ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS 

FOR THE YEAR ENDED 31 DECEMBER 2023 



COMPANY REGISTRATION NUMBER - 04625800 / CHARITY REGISTRATION NUMBER - 1199607 1 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Contents** 

|**Trustees’ report**|**03**|
|---|---|
|Charitable objectves and strategic priorites|04|
|Introducton to ISEAL|05|
|Review of 2023|06|
|Looking forward|10|
|Our membership|11|
|Risk management|12|
|Structure, governance and management|13|
|Financial review|15|
|Statement of the Board of Directors’ responsibilites|16|
|Reference and administratve details|17|
|**Independent auditor’s report on the fnancial statements**|**18**|
|**Financial statements for the year ended 31 December 2023**|**21**|
|Notes to the fnancial statements|25|



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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Trustees’ report** 

The Board, whose members are the Directors and Trustees of the charity, is pleased to present its annual report together with the financial statements of ISEAL Alliance for the year ended 31 December 2023. 

The report has been prepared in accordance with Part 8 of the Charities Act 2011 and constitutes a directors’ report for the purpose of company legislation. 

The financial statements have been prepared in accordance with the accounting policies set out on pages 25 to 28 of the attached financial statements and comply with the charitable company’s Memorandum and Articles of Association, applicable laws and the requirements of 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 United Kingdom and Republic of Ireland (FRS 102). 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Charitable objectives and strategic priorities** 

## Our vision 

**We want to create a world where markets are a force for good—where production and consumption, resource management and trade benefit people and planet.** 

## Five strategic priorities guide our work 

## **Inspiring solutions to sustainability challenges:** 

ISEAL will inspire and challenge sustainability systems and their partners to make a profound positive impact on the world’s most pressing sustainability challenges. 

## Our mission 

**We’re on a mission to accelerate positive change by improving the impacts of ambitious sustainability systems and their partners.** 

## Our ambition 

**We aspire to be a driving force for global, collective efforts to tackle the most pressing sustainability issues – from the climate emergency and biodiversity crisis to human rights and persistent poverty.** 

**Strengthening accuracy, reliability and resilience:** ISEAL will boost confidence in sustainability systems by helping them become more accurate, reliable and resilient. 

**Broadening the applicability of ISEAL’s credibility tools:** ISEAL will bring its experience on credibility to a broader range of sustainability systems. 

**Supporting effective use of credible sustainability systems:** ISEAL will help governments and businesses to achieve their sustainability goals by using credible sustainability systems. 

## **Growing a dynamic learning community:** 

## Strategic plan 2021 - 2024 

In 2021 we launched our new organisational strategy, aiming to increase our impact in tackling the biggest sustainability challenges of our time, from the climate emergency and biodiversity crisis to human rights and persistent poverty. 

More needs to be done to create change at the scale and pace required – and with growing commitment from governments and businesses to tackle these challenges, there’s a huge opportunity. Our strategy sets out how we plan to achieve this over the coming years. 

ISEAL will enhance the member experience and bring ambitious new sustainability systems into its learning community. 

## Public benefit 

The Board of Directors confirms that it has complied with its duty in Section 17 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission for England and Wales. The Board of Directors further confirms that the activities of ISEAL are carried out, in line with its charitable objects, for the public benefit as described in this report. 

## Our long-term objectives 

We want credible systems, claims and communications to sit at the heart of market-based sustainability solutions. 

We want sustainability systems and their partners to deliver scalable solutions to global sustainability challenges. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Introduction to ISEAL** 

ISEAL works to support and strengthen market-based tools to deliver measurable impacts at a global scale on critical sustainability issues, including climate, biodiversity, human rights, decent work and livelihoods. 

Through our membership programme we focus on improving the effectiveness of sustainability systems (standards and similar tools) and catalysing collaboration among stakeholders to create the enabling conditions for increased uptake of more sustainable practices. 

We define what credible practice looks like for these systems based on emerging global consensus. Our Code of Good Practice supports them to improve how they operate and deliver greater impact. Our Credibility Principles help businesses and governments make informed choices about the systems they work with, pushing the schemes to further improve. 

Our Community Members cover a wide range of sectors and are active in over 100 countries, reaching millions of producers and operations. This extensive network of effective sustainability systems is an important part of ISEAL’s unique approach. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Review of 2023** 

## Inspiring solutions to sustainability challenges 

ISEAL convenes global stakeholders, and curates collaboration and learning on priority sustainability topics. Through this work, we inspire and challenge sustainability systems and their partners to accelerate impacts on those issues and drive uptake and alignment of good practices. 

In 2023, we fostered meaningful dialogue within our membership and engaged with governments, companies and partners to deepen their impacts on critical sustainability issues – from addressing gender inequalities to catalysing innovation to fight climate change. 

ISEAL was invited to speak at several events, including those organised by the Organisation for Economic Co-operation and Development (OECD), Food and Agriculture Organization (FAO), United Nations Industrial Development Organization (UNIDO), International Trade Centre (ITC), IDH - the Sustainable Trade Initiative and our membership. 

## Human rights and decent work 

Our work on human rights and decent work has focused on building an understanding of and support for living wage, human rights remediation, and advancing gender equality through sustainability systems. 

We continued to support the work of the Global Living Wage Coalition (GLWC) (www.globallivingwage.org) as secretariat and host to the GLWC Action Network. The GLWC has worked for more than a decade to support the development of credible and transparent living wage estimates in more than 50 countries. 

Over the last year, we worked with our membership to advance thinking and action on providing remedy for abuse of human rights. Our member dialogue series, in partnership with the United Nations Office of the High Commissioner for Human Rights (OHCHR), explored how sustainability systems can strengthen their work on remediation by improving their systems, procedures and policies. ISEAL’s Effective Grievance Mechanism Self-Assessment Tool (published in February 2023) is an important first step to help Community Members on this improvement journey. 

ISEAL also worked within the CGIAR Gender Equality Initiative to understand how gender is integrated into ISEAL Community Members' systems, and how our membership is seeking to advance gender equality and women's empowerment. ISEAL and CGIAR - Bioversity International took this conversation to the India and Sustainability Standards 2023 conference, where we further explored the challenges and opportunities for sustainability systems to contribute to gender equality in supply chains. We also worked to produce materials that support sustainability systems in developing their gender strategies and incorporating content on gender into their standards. 

Our work with Evidensia.eco (a platform to consolidate, synthesise and disseminate knowledge about the impact of market-based tools) also supported this effort. Enhancing public access to research, we updated Evidensia.eco to improve its usability and value to key audiences, based on user research. New research conducted by Evidensia’s team included the effectiveness of supply chain approaches in addressing decent work goals. 

## Livelihoods, resilience and equity 

Responding to a gap in guidance to support issuebased claims, ISEAL developed its claims framework to support credible claims in the living wage space. The guidance, ‘Making credible living wage claims: A framework to guide practice’, is aimed at professionals in companies and sustainability systems who are working on living wages. 

We have been growing and deepening engagement with our living income work, as well as setting the ground for work on equity and producer empowerment. 

In 2023, we aimed to drive momentum to raise farmer incomes by increasing access and use of the Living Income Community of Practice (LICOP) activities and resources. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

We reached more than 2,300 subscribers in over 100 countries. We successfully delivered a LICOP in-person workshop in Abidjan with the Living Income Thematic Group of Cote d’Ivoire and IDH, which drew on evidencebased learning within the context of the West African cocoa sector. LICOP also embarked on a collaborative pathway with FAO to advance and scale action on income improvement in a two-day co-hosted workshop in Rome and continued to support OECD to develop its technical handbook on living income and wages. 

In 2023, ISEAL began a new workstream on improving equity in sustainable value chains. We kicked off with two new projects that will examine innovative approaches and strategies for advancing producer empowerment and more equitable income improvement approaches within supply chains. We will engage members and stakeholders across various sectors, working through LICOP and deepening engagement with the seafood sector. 

## Climate, biodiversity and nature 

ISEAL and its membership have long recognised that complex sustainability issues require holistic, collaborative solutions. Healthy ecosystems are best conserved by going beyond enterprise or farm-byfarm basis. Sustainability systems are an important part of the climate solution. They are increasingly offering new tools and applying innovative approaches to support businesses, governments and civil society to mitigate and adapt to climate change. 

We have been supporting our membership to work together to align climate-related standards and metrics across different sectors and supply chains. 

In a systematic mapping study in 2023, ISEAL and Evidensia explored the extent to which sustainability certification schemes and labels in the bioeconomy reduce greenhouse gas emissions. This was a preliminary research task in the three-year consortia project STARBBS. Under the project, a coalition of research organisations will benchmark standards for biobased feedstocks and products against best practice. We are supporting the initiative to apply ISEAL’s Sustainability Benchmarking Good Practice Guide. 

In addition, the Innovations Fund has been supporting our membership to collaborate with partners to explore and test new ways in which sustainability systems can support 

climate actions. In October 2023, the Fund launched a climate-specific funding round for new projects that will explore innovative ways for sustainability systems to support measurement and verification of greenhouse gas emissions, enable climate mitigation and adaptation by small and marginalised producers, and support sector or landscape-level transition pathways. 

## Strengthening accuracy, reliability and resilience 

We support sustainability systems and partners to innovate and improve the effectiveness of their systems to increase their impacts on critical sustainability issues. We focus on the key elements of a sustainability system, from the process of developing a standard through to design and implementation of the assurance (certification, verification, etc.) system, to how claims are made. We create opportunities for shared learning and innovation through our communities of practice, Innovations Fund, and topic-specific learning. 

In 2023, we created an assurance integrity framework, which built on the risk mitigation guidance that we developed in 2022. This framework provides a roadmap for ISEAL’s membership to better assess the threats to the integrity of their assurance systems. 

We developed a ‘data maturity rubric’ as a tool for our members to enhance their data management and use of data, and worked with our membership to explore its application to assurance integrity risks. Ten members piloted the self-assessment tool to identify their strengths and weaknesses, and how they can improve the way they use their data. Going forward, it will support our membership through peer learning and identifying gaps where we can develop resources or identify expert mentoring. 

We also published a research brief on wage auditing and commissioned research to understand NGO criticisms of auditing in the context of labour and social issues. This report will inform a new workstream on social auditing that will carry on into 2024. 

Eight grant recipients launched new initiatives from September 2023, funded under phase two of the ISEAL Innovations Fund. They are taking forward a diverse portfolio of work across multiple geographies and sectors, 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

exploring important themes ranging from improving livelihoods to addressing climate change to remedying human rights harms. Phase two will continue until 2027. 

## Broadening the applicability of ISEAL’s credibility tools 

ISEAL brings unique expertise in the credibility of sustainability systems. At the core of our work are ISEAL’s Credibility Principles and the ISEAL Code of Good Practice, which together define the characteristics of a credible sustainability system. These tools are widely used as a reference for developing new sustainability systems and for improving the practices of existing systems. They are also referenced by businesses and governments, from informing corporate policies and frameworks, to screening systems and standards. 

By the end of 2023, we reached final approval of the new ISEAL Code. This is a significant achievement that comes on the back of an extensive consultation process over the last couple of years. The Code integrates our standard-setting, assurance, and impacts Codes of Good Practice. The ISEAL Code takes a more holistic approach to how sustainability systems operate, and provides a global reference on how sustainability systems can put the Credibility Principles into practice. 

The ISEAL Code has an expanded scope to apply to a wider range of sustainability systems, beyond voluntary third-party standards. It also covers emerging areas of good practice, including due diligence, an increasingly important concern in the light of new legislation in the EU and elsewhere, and claims management. Claims management is important as sustainability claims come under increased scrutiny from regulators and the public. Systems that follow the ISEAL Credibility Principles and Code of Good Practice enable businesses to communicate about their sustainability initiatives and impacts in a transparent, trustworthy way, while avoiding greenwash and misleading claims. 

As companies increase their interest in making claims about their sustainability performance, we have led on defining what good practice looks like for making these kinds of impact claims. In addition to our guiding framework for making credible living wage claims, we looked at credible performance claims for landscape and jurisdictional approaches. In partnership with 

the Tropical Forest Alliance, we aligned 18 leading initiatives around a set of four positions on how companies can invest in landscape actions, measure performance improvements, and make claims about progress in implementing those actions. ISEAL’s ability to convene practitioner communities and deliver aligned positions reflects the importance of these issues and the broad commitment to finding solutions. 

A goal for 2023 was to support ongoing efforts to benchmark sustainability standards by promoting the use of ISEAL’s benchmarking guidance and Credibility Principles. We continued to advise benchmarking initiatives on good practices, advised WWF-UK on a benchmark of sustainability systems for financial advisors, and started work to provide technical support to 3-CO a multi-factor benchmarking project on biomaterials. We also started work with ITC to integrate criteria from the ISEAL Code into its Standards Map benchmarking platform. 

## Supporting effective use of credible sustainability systems 

To deliver against our objectives, we support policymakers, businesses and other stakeholders that use or reference sustainability systems. This ranges from helping an organisation to understand how sustainability systems work and how to use them, to how to reference them in policies, to what it means to have credible practices. 

Increasingly, organisations are turning to ISEAL for guidance on sustainability systems, especially as focus shifts to following the EU's new draft policy directives on issues such as green claims and due diligence. We continued to support governments in incorporating sustainability systems into their operations, and to advise businesses in working with credible sustainability systems as they navigate risks and address goals related to critical sustainability challenges. This included enhancing our business engagement in Switzerland and leading conversations around due diligence, credible claims, and related legislation with the cocoa sector. 

We created position papers and policy briefings to support engagement with EU policymakers to influence policy processes in Brussels, including on the Deforestation Regulation, Green Claims Directive 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

and Corporate Sustainability Due Diligence Directive (CSDDD). We met with policymakers from the European Commission and European Parliament to discuss our position on the draft and new directives. 

We co-hosted a workshop in Ghana alongside the International Trade Centre (ITC) to discuss the EU CSDDD with a focus on the cocoa sector. It was an opportunity to share information about the directive and how sustainability systems could play a role in the required due diligence process; and learn what concerns stakeholders have, gaps to successful implementation, and how these might be closed. 

streamed Members’ Week for the first time since the pandemic. We facilitated and delivered 18 community of practice events to support the technical learning and development of our members across data, assurance, standards-setting, claims, and monitoring and evaluation. 

At the end of 2023 we had 45 Community Members and 20 Code Compliant members, exceeding our goal for the strategy period. Seventeen independent evaluations of Community Members were conducted against the ISEAL Codes of Good Practice. We also identified requirements for members as they transition to meet the revised ISEAL Code. 

In addition, we developed a new partnership with the International Institute for Sustainable Development (IISD), which has allowed us to strengthen our work on trade policy related issues. 

To support our outreach in China, we launched a Chinese version of the Evidensia platform (Chinese.evidensia. eco) and rolled out business-focused training and engagement with Chinese sustainability systems, which included a public consultation on the ISEAL Code. 

## Growing a dynamic learning community 

Sustainability systems that aspire to improve can become ISEAL Community Members, signing up for a programme of collaboration, shared learning and improvement. Those that wish to go further can demonstrate compliance with the ISEAL Code of Good Practice through an external evaluation, becoming ISEAL Code Compliant. 

In 2023, we conducted a review of our compliance process, and of how our application, community monitoring and independent evaluation procedures are working. This aimed to strengthen our integrity and improve the experience of members. 

We also strengthened member engagement with our issues-based programme of work, including delivering a sustainability dialogues series. We held dialogues on a range of topics including forced labour, gender, carbon insetting and biodiversity monitoring. Across the year, we increased engagement with members through our events, communities of practice and platforms. We delivered a well-attended and well-received in-person and live- 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Looking forward** 

In 2024 we will expand our work, in particular on equity, livelihoods, human rights and deforestation. This will include a focus on improving smallholder livelihoods and the conditions for sustainable land use by smallholder producers. 

Working through the Living Income Community of Practice, landscapes and jurisdictional networks and by developing and sharing technical solutions for smallholder inclusion, we aim to strengthen the enabling conditions for smallholder market access and increase corporate commitment to, and investment in, improving livelihoods and sustainable land use. 

We will launch the new ISEAL Code, providing an opportunity to increase our communication on the importance of credible practices for sustainability systems and how those practices provide value and increased sustainability impact for the businesses and governments that use them. 

Our work on the credibility of sustainability claims is expanding. The ISEAL Code includes a broader focus on claims, and with a regulatory focus on claims, for example through the European Green Claims Directive, we will bring our expertise into policy discussions. We will also continue to support sustainability systems in understanding good practice. 

We will continue our engagement with policymakers on due diligence and trade. We will share information about how voluntary approaches to supply chain sustainability can support regulatory efforts, as well as build an understanding of the changes sustainability systems may need to make to best support these instruments. 

Additionally, we will support certification schemes to make technical improvements to their systems, so they align with company commitments and obligations for credible deforestation- and conversion-free supply chain sourcing. This will contribute to the long-term impact of reducing deforestation and conversion of natural ecosystems from commodity production and strengthening human rights in commodity supply chains. 

The ISEAL Innovations Fund and Programme – with support from the Swiss State Secretariat for Economic Affairs, SECO – will expand with funding from UK International Development from the UK Government. The Fund will continue to catalyse innovation among Community Members and beyond to drive change and scale impact, including a focus on smallholder livelihoods and inclusion. Through ambitious partnerships and a deeper understanding of the broader environments in which sustainability systems operate, we aim to encourage new ideas for solutions, technologies and approaches to help sustainability systems drive large-scale and long-lasting impact. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Our membership** 

## We have three membership categories: 

## ISEAL Community Member 

- Open to sustainability systems that demonstrate transparency and continuous improvement. All ISEAL members belong to this category. 

## ISEAL Code Compliant 

   - Community Members who demonstrate adherence to all three of ISEAL’s Codes of Good Practice by meeting independent evaluation requirements. 

- Committed to improving their systems, sharing experiences, building trust and demonstrating transparency. 

- Not required to participate in ISEAL’s compliance programme, but ongoing system improvement is periodically reviewed. 

## ISEAL Accreditation Member 

   - Community Members that are accreditation bodies that demonstrate compliance with ISO/IEC 17011:2017 in accordance with the ISEAL Accreditation Member Compliance Procedure. 

- The emphasis on improvement and the sharing of information is intended to build a community of trust and learning. 

**ISEAL Code Compliant and Accreditation Members are the legal members and guarantors of the Company.** 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Risk management** 

## The Board of Directors 

undertakes a regular review of risks facing ISEAL. The risk register is reviewed annually by the board, with support from the Finance Committee. Risk management is an integral part of the senior leadership team’s responsibilities. 

## Principal risks 

## **Relevance** 

Our Code of Good Practice and other credibility tools underpin ISEAL’s work on credible practices. There is a risk to ISEAL’s reputation and mission if these do not stay up to date with changing needs and make space for continued innovation by their users. This risk is being mitigated through regular Code review and revision, through regular and geographically widespread consultations, attentiveness to feedback, openness to innovation and investment in learning, and expanded promotion of the Code and Credibility Principles. 

## **Income diversification and security** 

This process has identified a wide range of risks, and mitigating actions have been taken to manage those risks. The Board of Directors has reviewed the risks and considers the strategies for mitigating the risks to be appropriate. 

The key risks ISEAL has identified, together with measures we have in place to mitigate these risks, are shown in the next column. 

ISEAL relies heavily on a small number of institutional donors. The loss of a large donor without replacement would be a challenge. This applies particularly from 2026 when current funding finishes. To address this, we are focusing on delivery of high-quality programmes in close collaboration with existing donors, and targeting medium-sized donors that might individually represent 10-20% of ISEAL’s income to build this element of our funding portfolio. The growing membership and unrestricted income from membership fees also mitigate the potential impact of this risk. 

## **People – Retention and knowledge management** 

People are ISEAL’s main asset. Staff numbers have grown during 2023 and into 2024. The focus now has moved from recruiting the right people to retaining the organisation’s skilled workforce and the knowledge they hold. We are doing this by building a strong culture, investing in, and giving attention to learning, development and progression opportunities for our team. We are also investing in a knowledge management role to improve our information and knowledge practices. 

## **People – Culture** 

A growing organisation faces challenges to organisational culture, which can risk productivity and staff satisfaction. To mitigate this risk, we spend time and resources on regular staff engagement activities, including surveys, online and face-to-face meetings, and use of ISEAL’s values to recognise positive contributions to our culture. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Structure, governance and management** 

## The organisation of the charity 

ISEAL is a company limited by guarantee and a charity registered in England and Wales. It is governed by its articles of association as last amended on 2 November 2023. 

## Board member appointment and induction 

The Board of Directors is comprised of a minimum of three directors, with the maximum number of directors determined by the board. A majority of the directors are elected by members at the Annual General Meeting, with the remaining directors appointed by the board. At each Annual General Meeting, one-third of the elected directors retire from office. A director may serve a maximum of three consecutive terms. 

The board reviews the skillset of its members regularly and whenever a vacancy arises. Appointments and elections are overseen by the Nominations Committee. Vacancies for elected positions are advertised to members, and for appointed positions are advertised on our website and through our channels as well as through external platforms. 

- That ISEAL operates according to its articles of association, in compliance with the Charities Act, and in compliance with international legal frameworks where relevant. 

- Responsible management of resources, by providing regular review and assessment of organisational risks, approving and monitoring annual workplans and budgets, and hiring, appraising and setting remuneration for the ISEAL executive director. 

- Accountability, by appointing external board members and board committees, and overseeing committee operations; championing diversity, equity and inclusion; appointing the chair of the board; approving the annual audited financial statements; communicating progress to ISEAL members and other key stakeholders; and reporting annually on how the organisation has been managed for the public benefit. 

## Board sub-committees 

The ISEAL Board of Directors has the following sub-committees: 

- Executive Committee 

Once elected by the membership or appointed by the board, new board members are inducted by the executive director and other relevant staff members. The board conducts an annual review of its performance. This helps the board to identify and assess the areas of governance that perform well and where improvements may be needed. 

- Finance Committee 

- Nominations Committee 

The following committees report to the board but also have independent decision-making powers: 

- Membership Committee 

## Board of Directors purpose and meetings 

The board meets at least three times a year and has overall responsibility for the policy and strategic management of the organisation. The main tasks of the board are to ensure: 

- Technical Committee 

The **Executive Committee** provides support to the executive director and facilitates organisational business between board meetings. It is composed of the board chair and up to two additional board members. 

- That the organisation is acting in pursuance of its charitable objectives. 

- Public benefit, by providing strategic direction including approving and monitoring strategic plans. 

The **Finance Committee** consists of between three and eight individuals, including at least two finance directors or equivalents from ISEAL member organisations. The role of committee chair is held by a member of the board. The committee meets a minimum of four times a year. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

The external auditors report to the committee at least once a year. Committee duties include the following: 

- Considering strategic issues, including planning and risk. 

- Reviewing drafts of financial policies, budgets and annual accounts. 

- Reviewing the management accounts and statutory accounts. 

- Monitoring and advising on internal financial controls. 

These functions and activities do not absolve the full Board of Directors of its legal responsibilities. 

The **Nominations Committee** consists of two or three board members. Its key responsibility is to manage the appointment and election of board members. 

The **Membership Committee** ensures that decisions on ISEAL community membership and decisions on ISEAL member Code compliance are taken consistently, competently and impartially. The committee is composed of five to seven individuals. The committee members are drawn from the staff of ISEAL Code Compliant and ISEAL Community Members. Members of the committee are appointed by decision of the board. 

The **Technical Committee** is responsible primarily for technical oversight of the ISEAL Codes of Good Practice and other credibility tools. The committee brings together representatives from both ISEAL members and external stakeholders who have a strong overall understanding of sustainability standards. It is composed of up to nine individuals, of which one-third are staff at a member organisation. Two-thirds are external experts drawn from non-member sustainability initiatives or other stakeholder groups (e.g., businesses, producers, governments, NGOs), or they are independent experts. The Technical Committee has responsibility for approving the content of new and revised Codes. Decisions of the committee are then formally approved by the board directors, who make their decision based solely on the quality of the Code development or revision process followed. 

## Management 

Day-to-day operation of the organisation is delegated to the executive director and the senior leadership team. The Chair of the Board of Directors is responsible for assessing the pay and performance of the executive director. All staff remuneration is reviewed annually and regularly benchmarked against externally prepared reports. 

## Fundraising 

ISEAL employs one professional staff member who is tasked with negotiating with institutional donors for contracts and grants for ISEAL to deliver its charitable work. From 2023, in line with the Statement of Recommended Practice, these costs have been reflected under the heading support costs, rather than fundraising costs. Further information is provided in notes 3 and 6 to the Financial Statements. 

ISEAL does not raise money from the general public. ISEAL does not employ outside fundraising consultants or similar commercial services, nor did ISEAL receive any complaints around fundraising, or the staff engaged in fundraising, in 2023. ISEAL undertook no fundraising requiring disclosure under S162A of the Charities Act in 2016. The majority of ISEAL’s charitable income continues to come from institutional sources (foundations/trusts and government bodies) that are not domiciled in the United Kingdom. While ISEAL does not fundraise from individuals, the organisation is in full compliance with the General Data Protection Regulation (GDPR) rules in respect of personal data. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Financial review** 

## Income and funding sources 

Total income increased from £3.0m in 2022 to £4.2m in 2023. The increase was across both restricted grantfunded activities and unrestricted membership-funded activities, giving ISEAL a healthy balance of restricted and unrestricted income. Income from grant-funded activities increased from £2.0m to £2.9m, mainly due to increase in income from SECO for ISEAL’s project on “Transparency and Innovation of Sustainability Standards”, which runs from October 2022 to December 2026. Membership income increased from £0.7m to £1.1m due to increasing numbers of members over recent years. 

In December 2023 ISEAL signed a £10.2m contract funded by UK International Development from the UK Government for a project starting in January 2024. Although this has no impact on the accounts to December 2023, ISEAL anticipates further significant growth in 2024 with income around £6m. The strong financial position means ISEAL is well placed to manage this growth. 

## Investment policy 

ISEAL has no investments. Current assets are invested in cash deposits. 

## Reserves policy 

## Expenditure 

Expenditure increased from £3.0m to £3.8m. This reflects mainly an increase in direct charitable expenditure (i.e. excluding grants and support costs) from £1.6m to £2.3m. More work is being done across all of ISEAL’s strategic priorities, but with particular increases in expenditures that address sustainability issues and support effective use of credible sustainability systems. 

ISEAL’s expenditure can often fluctuate due to grants made through the Innovations Fund, although this was relatively stable between 2022 and 2023. 2022 saw the final disbursements of payments under the first phase of the Innovation Fund. 2023 saw the initial payments on the second phase which form part of the above-mentioned “Transparency and Innovation  of Sustainability Standards” project. 

The Board of Directors examines ISEAL’s requirements for reserves in light of the main risks to the organisation and is satisfied that the current reserves are sufficient to meet ISEAL’s funding requirements over the next 12 months. The board regularly reviews the level of reserves as part of its oversight. The board’s review in 2023 recognised that significant growth was likely over the coming years, with potential risks associated with that. They therefore adapted the target reserve so that in future ISEAL will aim to hold reserves within the range of 3-4 months of ongoing staff and overhead expenditure. 

Total funds held at the end of 2023 amounted to £1.07m. After deducting balances that have been designated, restricted funds and the charity’s small investment in fixed assets, there remains £822k of free reserves. This is equivalent to 3.6 months of salary and overhead costs and is within the board’s reserve target. 

## Financial position and looking ahead 

ISEAL finished the year in a strong position. The increase in income allowed an unrestricted surplus of £203k to be retained within unrestricted reserves, so that the year-end reserves are equivalent to 3.6 months of salary and overhead expenditure. 

ISEAL’s closing bank balance of £5.7m is strong. This includes £4.3 million of funds received from funders for future years. The largest element of this is £2.6m from the SECO funded project mentioned above, and £1.2m from the Walmart Foundation for their project “Strengthening certification systems to deliver on deforestation and conversion free goals”, which runs from October 2023 to December 2025. 

## Going concern 

The board has reviewed ISEAL’s latest income and expenditure and cash flow forecasts, paying particular attention to the risks to income, reserves and liquidity levels. The board has concluded that there are sufficient reserves held to create a reasonable expectation that ISEAL has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to prepare the financial statements on a going concern basis. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
Statement of the Board of
Directors, responsibilities
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hence for taking reasonable steps for the prevention
8nd detection ol fraud and other irregularities.
Statement as to disclosure to our auditors
Each member of the Board of Directors confirms that..
So far a5 each board director 15 aware, there 15 no
relevant audit information of which the charitable
company's auditor is un3ware.' and
Company law requires the b03rd to prepare financi31
statements for each financial year that give a true and
fair view of the state of affairs of the company and of
the incoming resources and application of resources,
including th& income and expenditure, for that period.
Each board director has taken all the steps that he/
she ought to have taken as a director in order to
Make himself/herself aware of 3ny relevant audit
inforrnation and to establish that the charitable
company's auditor is aware ol that information.
In preparing these financial statements, the board is
required to..
This confirmation is given and should be
interpreted in accordance with the provisitsns
of $418 of the Companies Act 2006.
Select suitable accounting policies and then applv
them consistently.
Observe the method5 and principles of Accounting
and Reporting by Charities.. Statement of
R&commended Practice applicable to charities
preparing their account5 in accordance with the
Financial Reportin£ Standard applicable to the United
Kingdom and Republic of Ireland IFRS 1021.
The trustees, report has been prepared in acctsrdance
with the special provisions applicable to companies
subject to the small cornpanies, regirne.
Approved by the Board of Dlrectors on
and signed on its behalf by..
Make jud8ernent5 and accounting estimates that
are reasonable and prudent.
State whether applicable UK accounting standards
have been followed, subject to any rnaterial
departures disclosed and explained in the
financial staternent5.
13105124
Prepare the financial statements on the EoinE concern
basis unless it is inappropriate to presume that the
charitable company will continue in operation.
Chrlstopher Harvey Nlnnes
Trustee/Director, Board Chair
16

ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Reference and administrative details** 

## ISEAL Alliance registered details 

**Registered charity name** ISEAL Alliance 

**Charity registration number** 1199607 

**Company registration numbe** r 04625800 

**A McClay** | Better Cotton Initiative 

**A Morgan** | Rainforest Alliance (Resigned 31 May 2023) 

**D Morley** | Bonsucro 

**C Ninnes** | Aquaculture Stewardship Council Chair 

**N Schuler** | Independent 

**Principal office** 

The Green House, 244-254 Cambridge Heath Road, London E2 9DA 

**Registered office** 

The Green House, 244-254 Cambridge Heath Road, London E2 9DA 

## The ISEAL Board of Directors 

The board directors who served the company during the period and since the balance sheet date were: 

**K Bose** | Independent 

**A Cox** | Rainforest Alliance (Appointed 4 October 2023) 

**J D’Cruz** | Roundtable on Sustainable Palm Oil (Appointed 8 March 2023) 

**M Grant** | Responsible Jewellery Council (Appointed 8 March 2023) 

**N Guichoux** | Marine Stewardship Council (Resigned 8 March 2023) 

**F Harnischfeger** | Forest Stewardship Council (Resigned 31 May 2023) 

**M Kim** | Gold Standard (Appointed 8 March 2023) 

**L Tyler** | Textile Exchange (Resigned 8 March 2023) 

**I Van der Veken** | Responsible Jewellery Council (Resigned 8 March 2023) 

## Senior leadership team 

**T Espley** Company Secretary (Appointed October 2023) 

**K Kreider** Chief Executive Officer 

**Dr K Komives** Director of Programmes 

**P Mallet** Director of Innovations 

**P Wilson** Company Secretary (Resigned October 2023) 

## Advisors 

**Auditors** Buzzacott LLP, 130 Wood Street, London, EC2V 6DL 

**Bankers** Barclays Bank Plc, 89 Charterhouse Street, London, EC1M 6PE 

**A Lim** | Independent 

17 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Independent auditor’s report on the financial statements** 

## Independent auditor’s report to the members of ISEAL Alliance 

## Opinion 

We have audited the financial statements of ISEAL Alliance (the ‘charitable company’) for the year ended 31 December 2023 which comprise the statement of financial activities, the balance sheet, and statement of cash flows, the principal accounting policies and the notes to the financial statements. 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: 

- give a true and fair view of the state of the charitable company’s affairs as at 31 December 2023 and of its income and expenditure for the year then ended; 

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and 

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

## 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 charitable company 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 other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report and financial statements. 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. 

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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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. 

18 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## Opinions on other matters prescribed by the Companies Act 2006 

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

- the information given in the trustees’ report, which is also the directors’ report for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and 

- the trustees’ report, which is also the directors’ report for the purposes of company law, has been prepared in accordance with applicable legal requirements. 

## 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: 

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or 

- the financial statements are not in agreement with the accounting records and returns; or 

- certain disclosures of trustees’ remuneration specified by law are not made; or 

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

- the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies’ exemptions in preparing the trustees’ report and from the requirement to prepare a strategic report. 

## Responsibilities of trustees 

As explained more fully in the trustees’ responsibilities statement, 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. 

## 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 noncompliance 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: 

- We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements for charities operating within this sector, through our own experience as well as through discussion with management and those charged with governance and inspection of correspondence. We reviewed policies and procedures regarding compliance with laws and regulation and remained alert throughout our audit to any indications of non-compliance, with areas of highest risk communicated to all members of the audit team. 

19 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
The charity IS Subject to law5 and regulation5 directly
affecting the financial statements including financial
reporting leEislation and taxation legislation which
we assessed compliance with as part of our review
of related financial statement item5. This include5
the Companies Act 2006 and Charities Act 2011.
Use of our report
Thi5 report is made solely to the charitable cornpany'5
members, as a bodyi in accordance with Chapter 3 01
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 reouired 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 re5pon5ibility to anyone other than
the charitable company and the charitable company's
members as a body, for our audit work, for this report.
tsr for the opinions we have forrned.
We assessed the 5U5ceptibility of the company'5
financial statements to rnaterial mi55taternent,
including obtaining an understanding of how fraud
Might occur, by..
makin£ enquiries of management as to where
they considered there was susceptibility to fraud,
their knowledge of actual, suspected and alleged
fraud,. and
considering the internal controls in p13ce to
mitigate risk5 of fraud and non-cornpliance with
laws and regulations.
To address the risk of fraud through management
bias and override of controls, we..
Catherlne Blscoe
Senior St3tutory Auditor
performed analytiC81 procedur&s to identify any
unusu31 or unexpected relationships..
For and on behalf of Buzzacoit LLP. 5tatuiory Audltor
130 Wood Street.
London,
EC2V 6DL
assessed whetherjudgemenrs and assumptions
m8de in det&rrnining the accounting estimates set
out in the accounting policies were indicative of
potential bias,. and
Date 13 May 2024
investigated the rationale behind Significant or
unusual transactions.
There 3re inherent limitations in our audit procedures
described above. The tnore removed that laws and
regulations are from financial transactions, the less likely
it is that w@ would become aw8r& ol non-compli8nce.
Auditing stzndzrds a150 limit the audit procedures required
to identify non-compliance with laws and regulations to
enquiry of the trustees 3nd other management and the
inspection of regulatory and leg31 correspondenc&. if any.
Material misstatÈments that arise due to fraud can be
harder to detect than those that arise from error a5
they rnay involve deliberate concealrnent or collusion.
A further description of our responsibilities is
available on the Financial Reporting Council'5 website
at www.frc.org.uklauditorsresponsibilities. This
description forms part of our auditor's report.
20

ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## FINANCIAL STATEMENTS 

FOR THE YEAR ENDED 31 DECEMBER 2023 

**21** 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

**Statement of financial activities** (including income and expenditure account) for the year ended 31 December 2023 

## **UNRESTRICTED FUNDS** 

||**UNRESTRICTED FUNDS**|
|---|---|
|**Note**<br>**Income**<br>Income from charitable activities<br>2<br>Interest income<br>**Total Income**<br>**Expenditure**<br>Expenditure on raising funds<br>3<br>Expenditure on charitable activities<br>4<br>**Total Expenditure**<br>**Net movement in funds and net income (expenditure)**<br>**Funds at 31 December 2021**<br>**Funds at 31 December 2022**<br>**Note**<br>**Income**<br>Income from charitable activities<br>2<br>Interest income<br>**Total Income**<br>**Expenditure**<br>Expenditure on raising funds<br>3<br>Expenditure on charitable activities<br>4<br>**Total Expenditure**<br>**Net movement in funds and net income (expenditure)**<br>**Funds at 31 December 2022**<br>**Funds at 31 December 2023**|General<br>Funds<br>Designated<br>Funds<br>Restricted<br>Funds<br>**Total Funds**<br>**2023**<br>£'000<br>£'000<br>£'000<br>**£'000**<br>1,204<br>-<br>2,939<br>4,143<br>38<br>-<br>-<br>38|
||1,242<br>-<br>2,939<br>**4,181**|
||-<br>-<br>-<br>-<br>1,037<br>-<br>2,783<br>3,820|
||1,037<br>-<br>2,783<br>**3,820**|
||205<br>-<br>156<br>361<br>650<br>60<br>-<br>710|
||855<br>60<br>156<br>**1,071**|
||**UNRESTRICTED FUNDS**<br>General<br>Funds<br>Designated<br>Funds<br>Restricted<br>Funds<br>**Total Funds**<br>**2022**<br>£'000<br>£'000<br>£'000<br>**£'000**<br>973<br>-<br>2,057<br>3,030<br>-<br>-|
||973<br>-<br>2,057<br>**3,030**|
||34<br>-<br>92<br>126<br>904<br>40<br>1,965<br>2,909|
||938<br>40<br>2,057<br>**3,035**|
||35<br>(40)<br>-<br>(5)<br>615<br>100<br>715|
||650<br>60<br>-<br>**710**|



There were no recognised gains or losses other than those included in the Statement of Financial Activities. All Income and Expenditure derive from continuing activity. 

22 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
Balance sheet
as at 31 December 2023
Note
2023
2022
£'ooo
£'ooo
Fixed Assets
Tangible a55et5
li
33
40
Current Assets
Debtors
12
251
204
Cash at bank and in hand
5,672
5,923
3,531
3.735
Creditors: Amount5 falling due within one year
Net current assets
13
14,8851
1,038
13,0651
670
Total assets less total Ilabllltles
1,071
710
Funds
Unrestricted funds- General Funds
895
650
Unrestricted funds- Designated Funds
Restricted funds
19
60
60
14
156
Total Funds
1,071
710
The financial statements on pages 21 to 42 were approved and authorised lor issue by the Board of Directors
on
and signed on their behalf by..
13105124
Christopher Harvey Ninnes
Trustee/Director, Board Chalr
Company Registration Number 04625800
23

ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **Statement of cash flows** 

for the year ended 31 December 2023 

|Cash in hand<br>**Total cash and cash equivalents**<br>**Cash flows from operating activities:**<br>Net cash provided by operating activities<br>**Cash flows from investing activities:**<br>Proceeds from the sales of fixtures and equipment<br>Interest income<br>Purchase of fixtures and equipment<br>**Net cash provided by (used in) investing activities**<br>**Change in cash and cash equivalents in the reporting period**<br>**Cash flows**<br>**Foreign exchange movements**<br>**Cash and cash equivalents at the beginning of the reporting period**<br>**Cash and cash equivalents at the end of the reporting period**<br>**Statement of cash flows**<br>**Net income / (expenditure) for the reporting period**<br>**(as per the statement of financial activities)**<br>**Adjustments for:**<br>Amortisation and depreciation charges<br>Loss on the sale of fixed assets<br>Interest Income<br>(Increase) in debtors<br>Increase in creditors<br>**Net cash provided by operating activities**<br>**Reconciliation of net income / (expenditure)**<br>**to net cash flow from operating activities**<br>**Analysis of cash and cash equivalents**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>2,124<br>1,591|
|---|---|
||-<br>-<br>38<br>-<br>(21)<br>(35)|
||17<br>(35)|
||2,148<br>1,473<br>(7)<br>83|
||2,141<br>1,556<br>3,531<br>1,975|
||**5,672**<br>**3,531**|
||**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>361<br>(5)<br>27<br>37<br>1<br>2<br>(38)<br>-<br>(47)<br>(53)<br>1,820<br>1,610|
||**2,124**<br>**1,591**|
||**2023**<br>**2023**<br>**£'000**<br>**£'000**<br>5,672<br>3,531|
||**5,672**<br>**3,531**|



24 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023
NOTES
TO THE
FINANCIAL
STATEMENTS
25

ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **1. Principal accounting policies** 

## Statutory information 

ISEAL Alliance is a company limited by guarantee and is incorporated in the United Kingdom. The registered office address is The Green House, 244-254 Cambridge Heath Road, London, E2 9DA. ISEAL was incorporated on 30 December 2002 (registered number 04625800) and was registered as a charity on 8 July 2022 (charity number 1199607). ISEAL is governed under its Articles of Association (amended 2 November 2023). 

## Basis of preparation 

The financial statements 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 United Kingdom and Republic of Ireland (FRS 102) (Charities SORP FRS 102), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), Companies Act 2006 and the Charities Act 2011. The charity constitutes a public benefit entity as defined by FRS 102. 

The financial statements have been prepared on the historical cost basis and are presented in Pounds Sterling rounded to the nearest thousand pounds. The functional currency of the charity is Pounds Sterling because that is the currency of the primary economic environment in which it operates. Comparative information is displayed for the year ended 31 December 2022. 

## Going concern 

The Directors consider that there are no material uncertainties about ISEAL’s ability to continue as a going concern. The Directors approve annual budgets and periodic forecasts to ensure that there is sufficient working capital to meet the charity’s obligations over the subsequent 12 months. ISEAL meets its ordinary working capital requirements through existing cash balances. The Directors are of the opinion that, despite current inherent uncertainties, there is no significant threat that ISEAL will not be a going concern or be unable to meet its current commitments for a period of at least twelve months from the date of signature of these financial statements. 

## Critical accounting estimates and areas of judgement 

Preparation of the financial statements requires the Directors and management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include: 

- Estimating the liability for multiyear project grant commitments, including how much income to defer or accrue and how much income to recognise from the project grant to cover support costs 

- Estimating the useful economic life of tangible fixed assets 

## Income 

Income represents annual subscriptions received from members, grant income from foundations and government agencies and income from other projects and events. 

Annual membership subscriptions’ income is recognised over the year to which it relates. The membership year is the same as the accounting year. 

Income from grants is included within income when it is receivable, except as follows: 

- When donors specify that grants given to ISEAL must be used in future accounting periods, the income is deferred until those periods. 

- When donors impose conditions, which must be fulfilled before ISEAL becomes entitled to use such income, and those conditions have not been met, the income is deferred and not included in income until the pre-conditions for use have been met. 

In the absence of specific milestones or other conditions to determine entitlement, income is recognised to the extent that resources have been committed to the specific project, as this is considered to be a reliable estimate of the right to receive payment for the work performed. In this case, cash received 

26 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

in excess of expenditure is included as a creditor (deferred income) and expenditure in excess of cash included as a debtor (accrued income). 

## Expenditure 

Resources expended are included in the Statement of Financial Activities on an accruals basis, inclusive of VAT that cannot be recovered. Since 1st August 2021, ISEAL has been registered for VAT. Input tax is partially recovered on a business: non-business basis. 

Expenditure on raising funds comprises expenditure incurred in encouraging others to make contributions to the charity and includes staff costs directly attributable to that activity. Expenditure on charitable activities comprises expenses incurred on the defined charitable priority of the charity and include staff costs attributable to the charitable activities. 

Support costs represent indirect charitable expenditure. In order to carry out the primary purposes of the charity it is necessary to provide support in the form of personnel development, financial procedures, provision of office services and equipment and a suitable working environment. Support costs have been allocated by applying bases consistent with the use of the resource.Staff costs are apportioned within charitable activities on a time spent basis. 

## Interest receivable 

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by ISEAL; this is normally upon notification of the interest paid or payable by the bank. 

## Operating leases 

Rental charges are charged on a straightline basis over the term of the lease. 

## Monetary assets 

Monetary assets and liabilities in foreign currencies are translated into pounds sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into pounds sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the surplus or deficit for the period. 

## Financial Instruments 

ISEAL only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. 

## Tangible Fixed Assets 

Items of equipment are capitalised where the purchase price exceeds £1,000. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use. 

Depreciation is calculated to write down the cost less estimated residual value of all property, plant and equipment, other than freehold land, over their expected useful lives, using the straightline method. The rates applicable are: 

|Fixtures and fittings|25% straight line|
|---|---|
|Equipment|33% straight line|
|Leasehold improvements|Over the period of the lease|



## Debtors 

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. 

## Cash at bank and in hand 

Cash at bank and in hand includes cash and short term highly liquid investments. 

## Creditors 

Short term trade creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. 

27 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## Grants payable 

Grants payable are made to third parties in furtherance of the ISEAL Innovations Fund projects. Grants are accounted for when the recipient has a reasonable expectation that they will receive a grant and the ISEAL Innovations Fund has agreed to pay the grant without condition. 

## Taxation 

As a registered charity, there is no liability for income or corporation tax on income derived from charitable activities. 

## Pensions 

ISEAL makes payments to defined contribution pension schemes on behalf of employees who wish to join. The assets of these schemes are held separately from those of ISEAL in independently administered funds. The pension cost charge represents contributions payable to the funds during the year. ISEAL has no liability under the schemes other than the payment of those contributions. 

## Fund accounting 

Restricted funds comprise monies raised for, or their use restricted to, a specific purpose, or contributions subject to donor imposed conditions. Details of the specific restricted funds held by the charitable company are detailed in note 14. 

Unrestricted funds represent those monies which are freely available for application towards achieving any charitable purpose that falls within the charitable company’s charitable objects. 

Designated funds comprise monies set aside out of unrestricted funds for specific future purposes or projects. 

28 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

|Grants from government entities to fund projects<br>Grants from other charitable institutions to fund projects<br>**Restricted - Total grant income from donors as analysed below**<br>Members' contributions<br>Compliance and Services Fees<br>Interest income<br>**Total unrestricted income**<br>**Total income**<br>**2. Income from charitable activities**<br>Swiss State Secretariat for Economic Affairs SECO<br>CGIAR International Food Policy Research Institute<br>CGIAR Bioversity International<br>UNDP-led Good Growth Partnership, under the GEF-funded Food<br>Systems, Land Use and Restoration (FOLUR) Impact Program<br>GIZ<br>Fairtrade USA and Ethical Tea Partnership<br>UKRI - Horizon Europe Guarantee<br>IDH - the Sustainable Trade Initiative<br>IDH - the Sustainable Trade Initiative & Rainforest Alliance<br>Laudes Foundation<br>ISEAL Members<br>[Dutch] Ministry of Foreign Affairs<br>University of Greenwich Natural Resources Institute<br>The David and Lucile Packard Foundation<br>Walmart Foundation<br>Walton Family Foundation<br>WWF<br>**Restricted grant income from donors was as follows:**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>1,882<br>1,257<br>1,057<br>800|
|---|---|
||**2,939**<br>**2,057**|
||1,117<br>775<br>87<br>198<br>38<br>-|
||**1,242**<br>**973**|
||**4,181**<br>**3,030**|
||**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>1,559<br>1,067<br>152<br>109<br>27<br>36<br>76<br>30<br>112<br>141<br>16<br>8<br>106<br>11<br>114<br>97<br>60<br>1<br>-<br>11<br>33<br>65<br>29<br>19<br>-<br>5<br>308<br>137<br>341<br>290<br>6<br>-<br>-<br>30|
||**2,939**<br>**2,057**|



29 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

|**3. Expenditure on raising funds**<br>**General fundraising activities:**<br>Salaries<br>Other expenditure|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>-<br>118<br>-<br>8|
|---|---|
||**-**<br>**126**|



After a review of costs, work done to negotiate contracts and grants for charitable work have been reclassified as support costs in 2023. 

## **4.  Expenditure on charitable activities analysed by strategic priority** 

|Inspiring solutions to sustainability challenges<br>Strengthening accuracy, reliability<br>and resilience<br>Broadening the applicability of ISEAL’s<br>credibility tools<br>Supporting effective use of credible<br>sustainability systems<br>Growing a dynamic learning community<br>Organisational Resilience<br>Inspiring solutions to sustainability challenges<br>Strengthening accuracy, reliability<br>and resilience<br>Broadening the applicability of ISEAL’s<br>credibility tools<br>Supporting effective use of credible<br>sustainability systems<br>Growing a dynamic learning community<br>Organisational Resilience|Grant<br>payments made<br>Activities<br>undertaken directly<br>Support<br>costs<br>**2023**<br>£'000<br>£'000<br>**£'000**<br>231<br>695<br>328<br>1,254<br>231<br>348<br>176<br>755<br>-<br>231<br>110<br>341<br>-<br>466<br>176<br>642<br>-<br>513<br>291<br>804<br>-<br>15<br>9<br>24|
|---|---|
||462<br>2,268<br>1,090<br>**3,820**|
||Grant<br>payments made<br>Activities<br>undertaken directly<br>Support<br>costs<br>**2022**<br>£'000<br>£'000<br>**£'000**<br>270<br>483<br>129<br>882<br>270<br>328<br>88<br>687<br>-<br>172<br>43<br>216<br>-<br>220<br>46<br>266<br>-<br>414<br>113<br>527<br>-<br>-<br>331<br>331|
||540<br>1,618<br>751<br>**2,909**|



Support costs have been allocated to strategic priority by a combination of the staff time spent directly on the related activities, and the total direct costs of those activities. 

30 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **5. Grant making / ISEAL Innovation Fund** 

The ISEAL Innovation Fund encourages institutional grantees to explore new, ambitious ways to boost the impact and value of sustainability systems, driving experimentation and innovation. Grants made by the Fund generate valuable insights on a range of themes central to making sustainability systems more efficient, effective and inclusive. Themes include leveraging data and technology, risk-based approaches to assurance, addressing producer needs, and delivering impact at landscape level. Results from Fund projects are shared, including through live workshops. 

- Key outputs from the Fund's past portfolio of projects can be found here: www.isealalliance.org/innovations standards/ innovations-projects 

|innovations-projects|||
|---|---|---|
||**2023**|**2022**|
||**£'000**|**£'000**|
|**The total grants recognised during the year amounted to**|462|540|
|Grant commitments outstanding at the end of the year amounted to|508|-|



|**Grantee**<br>**Grant project**<br>Climate Neutral<br>Strengthening knowledge on insetting practices<br>Copper Mark<br>Artisanal and small-scale copper mining in Peru<br>Marin Trust<br>Comprehensive evaluation of environmental impacts and<br>compliance barriers in the MarinTrust programme: a focus<br>on Improver Programme factories<br>Goodweave<br>Detecting forced labour in supply chains: effective<br>assessment methodologies<br>Better Cotton<br>Promoting robust GHG accounting, reporting, claims and<br>incentives: approaches for agricultural commodity supply<br>chains<br>Assurance Services International<br>Smart assurance: From global monitoring to local action -<br>Validating compliance through combining satellite-based<br>monitoring and AI-driven insight generation with response<br>mechanisms and UAV-supported ground truth<br>Union of Ethical Biotrade<br>DoSomething: Enhancing access to remedy for human rights<br>violations in the botanicals sector<br>Sustainable Agricultural Network<br>Expansion of Blueprint sustainability assessment to build a<br>common territorial agenda<br>Global Infrastructure Basel<br>Due diligence multilevel reporting<br>Rainforest Alliance<br>Embedding worker-led approaches to human rights due<br>diligence into agricultural sustainability systems<br>Fairtrade International<br>Facilitating rightsholder dialogue in human rights and<br>environmental due diligence<br>Forest Stewardship Council<br>Development of traceability systems equipped for the<br>transfer of climaterelated data across complex supply chains<br>Sustinable Biomass Programme<br>Joining efforts in a Risk Information Alliance<br>**Total grants made**<br>**Grants made by the Fund during the year were as follows:**|**2023**|
|---|---|
||**(CHF '000)**|
|||
||10|
||10|
||5|
||40|
||60|
||40|
||30|
||36|
||52|
||52|
||70|
||52|
||52|
||**509**|



31 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **5. Grant making / ISEAL Innovation Fund (continued)** 

|**Grantee**<br>**Grant project**<br>Better Cotton Initiative<br>Bridging the Gap in Measuring Real-Time Sustainability Performance<br>Forest Stewardship Council<br>Creating an Information and Data Standard<br>Rainforest Alliance<br>An Accountability Framework to Mainstream Responsible Production<br>and Trade for Agriculture and Forestry<br>Aquaculture Stewardship Council<br>Integration of Seafood Certification and Jurisdictional<br>Assurance Models<br>Steel Stewardship Council<br>Mining, Minerals and Metals (M3) Standards Partnership:<br>Alignment and collective action to drive improvement<br>Bonsucro<br>Assessing and designing outcome-based standards:<br>a landscape approach<br>Sustainable Agriculture Network<br>Development of an evaluation framework and pilot phase<br>in a banana and palm growing municipality<br>Bonsucro<br>Enabling access to preferential finance terms as an incentive for<br>improving sustainability performance in the agricultural sector<br>Roundtable on Sustainable<br>Biomaterials<br>Case study application of the FPIC-360 Tool for Monitoring and<br>Verifying Free Prior and Informed Consent.<br>GEO Foundation<br>Sustainability Reporting for Sport<br>Rainforest Alliance<br>Use of risk maps for child and forced labour in risk-based<br>assurance processes<br>Fairtrade Foundation<br>Delta Pilot<br>Gold Standard Foundation<br>A shared value approach to climate impact at landscape scale<br>Rainforest Alliance<br>Tech4Communities: Hybrid Community-Based Monitoring<br>System (HCMS)<br>Textile Exchange<br>Impact Alliance – Scoping Phase<br>Max Havelaar<br>Landscape Assurance Framework for Social Indicators<br>Alliance for Water Stewardship<br>Boosting sustainability practice and performance at the landscape<br>level through good water stewardship<br>Better Cotton Initiative<br>Adaptation to Landscape Approach (ATLA)<br>Textile Exchange<br>Delta Pilot<br>Better Cotton Initiative<br>Piloting remote survey technology for farmers and<br>workers in Pakistan<br>Fair Trade USA<br>Factory Hybrid Audit Pilot<br>Linking Environment and Farming<br>Development of a transition process towards a LEAF Marque hybrid<br>assurance model informed by risk-based data<br>Responsible Jewellery Council<br>Hybrid and remote audits<br>Swiss Fair Trade<br>Digital conference: Strengthening Fair Trade in a COVID19 - Build Back<br>Fairer Sustainability context<br>Global Infrastructure Basel Foundation<br>Sustainability Infrastructure Intelligence Tool<br>Bonsucro<br>Local implementation of grievance mechanisms for VSSs’ members<br>in alignment with UNGP and OECD<br>Assurance Services International<br>Risk-based approaches to assurance<br>GoodWeave International<br>Forced and Bonded Labour Rapid Assessment Tool<br>Evidensia<br>UNFSS collaboration on the VSS research step-up programme<br>Bonsucro<br>Collaboration in the Sugarcane Sector (earlier year adjustment)<br>**Total grants made**<br>**Grants made by the Fund during 2022 were as follows:**|**2022**|
|---|---|
||**(CHF '000)**|
|||
||50|
||25|
||-|
||60|
||62|
||50|
||70|
||2|
||14|
||-|
||-|
||5|
||53|
||15|
||30|
||30|
||15|
||29|
||6|
||-|
||-|
||-|
||-|
||-|
||25|
||25|
||8|
||25|
||-|
||(1)|
||**598**|



32 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

|Finance & professional<br>Human resources<br>Occupancy<br>IT and systems<br>Communications<br>Programme development<br>Governance<br>**6. Support costs**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>380<br>358<br>171<br>121<br>119<br>83<br>106<br>65<br>110<br>20<br>96<br>-<br>108<br>104|
|---|---|
||**1,090**<br>**751**|



After a review of costs, work done to negotiate contracts and grants for charitable work has been reclassified as a support cost in 2023. 

|Staff costs<br>Other costs<br>**7. Governance costs**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>104<br>86<br>4<br>18|
|---|---|
||**108**<br>**104**|



## **8. Net income / expenditure** 

|**ISEAL's net income / expenditure is stated**|**2023**|**2022**|
|---|---|---|
|**after crediting or charging:**|**£'000**|**£'000**|
|Fees payable to the auditors for statutory audit|22|14|
|Fees payable to the auditors for grant audits|6|-|
|Operating lease charges - land and building|43|42|
|Net gains / losses on foreign currency translations|(7)|(7)|
|Loss on fixed asset disposal|1|2|
|Depreciation|27|37|



33 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **9. Employees** 

|Wages and salaries<br>Social security costs<br>Pension<br>**Staff costs during the year were as follows:**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>1,937<br>1,672<br>215<br>168<br>99<br>77|
|---|---|
||**2,251**<br>**1,917**|



|**The number of staff employed by ISEAL during the**|||
|---|---|---|
|**year was as follows:**|**2023**|**2022**|
|Full Time Equivalent (FTE) during the year|37|31|
|Headcount during the year|39|32|



|**The number of employees whose emoluments**|||
|---|---|---|
|**amounted to over £60,000 in the year was as follows:**|**2023**|**2022**|
|£60,000  -  £69,999|5|4|
|£70,000  -  £79,999|2|1|
|£80,000  -  £89,999|-|-|
|£90,000  -  £99,999|1|2|
|£100,000  -  £109,999|1|-|
|£110,000  -  £119,999|-|1|
|£150,000 - £159,999|1|-|



Key management personnel are defined as the Directors and the senior leadership team. The Directors receive no remuneration. 

||**2023**|**2022**|
|---|---|---|
||**£'000**|**£'000**|
|Salary, pension and other benefits received by four senior|539|442|
|leadership team members|||



34 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

|**10. Directors' expenses**|**2023**|**2022**|
|---|---|---|
||**£**|**£**|
|ISEAL met travel expenses incurred by three of the Directors|555|Nil|
|in the charity's business totalling|||



ISEAL has paid for the management liability insurance for the Directors and its key employees with regard to their actions on behalf of ISEAL. 

||**2023**|**2022**|
|---|---|---|
||**£**|**£**|
|The insurance policy provided cover of £2m at a cost of|5,064|5,002|



## **11. Tangible fixed assets** 

|**Cost**<br>At 1 January 2023<br>Additions<br>Disposals / write offs<br>**At 31 December 2023**<br>**Depreciation**<br>At 1 January 2023<br>Charge for the year<br>Disposals / write offs<br>**At 31 December 2023**<br>**Net book value**<br>**At 31 December 2023**<br>At 31 December 2022|Leasehold<br>improvements<br>Fixtures and fittings<br>Equipment<br>**Total**<br>£'000<br>£'000<br>£'000<br>**£'000**<br>9<br>52<br>97<br>158<br>-<br>-<br>21<br>21<br>-<br>-<br>(4)<br>(4)|
|---|---|
||9<br>52<br>114<br>**175**|
||6<br>48<br>64<br>118<br>2<br>4<br>21<br>27<br>-<br>-<br>(3)<br>(3)|
||8<br>52<br>82<br>**142**|
||1<br>-<br>32<br>**33**|
||3<br>4<br>33<br>**40**|



35 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

|Trade debtors<br>Other debtors<br>Accrued income<br>Prepayments<br>**12. Debtors**<br>Accrued income includes the following amount<br>from restricted grant donors|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>20<br>15<br>8<br>20<br>208<br>162<br>15<br>7|
|---|---|
||**251**<br>**204**|
||**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>208<br>138|



|Trade creditors<br>Tax and social security creditor<br>**Deferred income**<br>Advance payments from donors<br>Other deferred income<br>Grant instalments payable<br>Accruals<br>**13. Creditors: amounts falling due within one year**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>72<br>58<br>106<br>39<br>4,205<br>2,846<br>45<br>23<br>256<br>-<br>201<br>46|
|---|---|
||**4,885**<br>**3,065**|



Deferred income includes £4,205,000 (2022:£2,846,000) in relation to amounts received for restricted projects in excess of the level of performance delivered. 

## **Movements in deferred income were as follows:** 

|||
|---|---|
|Deferred income brought forward<br>Amount released to income in the year<br>Amount deferred in the year<br>Balance at year end<br>**Movements in deferred income were as follows:**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>2,869<br>667<br>(2,869)<br>(667)<br>4,250<br>2,869|
||**4,250**<br>**2,869**|



36 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **14. Movement on restricted funds** 

|**Funder**<br>(see note 2 for full details)<br>**Project**<br>**note**<br>Swiss State Secretariat for Economic<br>Affairs SECO<br>1<br>Walmart Foundation<br>2<br>CGIAR International Food Policy<br>Research Institute<br>3<br>The David and Lucile Packard<br>Foundation<br>4<br>IDH - the Sustainable Trade Initiative<br>5<br>GIZ<br>6<br>UKRI -  Horizon Europe Guarantee<br>7<br>UNDP-led Good Growth Partnership,<br>under the GEF-funded Food Systems,<br>Land Use and Restoration (FOLUR)<br>Impact Program<br>8<br>IDH - the Sustainable Trade Initiative &<br>Rainforest Alliance<br>9<br>The David and Lucile Packard<br>Foundation<br>10<br>ISEAL Members<br>11<br>[Dutch] Ministry of Foreign Affairs<br>12<br>CGIAR Bioversity International<br>13<br>Walmart Foundation<br>14<br>Fairtrade USA and Ethical Tea<br>Partnership<br>15<br>UKRI -  Horizon Europe Guarantee<br>16<br>Walton Family Foundation<br>17<br>The David and Lucile Packard<br>Foundation<br>18|**Balance**<br>**1 January 2023**<br>Income<br>Expenditure<br>**Balance**<br>**31 December 2023**<br>**£'000**<br>£'000<br>£'000<br>**£'000**<br>-<br>1,559<br>(1,559)<br>-<br>-<br>324<br>(324)<br>-<br>-<br>152<br>(152)<br>-<br>-<br>115<br>(115)<br>-<br>-<br>114<br>(114)<br>-<br>-<br>112<br>(112)<br>-<br>-<br>91<br>(91)<br>-<br>-<br>76<br>(76)<br>-<br>-<br>60<br>(60)<br>-<br>-<br>35<br>(35)<br>-<br>-<br>33<br>(33)<br>-<br>-<br>29<br>(29)<br>-<br>-<br>27<br>(27)<br>-<br>-<br>17<br>(17)<br>-<br>-<br>16<br>(16)<br>-<br>-<br>15<br>(15)<br>-<br>-<br>6<br>(6)<br>-<br>-<br>158<br>(2)<br>156|
|---|---|
||**-**<br>2,939<br>(2,783)<br>**156**|



37 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **14. Movement on restricted funds (continued)** 

## **Movements on restricted funds in 2022 were as follows:** 

|**Funder**<br>(see note 2 for full details)<br>**Project**<br>**note**<br>Swiss State Secretariat for Economic<br>Affairs SECO<br>19<br>Swiss State Secretariat for Economic<br>Affairs SECO<br>1<br>CGIAR International Food Policy<br>Research Institute<br>3<br>CGIAR Bioversity International<br>13<br>UNDP-led Good Growth Partnership,<br>under the GEF-funded Food Systems,<br>Land Use and Restoration (FOLUR)<br>Impact Program<br>8<br>GIZ<br>21<br>GIZ<br>6<br>Fairtrade USA and Ethical Tea<br>Partnership<br>15<br>UKRI -  Horizon Europe Guarantee<br>7<br>IDH - the Sustainable Trade Initiative<br>5<br>Swiss State Secretariat for Economic<br>Affairs SECO<br>24<br>ISEAL Members (IPM Coalition)<br>11<br>Laudes Foundation<br>25<br>IDH - the Sustainable Trade Initiative<br>22<br>IDH - the Sustainable Trade Initiative &<br>Rainforest Alliance<br>9<br>[Dutch] Ministry of Foreign Affairs<br>12<br>University of Greenwich Natural<br>Resources Institute<br>26<br>The David and Lucile Packard<br>Foundation<br>4<br>The David and Lucile Packard<br>Foundation<br>18<br>Walmart Foundation<br>20<br>Walmart Foundation<br>2<br>WWF<br>23|**Balance**<br>**1 January 2022**<br>Income<br>Expenditure<br>**Balance**<br>**31 December 2022**<br>**£'000**<br>£'000<br>£'000<br>**£'000**<br>-<br>895<br>(895)<br>-<br>-<br>154<br>(154)<br>-<br>-<br>109<br>(109)<br>-<br>-<br>36<br>(36)<br>-<br>-<br>30<br>(30)<br>-<br>-<br>58<br>(58)<br>-<br>-<br>83<br>(83)<br>-<br>-<br>8<br>(8)<br>-<br>-<br>11<br>(11)<br>-<br>-<br>52<br>(52)<br>-<br>-<br>18<br>(18)<br>-<br>-<br>66<br>(66)<br>-<br>-<br>11<br>(11)<br>-<br>-<br>45<br>(45)<br>-<br>-<br>1<br>(1)<br>-<br>-<br>19<br>(19)<br>-<br>-<br>4<br>(4)<br>-<br>-<br>135<br>(135)<br>-<br>-<br>2<br>(2)<br>-<br>-<br>73<br>(73)<br>-<br>-<br>217<br>(217)<br>-<br>-<br>30<br>(30)<br>-|
|---|---|
||**-**<br>2,057<br>(2,057)<br>**-**|



38 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **14. Movement on restricted funds (continued)** 

## **The restricted funds relate to donors who have funded specific projects as follows:** 

**Notes** (project names): 

**1.** Transparency and Innovation of Sustainability Standards, Phase 2 

- **2** . Strengthening supplier engagement in landscape and jurisdictional initiatives 

- **3** . Rethinking food markets and value chains for inclusion and sustainability 

- **4** . Supporting Chinese commitments towards deforestation-free commodity supply chains 

- **5** . Strengthening sustainability standards systems to advance supply chain action on living wages 

- **6** . Scaling the Living Income concept, through collaboration and action, to deliver a decent standard of living 

- **7** . Sustainability Transition Assessment Rules for Bio-Based Systems (STAR4BBS) 

- **8** . Good Growth Partnership under the GEF Funded Food Systems, Land Use and Restoration (FOLUR) Impact Program 

- **9** . Effectiveness of supply chain sustainability approaches to deliver decent work goals: a systematic review 

- **10** . General operations 

- **11** . Engagement in China, pesticide management, living wage 

- **12** . Advancing thinking and action on access to remedy through sustainability standards and systems 

- **13** . Harnessing gender and social equality for resilience in agrifood systems 

- **14** . Strengthening certification systems to deliver on deforestation and conversion free goals 

- **15** . Background study for developing a living wage benchmark for tea-growing regions of Assam and West Bengal, India 

- **16** . Change to Concise consumer communication through robust labels for bio-based systems (3-CO) 

- **17** . Improving Equity and Livelihoods in Sustainable Value Chains through Producer Empowerment 

- **18** . Improving Understanding and Scaling Action on Equity and Livelihoods 

- **19** . Change to The Future of Sustainability Standards 

- **20** . Strengthening the credibility of jurisdictional sourcing 

- **21** . Ensuring Credible Effective Action for Sustainability 

- **22** . Supporting effective measurement, verification and improvement of living wage gaps 

- **23** . Development of a landscape assurance index in Sabah 

- **24** . Creating an information and data standard 

- **25** . Driving alignment for greater impact: implementing the Delta Framework in sustainable cotton 

- **26** .  Synthesis and critical assessment of management tools to mainstream biodiversity in decision-making in the private sector 

39 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **14a. SECO Fund statement** 

## **Transparency and innovation of sustainability standards Phase 2** 

|**Transparency and innovation**|**Deferred income**<br>**1 January 2023**<br>Receipts<br>Expenditure<br>Exchange<br>differences<br>**Deferred income**<br>**31 December 2023**<br>**£'000**<br>£'000<br>£'000<br>£'000<br>**£'000**|
|---|---|
|**of sustainability standards**||
|Innovations Programme|1,162<br>962<br>(1,048)<br>-<br>1,076|
|Innovations Fund|1,061<br>876<br>(511)<br>84<br>1,510|
|**Transparency and innovation**|**CHF '000**<br>CHF '000<br>CHF '000<br>CHF '000<br>**CHF '000**|
|**of sustainability standards**||
|Innovations Programme|1,320<br>1,100<br>(1,252)<br>1,168|
|Innovations Fund|1,200<br>1,000<br>(509)<br>1,691|
|**Transparency and innovation**<br>**of sustainability standards**<br>Innovations Programme<br>Innovations Fund<br>**Transparency and innovation**<br>**of sustainability standards**<br>Innovations Programme<br>Innovations Fund|**Deferred income**<br>**1 January 2022**<br>Receipts<br>Expenditure<br>Exchange<br>differences<br>**Deferred income**<br>**31 December 2022**<br>**£'000**<br>£'000<br>£'000<br>£'000<br>**£'000**<br>-<br>1,316<br>(154)<br>1,162<br>-<br>1,057<br>-<br>4<br>1,061<br>**CHF '000**<br>CHF '000<br>CHF '000<br>CHF '000<br>**CHF '000**<br>-<br>1,500<br>(180)<br>1,320<br>-<br>1,200<br>-<br>1,200|



40 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **15. Analysis of net assets between funds** 

|**Fund balances at 31 December 2023**<br>**as represented by:**<br>Tangible fixed assets<br>Current assets<br>Current liabilities<br>**Total net assets**<br>**Fund balances at 31 December 2022**<br>**as represented by:**<br>Tangible fixed assets<br>Current assets<br>Current liabilities<br>**Total net assets**|**2023**<br>General<br>Unrestricted<br>Funds<br>£'000<br>33<br>1,502<br>(680)|**2023**|**2023**<br>**2023**|
|---|---|---|---|
|||Designated<br>Unrestricted<br>Funds|Restricted<br>Funds<br>**Total**<br>**Funds**|
|||£'000|£'000<br>**£'000**|
|||||
|||-|-<br>33|
|||60|4,361<br>5,923|
|||-|(4,205)<br>(4,885)|
|||||
||**855**|**60**|**156**<br>**1,071**|
|||||
||**2022**<br>General<br>Unrestricted<br>Funds<br>£'000<br>40<br>829<br>(219)|**2022**|**2022**<br>**2022**|
|||Designated<br>Unrestricted<br>Funds|Restricted<br>Funds<br>**Total**<br>**Funds**|
|||£'000|£'000<br>**£'000**|
|||||
|||-|-<br>40|
|||60|2,846<br>3,735|
|||-|(2,846)<br>(3,065)|
|||||
||**650**|**60**|**-**<br>**710**|



## **16.  Related party transactions** 

As part of the Transparency and innovation of sustainability standards, phase 2 project, the ISEAL Innovations Fund has awarded grants equivalent to £461,363 (2022: £540,053) primarily to ISEAL members. Of this amount £255,615 (2022: nil) was outstanding at the balance sheet date. 

- Further details of the grants awarded can be found on the charity's website at: www.isealalliance.org/innovations - standards/innovations projects 

In 2022, one of those grants involved support from ISEAL equivalent to £9,693 for which ISEAL is entitled to be reimbursed; this did not occur in 2023. 

There were no other related party transactions to disclose for 2023 (2022: none). 

ISEAL is ultimately controlled by its members. No one member has more than 5% of the voting rights at a general meeting, so there is no single controlling party. 

Some board members hold senior executive positions within member organisations, as indicated within the trustees report. All transactions between ISEAL and its members are at the same arms-length terms. 

41 



ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 

## **17. Operating lease commitments** 

ISEAL has a lease for office space, which runs through to March 2026, although it may be terminated with four months’ notice. If not so terminated, future rental payments will be: 

||**2023**|**2022**|
|---|---|---|
||**£'000**|**£'000**|
|Due within one year|39|39|
|Due within two to five years|49|88|



## **18. Company limited by guarantee** 

Every guarantor member of ISEAL undertakes to contribute to the assets of ISEAL in the event of ISEAL being wound up while they are a guarantor member, such amounts as may be required not exceeding £10. 

## **19. Designated reserve** 

A designated reserve has been established for the purpose of funding the future costs of revisions to ISEAL's Codes of Good Practice and other credibility tools. 

|Balance at the start of the year<br>Transfer to (from) the fund<br>during the year<br>**Balance at the end of the year**|**2023**<br>**2022**<br>**£'000**<br>**£'000**<br>60<br>100<br>-<br>(40)|
|---|---|
||**60**<br>**60**|



The balance at the end of 2023 is expected to be drawn down against Codes revision expenditure during 2024. 

## **20. Post balance sheet events and going concern** 

The Directors have determined that there are no related post balance sheet events affecting the figures or disclosures in these financial statements. 

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ISEAL ALLIANCE ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 


## **ISEAL** 

The Green House 244-254 Cambridge Heath Road London E2 9DA United Kingdom +44 (0)20 3246 0066 info@isealalliance.org **www.iseal.org** 


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