976
Wellspring Fund 2020 -22 - 579,482 - 579,482
Tolkien Trust 2021 - 100,000 - 100,000
-
Pollution and Health -
Trust for London 2018-21 9,390 85,000 (86,154) 8,236
Children's Investment Fund Foundation - Clean Air 2018-21 114,579 294,383 (305,895) 103,067
John Ellerman Foundation 24,794 - (24,794) -
Postcode Green Trust - Air Quality 2020 250,000 - (250,000) -
Global Greengrants Fund 2018-20 93,282 16 (93,298) -
Plastics Solutions Fund (Zero Waste Europe) 2019-20 (4,253) 10,318 (6,065) -
European Environmental Health Initiative 2019-20 - through
Oak Foundation 2,371 - (2,371) -
Savitri Waney Charitable Trust 2019-20 10,358 30,000 (4,290) 36,068
Becht Harmful Chemicals 2020-22 - 96,967 (55,254) 41,713
EEHI 2020-21 - 26,213 (23,268) 2,945
Rethink Plastic Alliance 2020-21 - 10,440 (15,531) (5,091)
Global Greengrants Fund (Marisla) 2020-2 - 150,177 (91,480) 58,697
Sub total 1,358,296 7,598,450 (4,890,876) 4,065,870

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19 Restricted funds (Continued)
Balance at Incoming Resources Balance at
1/1/2020 resources expended 31/12/20
£ £ £ £
Brought forward from previous page 1,358,296 7,598,450 (4,890,876) 4,065,870
Forests
UK Department for International Development (DFID) - FGMC
2018-21 369,921 1,036,126 (1,166,522) 239,525
Waterloo Foundation - UK NGO Coalition on forests 2018-19 9,152 24,798 (33,950) -
The Tilia Fund 2019-22 via CE US 139,702 365,361 (301,161) 203,902
SEM Trust - Community Forestry 2019-20 9,167 - (9,167) -
European Forest Institute 2019-21 (6,627) 39,256 (30,180) 2,449
DFID-MFGAP 2019-22 2,890 42,275 (49,231) (4,066)
EU DG Home WWF 2019-21 (1,332) 20,843 (13,051) 6,460
EFI Cote d'Ivoire - 15,196 (15,196) -
EFI Congo 2020 - 9,294 (9,294) -
Climate Advisors 2020 - 45,910 (45,910) -
- -
Oceans -
Membership contributions to the UK Sustainable Seafood
Coalition 13,732 49,233 (53,163) 9,802
Funding Fish 2019-20 86,052 - (86,052) -
Levine Family Foundation 2019-20 23,949 7,000 (30,949) -
Adessium Foundation - Fisheries 2019-21 57,340 118,171 (133,491) 42,020
Savitri Waney Charitable Trust - Oceans 2019 4,105 50,000 (12,646) 41,459
Walton Family Foundation 2019-20 92,685 241,775 (268,769) 65,691
Becht Fisheries 2020-23 - 177,538 (153,302) 24,236
WAITT Institute 2020 - 7,668 (7,668) -
Rethink Plastics Alliance - Plastics - 13,933 (24,496) (10,563)
Ocean5 2020-23 - 215,000 (136,803) 78,197
Minderoo 2020 - 78,072 (78,072) -
- -
Wildlife -
Arcadia Fund 2018-23 383,405 385,811 (410,880) 358,336
European Nature Heritage Fund 2019-21 8,173 101,796 (95,746) 14,223
Kestrelman Trust - Wildlife 2019-20 29,213 - (29,213) -
The Tides Foundation - Patagonia 2019-20 26,661 - (26,661) -
Grantham Foundation for the Protection of the Environment
2019-23 - via CE US 125,066 187,557 (248,871) 63,752
Evans Family Foundation 2019-20 - via CE US 57,066 - (57,066) -
Evans Family 2020-21 - 187,722 (86,286) 101,436
Becht Wildlife 2020-21 - 41,899 (42,480) (581)
Seas at Risk 2020 - 17,837 (17,837) -
Kestrelman Trusts - Wildlife 2020-21 - 40,000 - 40,000
Levine Family Foundation 2020-21 - 27,000 (12,855) 14,145
Wildlife & Habitats Oak Foundation 2020 - 30,800 - 30,800
FOEN - Swiss Confederation 2020 - 26,840 (26,840) -
Sub total 2,788,616 11,203,161 (8,604,684) 5,387,093

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19 Restricted funds (Continued)
Balance at Incoming Resources Balance at
1/1/2020 resources expended 31/12/20
£ £ £ £
Brought forward from previous page 2,788,616 11,203,161 (8,604,684) 5,387,093
Strategic Climate Litigation (redistributed
across Climate, Energy and Pollution and
Health) -
Children's Investment Fund Foundation - Strategic Climate
Litigation 2018-21 1,935,347 2,210,993 (2,472,210) 1,674,130
Bloomberg - Strategic Climate Litigation via European Climate
Foundation 2019-20 40,853 96,295 (137,148) -
Adverse Costs Fund 209,473 - 17,901 227,374
Litigation Support Fund - - - -
CIFF Asia 2020-22 - 944,944 (542,767) 402,177
Bloomberg Strategic Litigation 2020-21 - 298,360 (284,125) 14,235
-
Restricted core grants (supporting all
charitable activities above) -
Esmee Fairbairn Foundation - core - (42,692) 42,692 -
Thomas and Julie Hoegh 2020-24 - 50,000 - 50,000
* German Office (Hermann Bruhn) 6,110 - (608) 5,502
* German Office 2019-23 (Hermann Bruhn) 170,361 178,884 (7,495) 341,750
* Germany Office Forestry 12,777 12,781 (20,882) 4,676
* Forum for Active Philanthropy 2020 44,864 (13,152) 31,712
* EU Life+ Germany 2020 - 216,438 (211,311) 5,127
Total 5,163,537 15,214,028 (12,233,789) 8,143,776

Funds marked * relate to subsidiaries

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19 Restricted funds comparative figures

The income funds of the charity include restricted funds comprising the following unexpended balances of donations and grants held on trust for specific purposes:

Group and Parent Movement in funds Movement in funds
Balance at Incoming Resources Balance at
1/1/2019 resources expended 31/12/19
£ £ £ £
Rule of Law
European Commission DG Environment (LIFE programme) (113,199) 141,268 (204,871) (176,802)
Children's Investment Fund Foundation - China 2018-21 276,943 386,573 (526,798) 136,718
European Union via GOPA (155) 214,599 (203,259) 11,185
Chris Hohn Foundation - China, external costs 857 (61) (796) -
MacArthur Foundation 2018-21 128,824 246,512 (402,815) (27,479)
Thirty Percy Foundation 2018-19 50,000 50,000 (100,000) -
MacArthur NGO Fund 2019-21 - 204,414 (189,732) 14,682
Esmée Fairbairn Foundation - Brexit 332,099 228,656 (306,571) 254,184
Waterloo Foundation 2018-19 16,429 - (16,429) -
European Climate Foundation via Green Alliance 2018-19 40,036 49,290 (89,326) -
Calouste Gulbenkian Foundation - Brexit 37,170 - (37,170) -
Funders for Fair Trade 2018-19 80,350 - (80,350) -
World Wildlife Fund 2019 - 671 - 671
Harbour Seal 2019-20 - 14,000 (14,000) -
Waterloo Foundation 2019-20 - 25,000 (9,572) 15,428
Funders for Fair Trade 2019-20 - 85,180 (7,694) 77,486
Climate and the Paris agreement
Pickwell Foundation 2017-19 4,553 - (4,553) -
The Sunrise Project 2018-19 17,353 (247) (17,106) -
Sainsbury Family Charitable Trusts (Mark Leonard Trust/
Ashden Trust/JJ Charitable Trust - Finance 2017-19 29,256 - (29,256) -
Children's Investment Fund Foundation - Climate
Accountability 2018-21 67,939 314,601 (288,263) 94,277
Children's Investment Fund Foundation - Company Financial
2018-21 92,401 256,151 (237,423) 111,129
The Sunrise Project 2019-20 85,000 247 (69,015) 16,232
Friends Provident Foundation 2019-20 - 94,950 (94,950) -
Wallace Global Fund 2019-20 - 37,547 (29,908) 7,639
Sainsbury Family Charitable Trusts (Mark Leonard Trust/
Ashden Trust/JJ Charitable Trust - Finance 2019-21 - 75,000 (34,039) 40,961
Pickwell Foundation 2019-22 - 25,000 (10,975) 14,025
Energy Transition
German Federal Ministry for the Environment, Nature
Conservation and Nuclear Safety - European Climate Initiative
(EUKI) (2,952) 65,612 (62,682) (22)
European Climate Foundation - EU Internal Energy Markets
2018 (5,749) 5,749 - -
European Climate Foundation - EU State Aid 2018 (3,393) 3,432 (39) -
European Commission - Horizon 2020 139,646 - (78,952) 60,694
Children's Investment Fund Foundation - Energy Markets
2018-21 92,502 225,099 (260,480) 57,121
Sub total 1,365,910 2,749,243 (3,407,024) 708,129

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19
Restricted funds comparative figures
Balance at
1/1/2019

£
Brought forward from previous page
1,365,910
Children's Investment Fund Foundation - Coal 2018-21
93,686
Bloomberg Energy Markets via European Climate Foundation
2018-19
14,110
European Climate Foundation - Poland Coal and Clean Air
2018
(4,715)
European Climate Foundation - Poland Energy Market
Transition 2018
(2,075)
Kestrelman Trust - Energy Poland 2018-19
15,810
Bloomberg Energy Poland via European Climate Foundation
2018-19
23,116
European Climate Foundation - EU State Aid 2019
-
European Climate Foundation - EU Internal Energy Markets
2019
-
Bloomberg Energy Markets via European Climate Foundation
2019-20
-

German Postcode Lottery - Germany Coal
-
European Climate Foundation - Poland Coal and Clean Air
2019
-
European Climate Foundation - Poland Energy Market
Transition 2019
-
Bloomberg Energy Poland via European Climate Foundation
2019-20
-
Kestrelman Trust - Energy Poland 2019-20
-
Pollution and Health*
Clean Air campaign donations
3,306
City Bridge Trust
10,934
Clean Air legal strategies donation 2018
30,811
Children's Investment Fund Foundation - Air Quality
Campaign
6,123
Trust for London 2018-21
5,018
Children's Investment Fund Foundation - Clean Air 2018-21
88,013
Green Budget Europe
2,690
John Ellerman Foundation
27,376
Deutsche Gesellschaft Fur Internationale Zusammenarbeit
(GIZ) - European Climate Initiative (EUKI)
41,437
Postcode Green Trust - Air Quality 2019
250,000
Postcode Green Trust - Air Quality 2020
-
European Environmental Health Initiative 2018-19 - through
Oak Foundation
2,327
Plastics Solutions Fund (Zero Waste Europe) 2018-19
(4,600)
Global Greengrants Fund 2018-20
75,743
Clean Air legal strategies donation 2019
-
Plastics Solutions Fund (Zero Waste Europe) 2019-20
-
European Environmental Health Initiative 2019-20 - through
Oak Foundation
-
Sub total
2,045,020		 (Continued)
Incoming
resources
Resources
expended
Balance at
31/12/19
£
£
£
2,749,243
(3,407,024)
708,129
415,786
(327,750)
181,722
31,102
(45,212)
-
4,715
-
2,075
-
-
(15,810)
-
16,167
(39,283)
-
45,532
(50,593)
(5,061)
66,299
(72,926)
(6,627)
112,540
(125,583)
(13,043)
51,333
(51,333)
-
55,918
(62,131)
(6,213)
17,468
(35,436)
(17,968)
49,372
(47,536)
1,836
30,000
(15,000)
15,000
-
(3,306)
-
12,500
(23,434)
-
-
(30,811)
-
-
(6,123)
-
85,000
(80,628)
9,390
241,821
(215,255)
114,579
(2,690)
-
50,000
(52,582)
24,794
(4,592)
(36,845)
-
-
(250,000)
-
250,000
-
250,000
-
(2,327)
-
9,053
(4,453)
-
164,341
(146,802)
93,282
75,000
(75,000)
-
9,839
(14,092)
(4,253)
25,902
(23,531)
2,371
4,563,724
(5,260,806)
1,347,938

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19
Restricted funds comparative figures
Balance at
1/1/2019

£
Brought forward from previous page
2,045,020
Savitri Waney Charitable Trust 2019-20
-
Forests
UK Department for International Development (DFID) via the
International Institute for Environment and Development
(IIED)
23,023
UK Department for International Development (DFID) - FGMC
2018-21
262,662
SEM Trust 2018-19
15,489
Waterloo Foundation - UK NGO Coalition on forests 2018-19
8,058
The Tilia Fund 2019-22 via CE US
-
SEM Trust - Community Forestry 2019-20
-
European Forest Institute 2019-21
-
DFID-MFGAP 2019-22
-
EU DG Home WWF 2019-21
-
Oceans
Membership contributions to the UK Sustainable Seafood
Coalition
20,898
Walton Family Foundation 2017-19
25,024
Pig Shed Trust 2018-19
61,784
Funding Fish 2018-19
61,456
Marine protection and plastics donation 2018-19
14,610
Seas At Risk CFP Project 2019-20
-
Funding Fish 2019-20
-
Levine Family Foundation 2019-20
-
Adessium Foundation - Fisheries 2019-21
-
Savitri Waney Charitable Trust - Oceans 2019
-
Walton Family Foundation 2019-20
-
Seas at Risk, consultancy 2019
-
Wildlife
Kestrelman Trust – Wildlife 2018-19
19,773
Arcadia Fund 2018-23
259,334
European Nature Heritage Fund 2019-21
-
Kestrelman Trust - Wildlife 2019-20
-
The Tides Foundation - Patagonia 2019-20
-
Grantham Foundation for the Protection of the Environment
2019-23 - via CE US
-
Evans Family Foundation 2019-20 - via CE US
-
Sub total
2,817,131		 (Continued)
Incoming
resources
Resources
expended
Balance at
31/12/19
£
£
£
4,563,724
(5,260,806)
1,347,938
30,000
(19,642)
10,358
9,402
(32,425)
-
1,035,351
(928,092)
369,921
(15,489)
-
58,904
(57,810)
9,152
291,015
(151,313)
139,702
45,000
(35,833)
9,167
20,356
(26,983)
(6,627)
16,095
(13,205)
2,890
(1,332)
(1,332)
45,854
(53,020)
13,732
121,608
(146,632)
-
(61,784)
-
(61,456)
-
37,500
(52,110)
-
92,929
(92,929)
-
209,999
(123,947)
86,052
63,000
(39,051)
23,949
140,324
(82,984)
57,340
50,000
(45,895)
4,105
186,119
(93,434)
92,685
8,620
(8,620)
-
(19,773)
-
485,504
(361,433)
383,405
60,438
(52,265)
8,173
40,000
(10,787)
29,213
26,739
(78)
26,661
190,383
(65,317)
125,066
196,632
(139,566)
57,066
8,025,496
(8,054,011)
2,788,616

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

19
Restricted funds comparative figures
Brought forward from previous page
Strategic Climate Litigation (redistributed across Climate,
Energy and Pollution and Health)
Chris Hohn Foundation - Strategic Climate Litigation, external
costs
Wallace Global Fund - Strategic Climate Litigation 2018-19
Children's Investment Fund Foundation - Strategic Climate
Litigation 2018-21
Bloomberg - Strategic Climate Litigation via European Climate
Foundation 2018-19
Bloomberg - Strategic Climate Litigation via European Climate
Foundation 2019-20
Adverse Costs Fund
Restricted core grants (supporting all
charitable activities above)
Esmee Fairbairn Foundation - core

German Office (Hermann Bruhn)

German Office 2019-23 (Hermann Bruhn)

Germany Office Forestry
Total
Funds marked
relate to
subsidiaries		 Balance at
1/1/2019
£
2,817,131
687,397
8,384
855,769
249293
-
-
-
-
-
-
4,617,974		 (Continued)
Incoming
resources
Resources
expended
Balance at
31/12/19
£
£
£
8,025,496
(8,054,011)
2,788,616
61
687,458
-
(8,384)
-
3,068,050
(1,988,472)
1,935,347
115733
365026
0
333,907
(293,054)
40,853
209,473
209,473
271,344
(271,344)
-
13,971
(7,861)
6,110
170,361
170,361
12,777
12,777
12,011,700
(11,466,137)
5,163,537		 (Continued)
Incoming
resources
Resources
expended
Balance at
31/12/19
£
£
£
8,025,496
(8,054,011)
2,788,616
61
687,458
-
(8,384)
-
3,068,050
(1,988,472)
1,935,347
115733
365026
0
333,907
(293,054)
40,853
209,473
209,473
271,344
(271,344)
-
13,971
(7,861)
6,110
170,361
170,361
12,777
12,777
12,011,700
(11,466,137)
5,163,537
5,163,537

Designated funds The trustees resolved to voluntarily designate the unrestricted lottery income received in 2020 to targeted projects across coal, energy systems, climate finance, climate accountability and clean air programmes, engagement activities for COP26, fundraising, and to organisation effectiveness projects. Also during the year part of the previously designated Gilmour-Samson gift funds have been spend on particular pieces of work to help ClientEarth better meet its charitable objectives. Movement in funds Balance at
Transfers
Balance at
Incoming
Resources
Transfers
Investments
Balance at		 1 January 2019
1 January 2020
resources
expended
gains/losses
31 December		 2020 £
£
£
£
£
£
£
£		 Gilmour-Samson gift
-
12,171,179
12,171,179
98,108
(1,986,522)
-
1,221,976
11,504,741		 People's Postcode Lottery income
-
-
-
-
-
2,023,742
-
2,023,742		 -
12,171,179
12,171,179
98,108
(1,986,522)
2,023,742
1,221,976
13,528,483
20

Total 2019 £ 29,892 136,876 - 20,715,509 20,882,277
Restricted funds 2019 £ - - - 5,163,537 5,163,537
Designated funds 2019 £ - - - 12,171,179 12,171,179
Total Unrestricted funds 2020
2019		 £
£		 72,131
29,892		 253,797
136,876		 12,756,349
-		 12,962,448
3,380,793		 26,044,725
3,547,561
Restricted funds 2020 £ - - - 8,143,776 8,143,776
Designated funds 2020 £ - - 12,756,349 772,134 13,528,483
Unrestricted funds 2020 £ 72,131 253,797 - 4,046,538 4,372,466
Analysis of net assets between funds Fund balances at 31 December 2020 are represented by: Intangible fixed assets Tangible assets Investments Current assets/(liabilities)
21

CLIENTEARTH

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

22 Operating lease commitments

At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Within one year
Between two and five years
In over five years		 2020
£
353,237
460,602
31,609
845,448		 2019
£
706,323
536,806
35,488
1,278,617

23 Related party transactions

During the year the charity received restricted grants totalling £5,084,221 from the Children’s Investment Fund Foundation (CIFF) (2019: £4,908,081), a foundation of which Sonia Medina (a trustee) is an employee. Sonia Medina sits on ClientEarth’s board of trustees as the representative of CIFF.

During the year the charity received a restricted grant of £75,000 from The Ashden Trust (2019: £75,000) a trust of which Sarah Butler-Sloss (a trustee) is also a trustee.

During the year the charity received an unrestricted grant of £250,000 from The J. Van Mars Foundation (2019: £187,375), a foundation of which the members of the band Coldplay (patrons) are trustees.

During the year the charity received an unrestricted grant of £15,000 from The Martin Smith Foundation (2019: £15,000), a foundation of which Sir Martin Smith (a trustee) is also a trustee.

During the year the charity received an unrestricted grant of £7,633 from The Prospect Hill Foundation (2019: £nil), a foundation of which Frances Beinecke (a trustee) is also a trustee.

During the year the charity received a total of £124,824 in unrestricted donations (2019: £74,523) and £178,884 in restricted to core donations from trustees (2019: £178,916).

24 Associates

Details of the charity's associates at 31 December 2020 are as follows:

Name of undertaking Registered Nature of business Class of % Held
office shares held
Climate Transition Expert England & Dormant Ordinary 33
Group Limited Wales

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2020

CLIENTEARTH

25 Subsidiaries

The following subsidiaries are all charitable entities with no share capital, and are all consolidated in these accounts

Details of the charity's subsidiaries at 31 December 2020 are as follows:

Name of undertaking
Registered
Nature of
office
business
Client Earth France
86, boulevard Raspail, 75006 Paris, France
Dormant
ClientEarth AISBL
1050 Bruxelles, Rue du Trone 60, Belguim
Charity
ClientEarth gGmbH
Objekt Albrechtstrasse 22, 10117 Berlin,
Germany
Charity
Fundacja ClientEarth
Prawnicy dla Ziemi
(ClientEarth Poland)
Zurawia 45 (staircase B, 2nd floor), 00-680
Warsaw, Poland
Charity
ClientEarth ASBL
17 Route d'Arlon, L-8009 Strassen,
Luxembourg
Charity
26
Analysis of changes in net funds
The charity had no debt during the year.
27
Cash generated from operations
2020
£
Surplus for the year
5,162,448
Adjustments for:
Investment income recognised in statement of financial activities
(155,106)
Fair value gains and losses on investments
(1,221,976)
Foreign exchange gains and losses on investments
510,316
Depreciation and impairment of tangible fixed assets
93,782
Movements in working capital:
(Increase) in debtors
(2,134,877)
Increase/(decrease) in creditors
740,620
Cash generated from operations
2,995,207		 Name of undertaking
Registered
Nature of
office
business
Client Earth France
86, boulevard Raspail, 75006 Paris, France
Dormant
ClientEarth AISBL
1050 Bruxelles, Rue du Trone 60, Belguim
Charity
ClientEarth gGmbH
Objekt Albrechtstrasse 22, 10117 Berlin,
Germany
Charity
Fundacja ClientEarth
Prawnicy dla Ziemi
(ClientEarth Poland)
Zurawia 45 (staircase B, 2nd floor), 00-680
Warsaw, Poland
Charity
ClientEarth ASBL
17 Route d'Arlon, L-8009 Strassen,
Luxembourg
Charity
26
Analysis of changes in net funds
The charity had no debt during the year.
27
Cash generated from operations
2020
£
Surplus for the year
5,162,448
Adjustments for:
Investment income recognised in statement of financial activities
(155,106)
Fair value gains and losses on investments
(1,221,976)
Foreign exchange gains and losses on investments
510,316
Depreciation and impairment of tangible fixed assets
93,782
Movements in working capital:
(Increase) in debtors
(2,134,877)
Increase/(decrease) in creditors
740,620
Cash generated from operations
2,995,207		 % Held
100.00
100.00
100.00
100.00
100.00
2019
£
15,290,484
(30,985)
-
-
61,807
(161,962)
(110,163)
15,049,181
2020
£
5,162,448
(155,106)
(1,221,976)
510,316
93,782
(2,134,877)
740,620
2,995,207