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2025-12-31-accounts

C40 Cities Climate Leadership UK

(C40 Cities UK)

(A company limited by guarantee)

Report and Financial Statements for the year ended 31 December 2025 Charity number 1173124 Company number 10401717

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK

Report and Financial Statements

For the year ended 31 December 2025

Contents

Page

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK

Report and Financial Statements For the year ended 31 December 2025

Charity name C40 Cities Climate Leadership UK Principal and 44 Featherstone Street, London, EC1Y 8RN registered office Charity number 1173124 Company 10401717 number Board of The Trustees (Directors of the charitable company) who served Directors during the period and at the date of approval of the accounts were: Antha Williams (Chair) Krishna Patel (resigned 21 April 2026) Pelle Lind Bournonville (resigned 11 May 2026) Jemma Read (resigned 11 May 2026) Vittoria Beria (appointed 11 May 2026) Mete Coban (appointed 11 May 2026) Ana Zornig Jayme (appointed 11 May 2026) Jennifer Semakula Musisi (appointed 11 May 2026) Jesper Nygård (appointed 11 May 2026) Shirley Rodrigues (appointed 11 May 2026)

Company Juliette Carter
Secretary
Chief Executive Mark Watts
Auditor HaysMac LLP, 10 Queen Street Place,
London, EC4R 1AG
Solicitor Bates Wells Brathwaite, 10 Queen Street
Place
London, EC4R 1BE
Banker NatWest Bank, 94 Moorgate, London, EC2M
6UR

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

Report of the Directors for the year ended 31 December 2025

The Trustees (who are the directors) of C40 Cities Climate Leadership UK (“C40 Cities UK”), are pleased to present their report and financial statements for the charity for the year ended 31 December 2025.

The accounts (financial statements) have been prepared in accordance with the Statement of Recommended Practice (second edition): Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102 ) effective 1 January 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and UK Generally Accepted Practice as it applies from 1 January 2019.

The charity is registered with the Charity Commission under registration number 1173124.

Our Aims and Objectives

Purposes and Aims

The purposes and aims of C40 Cities UK, as set out in the objects contained in the company’s Memorandum and Articles of Association, are:

Sustainable development means “development which meets the needs of the present without compromising the ability of future generations to meet their own needs”.

The achievement of the above aims drives the business planning. The beneficiaries of the charity are all global citizens. The Achievements and Performance section below contains more information on how C40 UK’s activities have furthered the objects above.

Mission

C40 Cities UK operates as part of the C40 Cities Network. With effect from 1 January 2026, the members of the C40 Steering Committee became the company law members of C40 Cities UK, together with C40 Cities Climate Leadership Group Inc (“C40 Cities Inc.”).

The Trustees of C40 Cities UK believe that operating as part of the broader C40 network is the most effective way of maximising the charitable impact of C40 Cities UK. On this basis C40 works towards a shared strategy (albeit one that C40 Cities UK’s Board of Trustees

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

considers and agrees to adopt for C40 Cities UK independently). This approach allows C40 Cities UK to work in partnership with other organisations in the C40 network around the world and with other partner organisations in order to achieve its charitable objectives (which are global in nature). The Trustees of C40 Cities UK continue to consider that operating as part of this network is in the charity’s best interests, having contributed to, considered and adopted C40’s 2025-2030 Business Plan which C40 Cities UK has worked towards during the last financial year.

The mission is to help the world avoid climate breakdown. Cities are demonstrating that bold action can halt the worst impacts of climate breakdown, while creating healthier places to live, good green jobs and more equitable societies. C40 (and thus C40 Cities UK) is galvanising this action through three missions for the 2025-2030 period to achieve results in an evolving global economic context.

Mission 1 - Help the world to halt climate breakdown by halving fossil fuels use by 2030

Mission 2 - Increase resilience so cities and people are protected as they face the impacts of climate breakdown

Mission 3 - Ensure a transition to a clean, green world that is fair, inclusive and addresses the impacts and injustices of climate breakdown

As urban leaders and decision-makers, mayors of C40 Cities are on the frontlines of the climate crisis. C40 Cities UK supports adoption and enactment of science-based climate action plans and the building of city-level public support for the same. The charity mobilises their voice nationally, regionally and globally to influence other cities and stakeholders. In doing this, C40 Cities UK seeks to inspire the world to rapidly end dependence on fossil fuels, increase climate resilience and ensure a transition that is fair and inclusive.

While national governments and global institutions struggle with the challenges of implementing climate action in the face of notable global events, increasingly polarised politics, rising inequality and ever-increasing levels of disinformation, C40 Cities UK continues to seek to encourage courageous decision-making by Mayors on climate breakdown and sustainable development - as well as the work of other cities and forms of subnational government.

By pioneering a unique model of collaboration, C40 cities have fundamentally shaped global climate action as it is known, driven by multilateral partnerships with national governments, corporations, unions, non-profits and residents. Together, C40 (and C40 Cities UK specifically) are as committed as ever to delivering bold, inclusive climate action for both people and the planet.

A distinguishing feature of the C40 network, supported by and participated in by the charity, is that it operates on performance-based requirements, not membership fees. C40 member cities earn their membership through action. C40’s Leadership Standards set the minimum climate-action requirements for all member cities and ensure the integrity of C40 as a network of climate leaders. Consequently, by being part of the network C40 Cities UK is able to hold itself to a set of external standards and be held to account for its work towards its charitable purposes by its regulators, the public and by the C40 network.

The C40 Leadership Standards are reflected in the Business Plan 2025 - 2030 which establishes five requirements for each city in the C40 Cities Network, which the trustees of C40 Cities UK decided to adopt and agree to in 2025, having considered how the Business Plan will advance C40 Cities UK’s charitable purposes. C40 Cities UK’s contribution to that business plan is set out below (‘Achievements and Performance’).

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

Achievements and Performance

The year 2025 saw city climate action lead with a narrative of hope in the midst of notable global events. C40’s 20th anniversary served as a moment to take stock. The data revealed the results from two decades worth of Mayors committing to, and delivering on, sciencebased climate action. Over the last four years, emissions per capita in C40 cities have dropped by 3.5%, even as global emissions rise (by 2% during that same time). This data demonstrates the effectiveness of this means of C40 Cities UK achieving its charitable objects (i.e. through supporting climate action at mayoral and city level).

This collective achievement is the outcome of consistent science-based, people-centred Policy making from each and every C40 city. Recent highlights of these were on display at the 2025 C40 World Mayors Summit that took place ahead of COP30, hosted in Rio de Janeiro. Member cities contributed an example of their climate efforts to C40’s 20th anniversary publication, generating an inspiring record of diverse and pioneering climate action.

In 2025, cities were supported through more than 60 technical assistance programmes on sectoral policy delivery, equity and inclusion and climate finance, which operated across the globe. C40 also engaged with over 2,000 city officials through peer-to-peer sharing networks, exchanging expert knowledge and best practice.

By offering a breadth of support to the members of the C40 cities network, including through sectoral and thematic networks, C40 encouraged and supported them to move faster and go further on climate. Cities are able to access free expert advice on what works, while also receiving support to drive action forward through:

C40’s programmes and activities enabled groups of cities, either within one country or region or across multiple regions, to implement high-impact policies and projects which are tailored for the regional, country and city contexts. These programmes offered mayoral engagement, technical support and policy advice, peer-to-peer engagement and capacity building, with the ultimate goal of reducing of greenhouse gas emissions and encouraging sustainable development.

The regional delivery structure enabled C40 to leverage relationships between peer cities and partners, both regionally and globally, to deliver more effectively and efficiently-and to be more responsive to local context, priorities and needs. The networks, resources and forums helped Mayors deliver climate action. Through peer-to-peer collaboration, city teams shared expertise, tested solutions and delivered proven results faster.

Throughout 2025, C40 Cities UK contributed towards the progress of the C40 network towards the five goals for each city set out in the C40 Cities Network 2025 – 2030 Business Plan:

1. Delivery of high-impact actions

C40 cities have shown a just and fair transition to a low carbon world is possible when cities collaborate, Mayors learn from one another, and are able to take the best ideas and apply them in their cities. C40’s activities support its cities in advancing and implementing the most impactful climate actions at the policy level, in line with their climate action plan commitments and targets, directly advancing C40 Cities UK’s charitable objects.

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

London revealed the first beneficiaries of its ambitious new Greener Schools pilot, which will enable schools to spend less on their energy bills and more on children’s education. The new initiative will see 38 schools across 16 London boroughs save an average of almost £15,000 on their energy bills and help them cut carbon emissions. The pilot is scalable and could be rolled out nationally to benefit more children and schools across the country. If all of London’s schools were to use energy saving interventions, this could save over £50 million annually from the education budget.

2. Mainstreaming climate action into policy and budgets

C40 is helping cities accelerate climate action by integrating climate into budgeting and governance systems. For those prepared to take on new ideas, this facilitates bold action on ideas that might be seen as different or even controversial at first, but once proven, become mainstream. By 2030, all C40 cities will be required to adopt and implement climate budgeting, helping to accelerate the implementation of their climate action plans and therefore further advance C40 Cities UK’s charitable objects.

For example, Sydney published its comprehensive 2025-2030 environmental strategy, shaped by deep community feedback and stakeholder engagement. The city recommitted to its ambitious net zero 2035 target, supported by an interim 2030 goal of a 70% emissions reduction from 2006 levels. Sydney is actively shifting the discourse on fossil fuel phase out through advocacy, decisive targets for gas phase out and operational decarbonisation.

3 & 4. Building public support and partnerships

C40 cities are some of the biggest and most influential cities in the world. C40 leverages the collective voice and actions of C40’s Mayors, together with C40 partners, to help the world avoid catastrophic climate breakdown. C40 uses global and regional platforms like COP and Urban20, as well as the C40 World Mayors Summit, to inspire other cities, , build coalitions and shift markets through mayoral leadership, thereby supporting the advancement of environmental protection and sustainable development by influencing policy, practice and investment decisions at city, national and international level in a way that promotes the reduction of greenhouse gas emissions and wider public benefit.

With over 700 events and more than 45,000 attendees, London Climate Action Week 2025 captured this spirit perfectly as Europe’s largest city-wide climate festival. It was a chance to see how far cities have come, from cutting emissions and improving public health to cleaning the air and building climate resilience. The week marked the 10th anniversary of the Paris

Agreement with a powerful message: “Behind every climate solution is a community and a city that dared to lead.” At Paris City Hall, Mayors reflected on progress across key issues and set ambitious goals for 2030 and 2050. In a show of unity, Mayors then travelled together by Eurostar from Paris to London. Standing side by side on the platform, they illustrated the cross-border collaboration between cities that C40 Cities UK supports and facilitates, helping to accelerate climate action through the sharing and adoption of effective measures which further the charity’s objects of reducing greenhouse gas emissions and promoting sustainable development for public benefit.

During the week, C40 and the UK’s Foreign, Commonwealth & Development Office hosted an event where Mayors shared how local initiatives are scaling globally and how local leadership is closing the gap on national climate promises, from Nairobi’s solar-powered markets to Medellín's big push on energy efficiency.

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

5. Supporting cities to access climate finance

Current urban climate finance flows are far short of the minimum needed per year to rapidly reduce emissions and strengthen urban resilience. The cost of inaction will far exceed the investment required to build a resilient, equitable future. Yet the adaptation investment gap is massive, with only 8.4% of needs being met. C40 helps cities call for and access climate finance to shape greener, healthier and more resilient cities.

During the C40 World Mayors Summit, C40 convened a high level panel with Mayors from Santiago, Chefchaouen (a non-C40 city), Amsterdam and London, Multilateral Development Banks and urban climate finance professionals to discuss the imperative to rapidly scale finance for urban climate priorities. It also spotlighted the action by cities to build funds, engage investors and mobilise capital for their climate goals. The panel highlighted leading city action such as the three financial instruments launched by Amsterdam - who also signed the C40 Clean Investment Accelerator this year - to accelerate its transition towards climate neutrality and a circular economy through tailored support. Also during the Summit, C40, supported by the International Finance Corporation (IFC) and the International Association of Ports and Harbors, launched the Global Port Sustainability-Linked Loan initiative. By leveraging C40’s network of nearly 100 cities and dozens of ports, IFC’s expertise in climate finance and the International Association of Ports and Harbors global alliance of 201 ports, the partnership will deliver comprehensive market guidance, capacity-building programmes and direct access to sustainable finance for ports.

Structure, Governance and Management

Governing Document

The organisation is a charitable company limited by guarantee, incorporated on 29 September 2016 and registered as a charity on 22 May 2017. The company is governed under its Memorandum and Articles of Association. In the event of the company being wound up, members are required to contribute an amount not exceeding £1.

Members

The Members of C40 Cities UK were:

As a result, C40 Cities UK ceased to be a subsidiary of C40 Inc.

C40 Cities Climate Leadership Group, Inc. (Hereinafter ‘C40 Inc.’) is a Delaware incorporated, non-stock, non-profit corporation registered in the United States.

C40 Inc has subsidiary entities in Denmark, South Africa and India, and branch offices in Belgium and China. Prior to the governance changes which took effect on the 1st of January 2026, C40 UK was also a subsidiary entity of C40 Inc.

A memorandum of understanding between C40 Inc and C40 UK outlines how the two entities, and any subsidiary entities, will work together towards their shared charitable aims. C40 Cities UK and C40 Inc have common global climate action goals which all staff work towards.

The Members appoint the Trustees (otherwise known as Directors) of C40 Cities UK. Details of Trustees who served during the period of this report are set out on Page 2.

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

Governance

The strategic direction of C40 Cities UK is reviewed and agreed by the Trustees. C40 Cities UK agrees to adopt a pan-network strategy, considering this to be the most effective means of advancing the charity’s objects which are global in nature.

Recruitment and Appointment of Trustees

The Directors of the company are also charity Trustees for the purposes of charity law. Under the charity’s Articles of Association, Trustees are appointed by the Members.

During the period, all Trustees gave their time on a voluntary basis, and did not receive any benefits from the charity.

Trustee Induction and Training

An induction is carried out for all new Trustees, covering the purpose of the charity, a review of the charity’s governing documents, policies and procedures, and the roles and responsibilities of Trustees, including the Trustees’ duty to act at all times in the interests of the charity and the Trustees’ duty to avoid conflicts of interest. The Trustee induction includes meetings with senior staff. Trustee training is provided from time to time as needs are identified.

Trustees are experienced in their fields, and were selected based on their varied skill sets and how they support the identified governance needs of the charity, including climate change, fundraising, international operations, finance, and charity governance. C40 are pleased to highlight the gender diversity of the Board, currently being over 50% female leadership.

The Trustees are aware of and endeavour to comply with the Charity Governance Code. In particular, there is close coordination between the Trustees and senior management to ensure the effective management of the charity. The Trustees act with integrity and care, complying with a Code of Conduct and conflict of interest policy. Trustees manage risk through C40 Cities UK’s risk register that is regularly reviewed by the trustees.

Trustee Meetings

Trustees met formally two times during the year, at which meetings they received reports from the Executive Director (overview of the 5 year strategy), Managing Director of Corporate Services (operational issues) and the Chief Financial Officer (Quarterly Financial Report). The Board reviewed the Risk Register’s mitigation plans, formally approved the 2025 Annual Report and Accounts, and ratified the 2026 budget. Trustees meet outside of this as needed.

Trustees received updates about the charity’s activities and delivery and those of the wider network between meetings as appropriate. Trustees also review the management accounts against budget at each of the two scheduled yearly meetings.

Trustees and staff interact regularly between meetings: specifically, the Executive Director speaks with the Chair on a frequent basis; and the Managing Director of Corporate Services and Deputy Executive Director speak with Board members in advance of each Board meeting.

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

Delegated Management

Executive management is delegated by Trustees to the Executive Director, who is also the Executive Director of C40 Cities Inc, and to a unified Management Team which includes employees of both C40 Cities UK and other C40 network entities. The members of the Management Team during the period were:

Executive Director Mark Watts Deputy Executive Director Kevin Austin Managing Director of Corporate Services Juliette Carter Managing Director, Climate Finance, Knowledge and Partnerships Andrea Fernandez Managing Director of Regions and Mayoral Engagement Shruti Narayan Managing Director of Climate Action Implementation Aditi Maheshwari (resigned December 2025) Managing Director, Communications Luke Upchurch Managing Director, Governance & Executive Engagement Anna Beech Managing Director, Climate Solutions and Networks Cassie Sutherland Managing Director for Inclusion & Global Leadership Caterina Sarfatti Chief Financial Officer Rachel Yoxen (resigned September 2025) Chief Financial Officer Jason Searancke (appointed March 2026)

Public benefit

The Trustees confirm that they have complied with the duty in section 17 of the Charities Act 2011 to have due regard to the Charity Commission’s general guidance on public benefit when exercising any powers or duties to which the guidance is relevant.

Financial Review

Income and expenditure, and Reserves

During 2025 C40 Cities UK received income of £15,859,000 (2024: £13,901,000) and incurred £14,385,000 of expenses (2024: £14,238,000). C40 Cities UK’s income in 2025 was predominantly in the form of a grant from C40 Inc. to deliver activities set out in the C40 Network business plan; and from the Children’s Investment Fund Foundation (CIFF).

As a result, C40 Cities UK generated a net surplus of £1,474,000 in 2025, which increased the brought forward reserves to £4,236,000 by the year-end. Year end reserves comprise unrestricted reserves of £4,279,000, and a deficit of restricted reserves of £43,000. Year end reserves are in line with the board-approved reserves policy.

Reserves Policy

Unrestricted reserves are available to be applied, at the discretion of the Trustees, to any of C40 Cities UK’s charitable purposes. Restricted reserves are to be applied to the specific project and purposes intended by the donor.

Trustees seek to retain a prudent level of reserves from unrestricted income. Trustees base their reserves policy on identified needs to:

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

From 1 January 2026, C40 Cities UK is a stand-alone charitable company, thus the Trustees of C40 Cities UK require three months of operating expenditure to be kept as an unrestricted reserve per the reserves policy. Based on the 2026 budget, C40 Cities UK seeks to hold unrestricted (free) reserves in the region of £2,200,000. As at 31 December 2025, C40 Cities UK holds unrestricted reserves of £4,279,000.

Trustees believe that the reserves policy has been complied with as unrestricted reserves at year end exceed the minimum requirement. C40 Cities UK will draw on its surplus of reserves as it undertakes its planned activities in 2026.

Cash held on deposit

C40 Cities UK holds an interest-bearing bank account, and grant funds received from donors are held within that account.

Fundraising

The charity’s income comprises grants from C40 Cities Inc. and other funders. C40 UK does not fundraise from the general public.

Principal risks and uncertainties

The charity maintains a global Risk Register in relation to the C40 Cities Network. Each risk and its mitigating action are owned by a member of the Management Team, who discuss and review the risks as required at quarterly meetings. The mitigating actions are put into place to reduce the likelihood or impact of any detrimental events. Risks pertaining to C40 Cities UK are reviewed by the Trustees at board meetings.

The UK's macroeconomic climate and ongoing global events have created a volatile and challenging financial landscape. C40 Cities UK faces competition for unrestricted and restricted funding as national and local governments navigate fiscal constraints. This volatility poses a direct risk to its projected income and delivery objectives. To mitigate this C40 Cities UK is developing multi-year financial scenarios and strategic plans designed to safeguard C40 (and C40 Cities UK) long term financial resilience.

Future activities

C40 Cities UK remains committed to advancing the five core urban climate goals detailed in the C40 Cities Network 2025–2030 Business Plan. To secure the financial resilience required for this long-term delivery, the charity expects to establish independent, multiyear grant agreements directly with strategic donors as a standalone legal entity.

The Trustees have considered the charity’s ability to continue as a going concern by reviewing confirmed and potential future grants from donors, estimated operating costs, and cash flow projections through to July 2027. Having considered this information the Trustees of C40 Cities UK believe it is appropriate to prepare the accounts on a going concern basis.

Further details are set out in Note 2 of the financial statements.

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

Statement of Trustees' responsibilities in respect of the Trustees’ Annual Report and the financial statements

The Trustees (who are also the Directors of C40 Cities Climate Leadership UK for the purposes of company law) are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland .

Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the income and expenditure for that period. In preparing these financial statements, the trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions and disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the charitable company and to prevent and detect fraud and other irregularities.

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 UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Trustees/Directors’ report, which incorporates the strategic report from page 5 to page 11, was approved by the Board of Trustees on 24 June 2026 and signed on its behalf by:

Antha Williams Chair

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Independent auditor’s report to the members of C40 Cities Climate Leadership UK

Opinion

We have audited the financial statements of C40 Cities Climate Leadership UK for the year ended 31 December 2025 which comprise Statement of Financial Activities, statement of cashflows, balance sheet 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 charity in accordance with the ethical requirements that are relevant to our audit of the financial statements 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 charitable company'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 trustees are responsible for the other information. The other information comprises the information included in the Report and Financial statements other than the financial statements and Auditor’s Report thereon. 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

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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.

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the 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 requires us to report to you if, in our opinion:

Responsibilities of trustees for the financial statements

As explained more fully in the trustees’ responsibilities statement set out on page 15, 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 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 charitable company or to cease operations, or have no realistic alternative but to do so.

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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:

Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to company law and applicable employment regulations and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006 and the Charities Act 2011, and consider other factors such as payroll tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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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. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Steven Harper (Senior Statutory Auditor) 10 Queen Street Place For and on behalf of HaysMac LLP, Statutory Auditor London Date: EC4R 1AG 7 July 2026

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Statement of Financial Activities (including Income and Expenditure Account) for the year ended 31 December 2025

Notes
Income
Donations
Other income
Total Income
4
Expenditure on:
Raising funds
Charitable activities
5
Total Expenditure
Net income/(expenditure)
for the year
Reconciliation of funds
Total funds brought
forward
Total funds carried forward		 2025
Unrestricted
£'000
9,261
190
9,451
-
8,183
8,183
1,268
3,011
4,279		 2025
Restricted
£'000
6,408
-
6,408
-
6,202
6,202
206
(249)
(43)		 2025
Total
£'000
15,669
190
15,859
-
14,385
14,385
1,474
2,762
4,236		 2024
Total
£000
13,776
125
13,901
-
14,238
14,238
(337)
3,099
2,762

The accompanying notes are an integral part of these financial statements

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Balance Sheet at 31 December 2025

Fixed Assets
Tangible Assets
Non Current Asset
Current Assets
Debtors
7
Cash at Bank and on
Hand
Current Liabilities
Creditors
8
Net Current Assets
Total Net Assets
Represented by:
Funds and reserves
Restricted funds
9
Unrestricted funds
9
Total funds		 1,213
11,162		 2025
£'000
-
215
215



4,021
4,236
(43)
4,279
4,236		 439
5,553		 2024
£'000
-
215
215



2,547
2,762
(249)
3,011
2,762
12,375
(8,354)		 5,992
(3,445)
(8,354) (3,445)

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

These financial statements were approved and authorised for issue by the Board of Trustees on 24 June 2026 and were signed on its behalf by:

Antha Williams, Chair of Trustees

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C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK

Statement of cash flows for the year ended 31 December 2025

Cash flow from operating activities:
Net income / (expenditure) for the year
Adjustment for:
(Increase)/decrease in debtors
Increase in creditors
Net cash provided by operating activities
Change in cash and cash equivalents in the
year
Cash and cash equivalents at the beginning of the
year
Cash and cash equivalents at end of the year		 2025
£’000
1,474
(774)
4,909
4,135
5,609
5,553
11,162		 2024
£’000
(337)
1,500
1,836
3,336
2,999
2,554
5,553

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

18

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

1) Basis of accounting

The financial statements have been prepared on the basis of historical cost in accordance with applicable accounting standards in the United Kingdom, the Companies Act 2006 and the Charities Act 2011. These financial statements are prepared in accordance with the Accounting and Reporting by Charities Statement of Recommended Practice (SORP 2015) under the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102).

A summary of the principal accounting policies which have been applied consistently is set out below in notes 2 and 3.

2) Going concern

The financial statements have been prepared on a going concern basis. Trustees have undertaken an assessment of the charity’s ability to continue as a going concern by reviewing confirmed and potential future grants from donors, estimated operating costs, and cash flow projections through to July 2027. From the assessment it is reasonable to conclude that the charity:

19

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

3) Accounting policies

a) Income

Income is included in the Statement of Financial Activities when the charity is entitled to the income, the receipt of income is probable, and the amount can be quantified with reasonable accuracy.

Income comprises grant funding, interest income and other income. Grant income is recognised when it becomes due in accordance with the grant agreements. Where grant income is received in advance of performance or entitlement to spend funds, the amount is deferred and released to the Statement of Financial Activities based on when the charity is entitled to the income. Where entitlement to grant income is based on spent funds, the amount is accrued to the Statement of Financial Activities based on when the charity is entitled to the income.

b) Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

Expenditure is accounted for on an accruals basis. Expenditure comprises direct costs and supports costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings.

Expenditure on charitable activities includes all costs associated with furthering charitable purposes of the charity through the provision of its charitable activities. Such costs include staff costs, an allocation of support costs and programme costs.

c) Fund accounting

Unrestricted funds are used at the discretion of the Trustees for the furtherance of the general objects of the charity. Designated funds are unrestricted funds which have been set aside by the Trustees for specific purposes or projects. Restricted funds are those funds that have restrictions imposed by donors and can only be used for those purposes. They are not available for any other work than that specified by the donor.

20

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

3) Accounting policies (Continued)

d) Tangible fixed assets

Tangible fixed assets, comprising computers and other equipment, are stated at cost less accumulated depreciation. Assets are depreciated on a straight-line basis over an estimated useful economic life of three years. Assets less than £1,500 are not capitalised.

f) Taxation

C40 Cities UK is a registered charity and is therefore not liable for corporation tax derived from its charitable activities as it falls within the exemptions available to registered charities. VAT, which is irrecoverable, is included within expenditure.

g) Pension

C40 Cities UK makes payments into a defined contribution pension scheme. The pension costs are allocated to activities and between restricted/unrestricted funds according to where the related staff costs are allocated.

h) Critical estimates and judgements

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements.

In the view of the Trustees in applying the accounting policies adopted, no judgements were required that have a significant effect on the amounts recognised in the financial statements nor do any estimates or assumptions made carry a significant risk of material adjustment in the next financial year.

21

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

4) Income

Grant income – C40 Inc
Other restricted grants
Other unrestricted grants
Other income
Total income		 Unrestricted
Restricted
Total
Total
2025
2025
2025
2024
£’000
£’000
£’000
£’000
4,365
5,667
10,032
12,575
-
741
741
1,201
4,896
-
4,896
-
190
-
190
125
9,451
6,408
15,859
13,901

Further information about the grant income from C40 Inc. can be found in the Related Parties note 12.

5) Expenditure

LS1 – Delivery of high impact
actions
LS2 – Mainstreaming and
climate budgeting
LS3 – Building public support
LS4 - Partnerships
LS5 – Climate Finance		 Direct Costs
Support
Costs
Total
Total
Restated
2025
2025
2025
2024
£’000
£’000
£’000
£’000
6,435
1,021
7,456
8,847
2,271
489
2,760
4,440
1,436
363
1,799
375
1,027
304
1,331
315
786
253
1,039
**261 **
11,955
2,430
14,385
14,238

22

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

The Charity implemented a new 2025–2030 Business Plan during the year. To reflect this strategy, charitable expenditure is now allocated across five new Leadership Standards. Expenditure for 2024 has been re-analysed against the new standards.

Support costs above include:

LS1
LS2
LS3
LS4
LS5		 i.
ii.
iii.
iv.
v.
vi.
2025
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
87
288
318
77
180
71
1,021
1,558
42
138
152
37
86
34
489
804
31
102
113
27
64
26
363
555
26
86
95
23
53
21
304
146
23
71
79
19
44
17
253
76
209
685
757
183
427
169
2,430
3,140

Key: LS - Leadership standard, i. Corporate services, ii. Finances costs, iii. HR costs, iv. IT costs, v. Legal costs, vi. Operations

Total Expenses include: 2025 2025 2024
£'000 £'000
Staff costs 12,557
107		 11,729
Governance costs 40
Other expenditure 1,721 2,469
Total 14,385 14,238

23

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

Governance costs above include:

overnance costs above include:
Audit costs
Grant audits (Other Auditors)
Legal costs
Total		 2025
2024
£’000
£’000
30
28
10
7
67
15
107
40

6) Staff costs, Trustee remuneration and expenses and costs of key management personnel

Staff costs during the year were as follows:
Wages and salaries
Social security costs
Pension costs		 2025
2024
£'000
£'000
10,711
10,188
1,330
1,082
516
458
12,557
11,728

The average number of employees during the year was as follows:

2025 2024
No. No.
161 153

Staff costs for the year include total termination benefits of £nil (2024: £35,245). This comprises ex-gratia payment and payment in lieu of notice.

24

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

6) Staff costs, Trustee remuneration and expenses and costs of key management personnel (continued)

Employee benefits, excluding non-contractual payments, employer pension costs and employer's NI, of higher paid staff within the following scales were:

2025 2024
Restated
£60,000 - £69,999 33 27
£70,000 - £79,999 25 24
£80,000 - £89,999 3 5
£90,000 - £99,999 8 4
£100,000 - £109,999 2 1
£110,000 - £119,999 -
1
£120,000 - £129,999 4
4
£130,000 - £139,999 1 0
£160,000 - £169,999 1 1
£190,000 - £199,000 1
1

As outlined in note 12, C40 Cities UK and C40 Inc. are aligned with their charitable aims, and staff work in the pursuit of these aims. The disclosure in this note relates to staff who are employed by C40 Cities UK.

None of the charity's Trustees were paid or received any other benefits during the year, nor were any expenses incurred or reimbursed.

Total employee benefits received by 8 key management personnel during the year were £1,265,000 (2024: £1,194,000).

One of the Trustees of C40 Cities UK is also a Director of C40 Inc.

The prior year staff banding note has been restated to correctly reflect the staff numbers in the £80,000–£139,999 band.

25

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

7) Debtors

Prepayments and accrued income
Due from other C40 entities
Grants receivable
Sundry debtors		 2025
£'000
237
136
817
23
1,213		 2024
£'000
269
88
-
82
439

8) Creditors

Trade creditors
Accruals
Deferred income
PAYE and NIC
Due to other C40 entities
Deferred income reconciliation:
Brought forward
Amounts deferred in year
Carried forward		 2025
£'000
125
292
4,525
338
3,074
8,354
2025
£'000
-
4,525
4,525		 2024
£'000
70
353
-
287
2,735
3,445
2024
£'000
-
-
-

26

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

9) Restricted funds
C40 Inc.
Climate Action Fund
Total Restricted Funds		 Balance at 1
January 2025
Income
2025
Expenditure
2025
Balance at 31
December 2025
£'000
£'000
£'000
£'000
(249)
1,119
(913)
(43)
-
5,289
(5,289)
-
(249)
6,408
(6,202)
(43)

The deficit of £43,000 (2024: £249,000) arises from programme expenditure for which donor reimbursement is expected to be received in 2026.

C40 Inc.
Total Restricted
Funds		 Balance at 1
January 2024
Income
2024
Expenditure
2024
Balance at 31
December 2024
£'000
£'000
£'000
£'000
584
5,258
(6,091)
(249)
584
5,258
(6,091)
(249)

27

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

10) Analysis of net assets between funds

Fund balances at 31 December 2025 are represented by:

Non current assets
Current assets
Creditors: amounts falling
due within one year
Total net assets		 Unrestricted
funds
2025
Restricted
funds
2025
Total
2025
£’000
£’000
£’000
-
215
215
11,661
714
12,375
(7,382)
(972)
(8,354)
4,279
(43)
4,236		 Total
2024
£’000
215
5,992
(3,445)
2,762

11) Liability of members

The charity is constituted as a company limited by guarantee. In the event of the charity being wound up members are required to contribute an amount not exceeding £1.

12) Related Parties

During 2025 the sole member of C40 Cities UK was C40 Inc., a non-stock, non-profit corporation registered in the state of Delaware (registered address: 120 Park Avenue, 23rd Floor, New York, NY 10017, USA).

During the year, C40 Cities UK received grant income from C40 Inc. totalling £10,032,000, being £4,365,000 of unrestricted grant income and £5,667,000 of restricted grant income. Grant income received from C40 Inc represents 63% of C40 Cities UK's total income.

At the year end funds of £4,525,000 received from C40 Inc. have been deferred as conditions confirming entitlement have not been met.

28

C40 Cities Climate Leadership UK Charity Number 1173124 Company Number 10401717

C40 Cities Climate Leadership UK Notes forming part of the financial statements for the year ended 31 December 2025

13) Lease Commitments

C40 Cities UK entered into a lease of its premises from November 2023 to October 2026. Future lease payments are as follows:

uture lease payments are as follows:
Within one year
Later than one year but less than 5 years		 2025
£'000
861
717
1,578		 2024
Restated
£'000
861
1,578
2,439

14) Change of Membership of C40 Cities UK

On 1 January 2026 the C40 Steering Committee became Members of C40 Cities UK together with C40 Inc. As a result, C40 Cities UK ceased to be a subsidiary of C40 Inc.

C40 Cities Inc. remains affiliated to C40 Cities UK, and a memorandum of understanding outlines how the two entities will work together towards their shared charitable aims. C40 Cities UK and C40 Inc have common global goals which all staff work towards.

29