DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEEI, CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 20241. The Science Based Targets initiative (SBTI) Annual Report and Consolidated Financial Statements For the period ended 31 December 2024 REGISTERED COMPANY NUMBER.. 14960097 (England and Wales) REGISTERED CHARITY NUMBER 1205768 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Content Administrative Details of the Charity, its Trustees andAdvisers............................................................. Trustees'Report (including Strategic Report)............................................................................................... Executive Summary- Strategic Report.............................................................................................................. Objectives andActivities........................................................................................................................................ Strurture Governance and Management........................................................................................................ Key risky and uncertainties.................................................................................................................................. Financial Review....................................................................................................................................................12 Plansforfuture periods.......................................................................................................................................1S Auditors....................................................................................................................................................................16 Trnstees. responsibilities....................................................................................................................................16 Public benefit disclosure.....................................................................................................................................16 IndependentAuditor's Report to the members......................................................................................19 Consolidated Statement of Financial Activities Incorporating Income and Expenditure Account..........................................................................................................................................................22 Consolidated Statement ofFinancial Position........................................................................................23 Consolidatedstatementof Cashflows......................................................................................................24 Notes to the Financial Stotements............................................................................................................25 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Administrative Details of the Charity, its Trustees and Advisers Board of Trustees Francesco Starace- Chair of the Board, and Chair of the Finance, Risk, Audit and Governance Committee (appointed on 18 September 2023) Ester Baiget- Trustee (appointed on 24 August 2023) Aniruddha Dasgupta - Trustee, member of the Finance, Risk, Audit and Governance Committee (appointed on 26 June 2023) Ivan Duque Marquez - Trustee (appointed on 24 August 2023> Maria Mendiluce Villanueva - Trustee, member of the Nominations Committee (appointed on 26 June 2023) Stscey Mitchell - Trustee, member of the Finan￿, Risk, Audit and Governance Committee (appointed on 14 December 2023) Manuel Pulgar-vidal - Trustee, member of the Nominations Committee (appointed on 26 June 2023) Nicolette Bartlett- Trustee (appointed on 26 June 2023 - resigned on 28 March 2024) Sherry Anne Madera - Trustee (appointed on 28 March 2024 - resigned on 10 September 2024) Chief Executive Officer Lulz Amaral - until 30th July 2024 Sue Jenny Ehr (Interim) - 1st August 2024 onwards Executive Leadership Team Alberto Carrillo Pineda - Chief Technical Officer Alex Buss - Chief Operating and Finance Officer Anita Sheth - Compliance Director Luisa Pastore - Director of Communications Tracy Wyman - Chief Impact OffI￿r Will Grazebrook - Head of Legal Independent Auditors: Crowe UK LLP, 4th Floor, St James House, St James Square, Cheltenham, GL50 3PR, UK. Company number: 14960097 Charity number: 1205768 Registered address: First Floor, 10 Queen Street Place, London, England, EC4R 1BE Solicitors.. Farrer & Co LLP, 66 Lincoln's Inn Fields, London WC2A 3LH, UK DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Trustees, Report (including Strategic Report) The Trustees, who are also the directors of Science Based Targets initiative ("SBTi" the'charity"), present their report and the consolidated financial statements for the Charity and its subsidiaries for the accounting period ended 26 December 2024. However, in accordance with Section 390 of the Companies Act 2006, the financial statements of the group and Charity have been prepared up to 31 December 2024. The Trustees, Report is also the Directors, Report as required by S.415 of the Companies Act 2006. The Trustees, report incorporates the "Strategic Report" required by S.414A of the Companies Act 2006. The consolidated financial statements comply with the requirements of the Companies Act 2006, the Charities Act 2011, the Charity's Articles of Association, "Accounting and Reporting by Charities,. Statement of Recommended Practice" applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective January 2019) "SORP 2019" and the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). Executive Summary- Strategic Report During the reporting period, the scale and scope of SBTI'S activities evolved. Significant progress was made towards the organisation's objective of enabling companies and financial institutions worldwide to play their part in combating the climate crisis. By the end of 2024, more than 6,900 corporates, financial institutions and small & medium size enterprises had set science-based greenhouse gas emission reduction targets, and by the end of the reporting period a further 2,775 had committed to set targets.. Companies with validated targets represent a 640/0 increase on the 4,200 companies with validated targets at the end of 2023. Additionally, in the reporting period, the SBTI transitioned to Independen￿ and transformed its governance. Urgency of the SBTI'S mission The latest climate science sends a clear warning that temperature rise must be dramatically curbed to avoid the catastrophic impacts of climate change. Through the 2015 Paris Agreement, governments across the world committed to limiting global temperature rise to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C. In 2018, the Intergovernmental Panel on Climate Change (IPCC) subsequently warned that global warming must not ex￿ed 1.5°C above pre-industrial temperatures to avoid the catastrophic impacts of climate change. DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). To achieve this, greenhouse gas (GHG) emissions must halve by 2030- and drop to net-zero by 2050. Business has a critical role to play in driving down greenhouse gas emissions and building the resilient, thriving net-zero economy we urgently need. This action must be grounded in science. The world needs a race to the top, led by pioneering companies. This will empower peers, suppliers and customers to follow suit. Science-based targets show companies and financial institutions by how much and how quickly they need to reduce greenhouse gas emissions to prevent the worst effects of climate change. Objectives and Activities The SBTI.. Defines and promotes best practi￿ in emissions reductions and net-zero targets in line with climate science. Develops standards, tools and guidan￿ to enable companies and financial institutions to set science-based targets in line with science. The SBTI'S wholly-owned subsidiary, SBTI Services, assesses and validates companies, and financial institutions, targets. Together, the SBTI group mobilises the private sector to take the lead on urgent climate action and enables companies and financial institutions to understand how much, and how quickly, they must decarbonise to prevent the worst impacts of climate change. Action is needed in key sectors, many of which require tailored approaches to setting emission- reduction targets. The SBTI provides clarity and guidan￿ on these journeys, including for the heavy emitting sectors such as buildings, steel, cement, and finance. By the end of 2024, almost 7,000 companies and financial institutions were leading the transition to a net-zero economy by having science-based emissions reduction targets validated by the SBTI group. The SBTI exists to further the charitable purposes of= 1. Promoting for the public benefit the conservation, protection and improvement of the physical and natural environment 2. Advancing education for the public benefit in the subject of climate change including by undertaking and promoting research in this subject and making the useful results of such research available to the public,. in particular, but not exclusively, by developing standards, guidance, tools and resources to enable the assessment of businesses, and institutions, DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). targets to reduce greenhouse gas emissions and the performan￿ of products, entities, and financial portfolios against greenhouse gas emission limits informed by science. The development of the SBTI During the reporting period, the SBTI notably expanded its impact as a result of step-changes in its governance, its operational capacity and capability, and its technical completeness. This resulted in a surge of companies setting and committing to set scien￿-baSed targets. The SBTI has focused on three main areas of organisational development.. 1. Robust standards development. The SBTI'S Standard Operating Procedure for the Development of Standards I'SOP") provides the organisation with a formal process which must be followed for the development and revision of all standards and has been critical for the ongoing credibility of its standard-setting. The SOP was formally adopted by the Board in December 2023. In addition, the SBTi's Technical Council sits as a deliberation and technical decision-making body with a broad range of independent representation, reviewing, approving and making recommendations on the adoption of SBTI standards, guidance and methods. The SBTI is also working towards membership of a recognised standards body to ensure the credibility of its standards. The initiation, research and initial drafting phase of a major revision of the SBTI'S Corporate Net-zero Standard was a key focus during this period, with an initial draft released for public consultation March 2025. Additionally, in July 2024, the SBTI published the Financial Institutions Net-zero Standard Consultation Draft, opened a public consultation and pilot testing with 15 financial institutions. During the reporting period it also carried out Iwo public consultations for a chemicals standard. 2. Ongoing engagement and impact. The SBTI increased engagement with SBTI standards across the global corporate accountability ecosystem and ensured inclusive stakeholder engagement during the standard development process (see above) through leveraging Expert Advisory Groups, meetings, public consultations, and pilot testing. Stakeholder engagement activities met target thresholds and diversity criteria, ensuring inclusivity for stakeholders affected by the standards. 3. Increased organisational capacity and capability. During the reporting period, the SBTI achieved strategic, operational and financial autonomy with a clear, independent governance structure. Achievements and erformance The SBTI had another suc￿Ssful year of operations and hit several significant milestones in furtheran￿ of its objectives. DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). By the end of 2024, almost 7,000 companies and financial institutions were taking ambitious climate action by setting emissions reduction targets in line with SBTI standards and having them validated by the SBTI group. Company Mobilisation: The SBTI initially set an internal target to achieve 5,000 companies mobilising for climate action through validated science-based targets or commitments by 2025. As this target became achievable, the SBTI raised the goal to 10,000 companies with established targets, or commitments to set them, by 2025. In a strong indication of both the private sector's growing appetite to decarbonise and the deployability of our standards via professionalised validation seNices, the SBTI nearly reached this revised target one year ahead of schedule in 2024. By the time of this report's publication in Q1 2025, the 10,000 target had already been surpassed. Validated Targets.. By the end of the reporting period, more than 6,900 companies had set either near- or long-term science-based targets and had them validated by the SBTI group. This represents a year-on-year increase compared to 2023 of nearly 65 % across the globe, with all regions representing high double digit growth in validated targets. Net-zero Targets.. As of the close of the reporting period, the targets of more than 1,400 companies had been validated in line with the SBTI'S flagship Corporate Net-zero Standard. Released in 2021, this world-first standard provided a robust framework to ensure that companies, net-zero targets are consistent with what is required to achieve net-zero no later than 2050 (or 2040 for the power sector and maritime transport). Appetite for net-zero targets expanded substantially in the reporting period, with an 87 % increase in the number of net-zero targets validated compared with the previous year. Commitments.. The SBTI recorded a 30 % growth in commitments made by organisations during 2024, with 2,900 pledging to setting science-based targets within 24 months from committing to set them. Commitments demonstrate an organisation's intention to develop targets and submit these for validation, with organisations not yet holding validated targets. Service digitisation.. As part of its strategy to digitise its services and improve customer experience, the SBTI deployed the first release of its technology plan in October 2024. The first key pillar in this programme was to establish a separate SBTI Services webpage to act as a central repository of all information and ServI￿S related to science-based target setting and making science-based target commitments. The second pillar was to launch the first iteration of the SBTI'S Validation Portal, enabling companies to register for validation services online, thereby streamlining the prO￿sS and making it more user friendly. More than 2,200 companies suc￿SsfUllY used the new SBTI Services Validation Portal to register with the SBTI in the first two monthsl within the reporting period. Expansions to the Validation Portal are planned for 2025. Queries: Reflective of the eX￿ptIOnal demand for target validation servI￿s, the SBTI re￿iVeS high volumes of enquiries from corporates and financial institutions. The response teams aim to DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). provide swift, comprehensive and clear responses to all enquiries to fast track corporate climate action. In the reporting period, the SBTI responded to more than 6,000 email queries from external stakeholders, reducing the average response time by more than 50 %. Structure, Governance and Management The SBTI was formed as an initiative in 2015 between five founding organisations., CDP Worldwide, the United Nations (UN) Global Compact, the We Mean Business Coalition {WMB}, the World Resources Institute {WRI) and the World Wide Fund for Nature (VVWF). The SBTI incorporated as a UK company limited by guarantee in June 2023 and was subsequently registered as a charity by the Charity Commission for England and Wales in November 2023. The objects and powers of the SBTI are set out in its Articles of Association ('Ihe Articles"), together with provisions relating to the governance of the SBTI. Under the Articles, four of the founding partners (CDP Worldwide, WMB, WRI and WWF) serve as the company members of the SBTI. Legal responsibility for the operation of the SBTI sits with the Board of Trustees ("the Board"), which at the date of this report comprises three Representative Trustees (appointed, subject to Board approval, by each of WMB, VVRI and WWF as company members of the SBTI) and four Independent Trustees. The UN Global Compact also appoints a Permanent UN Advisor who attends but does not vote at Board meetings. CDP Worldwide retains a right under the Articles to appoint a Representative Trustee,. this position is vacant at the date of this report. The successful transfer of the SBTI'S activities, assets and employees from its founding partners to the new SBTI entities was largely completed in De￿rnber 2024. Recruitment and training of Trustees Each of the company members of the SBTI may appoint one Representative Trustee to the Board, subject to the approval of the existing Board members. Independent Trustees are recruited globally from persons with the requisite skills and experience to successfully deliver the SBTI'S objectives and may be recruited from finance, industry, public bodies or the non-profit sector. SBTI'S Nominations Committee identifies individuals for appointment as Trustees and makes recommendations to the Board of Trustees for their consideration. The Board of Trustees takes the formal decision to appoint. Formal induction and training is provided to Trustees to enable them to comply with their legal and regulatory duties. The Board is supported by the SBTI'S Legal, complian￿ and Executive Leadership Teams, including by way of specialist external counsel. Changes to officers since incorporation DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). After the incorporation of the SBTI, Ms Ester Baiget and Mr Ivan Duque Marquez were appointed as Trustees on 24 August 2023, Mr Francesco Starace was appointed as chair on 18 September 2023, and Ms Sta￿Y Mitchell was appointed on 14 December 2023. Ms Sherry Anne Madera was appointed on 28 March 2024 and stepped down as a Trustee on 10 September 2024. Ms Nicolette Bartlett, a Trustee since incorporation, resigned as a Trustee on 28 March 2024. The SBTI is grateful for their contributions. Ms Sue Jenny Ehr was appointed as Company Secretary on 28 September 2023 and is currently serving as Interim CEO. Executive Leadership Team ("ELT") The ELT is currently led by the Interim CEO after Lulz Amaral stepped down in July 2024, having held the role of CEO since before the SBTI'S incorporation. The Trustees delegate the day-to4ay management of the SBTI to the CEO and other members of the ELT in accordance with a Scheme of Delegation. The ELT comprises senior employees from across the SBTI'S departments. They report to the CEO, who in turn reports to the Trustees. The CEO delegates certain financial duties to the COO, and certain general duties to all ELT members. Responsibility for setting SBTI staff salaries is delegated to the CEO and the CEO'S salary is determined by the Board, mainly using market data and benchmarking against comparable organisations. Finance, Risk Audit and Governance {"FRAG"I Committee The Board of Trustees has delegated authority to the FRAG Committee to advise the Trustees on complian￿ with their legal duties, the Charity Governance Code and other applicable governance requirements, including managing conflicts of interest. The FRAG Committee is also responsible for monitoring and reviewing the effectiveness of the SBTI'S risk management systems, particularly regarding financial risk, including financial systems, controls and policies. Technical Council The SBTI Technical Council is an independent deliberation and technical decision-making body, appointed and overseen by the SBTI'S Board of Trustees. The Council has delegated authority to review and approve SBTI standards and other normative documentation. The members sit for a renewable term of two years, including a Chair who acts as liaison between the Council and the Board. This group operates exclusively in the public interest. The scope of the Technical Council covers all normative documentation, including SBTI principles, standards, mitigation pathways and methods that inform emission and non-emission benchmarks used across SBTI standards, and other normative documents that supplement SBTI standards DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). (including annexes, guidelines, position papers, technical policies, etc.). The Technical Council reviews and approves, and recommends that the Board adopts, normative elements of the SBTI framework. Nominations Committee The primary purpose of the Nominations Committee is to identify individuals for appointment as Trustees and make recommendations for consideration by the Board, which will take the formal decision to appoint. The Nominations Committee will also identify individuals for appointment to roles on the Technical Council {in accordance with the Technical Council's Terms of Reference) and may be involved in appointments to other Board committees of SBTI at the discretion of the Board. Additionally, the Nominations Committee is also responsible for the selection of the CEO. In each case the formal decision to appoint will be taken by the Board. Group structure The SBTI has a wholly owned UK trading subsidiary, SBTI Services Limited, structured as a company limited by shares (Company number 15181058, date of incorporation 2 October 2023, trading start date 1 July 2024), whose primary purpose is the validation of corporate, SME, and financial institution emissions reductions targets in line with SBTI Standards and guidance. The funds generated help to support SBTI'S charitable purposes and activities. The SBTI also has a wholly owned subsidiary in Germany {SBTi gGbmH, incorporated on 27 June 2024), trading start date 1 October 2024) which employs German-based staff of the SBTI and SBTI Services Limited. In certain Jurisdi￿lon$, where it is not financially or administratively prudent for the SBTI to incorporate entities to employ staff directly, the SBTI uses an Employer of Record to employ staff. Key risks and uncertainties The Board of Trustees has overall responsibility for the system of internal budget and risk control for the SBTI. This includes ensuring that there are reasonable procedures in pla￿ for the identification and management of major operational risks, including fraud and other irregularities. The FRAG Committee is the governance body with delegated responsibility from the Board for the oversight of the organisations, SBTI'S Risk and Issues Register. The below are the priority risks that SBTI actively looks to mitigate and manage. The Executive Leadership Team reviews and updates the Risk and Issues Register on a regular basis to ensure accurate prioritization and mitigation progress. DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Risk title Risk description Actions in process 1. Strategy and planning Challenges in maintaining market presence Enhan￿ relationships and collaboration with key organisations and other standard-setters and work towards interoperability for ease of adoption. Enact a comprehensive engagement programme with specific industry sectors to identify and mitigate barriers to entry. Regularly audit and update SBTI Stsndards to address critical gaps, issues and needs. Implement a task force that assesses, prioritises, and resolves issues that cause companies difficulty adopting SBTI standards. Foundational science is updated; for example, 1.5C carbon budget being recalibrated The SBTI'S Research Team remains close to IPCC to proactively prepare. 2. Reputation Risk of companies with science- based targets not decarbonising in line with validated targets Include Renewals and Progress against Targets in the Corporate Net Zero Standard and interim documentation. Deviation from scientific evidence affecting SBTI'S credibility Technical Team and Technical Council ensure SBTI maintains the highest level of scientific rigour in all standards, tools and guidan￿. Negative stakeholder sentiment resulting from perceived lack of response from the SBTI to external events Ongoing proactive approach to communications, including building relationships with key stakeholders, extensive consultation processes, io DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). and support of external consultancies. 3. Data and technology Delays in major IT projects Working with a reputable supplier on project delivery. Fortnightly Steering Committee meetings with representation from all relevant stakeholder groups to consider and address project risks and issues,. updating plans based on learnings. Exposure to cyber risks External expert review followed by implementation of ISO 27001. Data security and accuracy Implementation of digital working methods during 2025 with the minimisation of manual inteNention. 4. Funding Funding dependencies on philanthropic donors and Gift Aid from SBTI Services Expand and diversify sources of funding. Curate and enhance relationships with existing donors. Head of Fundraising joins SBTI in Q1 to build and maintain the pipeline. Maintain and enhance existing donor relationships. 5. Governance Ensuring that the UK Charity Commission requirements are fully embedded in all structures and processes The Trustees have received external training on their fiduciary duties and Charity Commission requirements. The Trustees have received training on, and shall follow, the SBTI'S Standard Operating Procedure for the Development of Standards. Continue to deploy, enhan￿, and update policies, processes and procedures, with appropriate training li DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). being rolled out across the organisation. 6. Internal management Culture alignment and development Appointment of pemanent CEO and utilisation of People Engagement Advisory Committee to allow for broad employee inputs. Staff retention Sector-competitive compensation and benefits with career development. Financial Review The SBTI closed the reporting period in a solid financial position, however it is important to stress that there were several unusual and non-recurring items in this outcome. Firstly, an extended accounting period from June 2023 to Dec 2024 was used, as permitted. Secondly, the costs of the initiative were largely incurred by the founding partners before the SBTI'S incorporation and were transitioned to the SBTI over time. Thirdly, the commercial revenue generating activity within SBTI Services Ltd only commenced in the last six months of the reporting period. Finally, SBTI received a non-recurring grant from a partner organisation in connection with activities previously incubated within the partner organisation. Value for this transaction for the year is $10.2M USD, and it includes a contingent asset of $3M USD that is payable each quarter until 1 October 2028. On an ongoing basis, the SBTI has three different sources of income (please note the table below in page 13 includes the detail of this).. Core philanthropic funding in the form of grant funding to cover core costs, broader organisational development and capacity-building. Project-SP8cific funding in the form of grant funding for specific time-limited projects. Validation service fees (via its trading subsidiary, SBTI Services) to recover the cost of operating and continuing to enhan￿ our target validation service and companies, experien￿. Fundraising The SBTI has achieved its fundraising goal for the accounting period with a combination of project- specific and core funding grants from key funders. Funders support the SBTI'S mission to ensure 12 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). companies have the tools to take science-based climate action. Fundraising is performed by the SBTI'S employees, in line with relevant policies and procedures. The SBTI does not fundraise with vulnerable people or the general public and has not received any complaints regarding its fundraising activities. Our funders since incorporation IKEA Foundation.. Core Laudes Foundation.. Project-specific Climate Arc- Rockefeller Philanthropy Advisors.. Project-specific In addition, in 2024 the SBTI received a non-recurring grant from a partner organisation in connection with activities previously incubated within the partner organisation, categorised as core funding. The SBTI is most grateful for the support of its funders during this period of transition and growth. Income re￿iVed from companies and institutions, whether as funding or validation fees, has no Influen￿ on decisions surrounding their targets. Where our money comes from In the accounting period ended 31 December 2024 our group income can be categorised as follows= Amounts in OOOIUSD Validation service fees 7,010 20,754 754 24.6 % Core funding Project-specific funding Total 2.6% 28,518 Reserves The SBTI group has a reserves policy of three months, cost for the charitable activities, a policy which is reviewed annually and approved by the Board. At 31 December 2024 the group held unrestricted reserves of $15M USD and is in compliance with its policy. To help with calculating the required reserves, the SBTI evaluates how to protect the continuity of our work, how to engage unexpected opportunities, as well as covering unforeseen expenditure or unanticipated liabilities. 13 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). With unrestricted funds totalling $15M USD, and fixed assets of less than $1 M USD, SBTI has free reseNes of $14M USD. Further financial disclosures The SBTI has made no investments and has no liability arising from obligations to a defined benefit pension scheme or pension assets, and no funds in deficit. The SBTI makes small grants to not- for-profits in furtherance of its charitable objectives. The SBTI makes no use of volunteers and undertakes no social investment. No assets were held as custodian trustee during the reporting period. Total grant expenditure in the year was $458k USD, to fund SBTI dedicated resources. The restricted funds take into account some project specific developments that are part of ISBTils technical workplan. Subgrants were made to support the SBTI'S charitable activities,. these covered staff costs that were held in the partners and project specific subgrants that supported the workplan from our Technical Team. GRANTS PAYABLE Grants to Grants to Support Totsl Institutlons Indlvldual$ WWF-UK 22,500 00,510 44,933 208,438 31.839 22,500 00,510 44,933 268,438 31.839 Wc Mcan Busincss Coalition SFC Smart Freighl Centre World ResouiGes Institute Climatè Action Aggociates 458,230 458,230 At 31 December 2024 the Group held funds restricted for specific purposes and this totalled $347k USD. Goin concern Based on the cash position at the end of 2024, and detailed operational and cashflow projections, including reasonable forecasts of income and enhan￿d cost controls, the Trustees consider that the SBTI has adequate resources to continue as a going concern for at least 12 months following approval of these financial statements. 14 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Plans for future periods In the upcoming year, the SBTI expects to welcome its new permanent CEO to advance its mission and impact. The SBTI plans to continue development of two significant standards, Financial Institutions Net Zero Standard (FINZ} and the Corporate Net Zero Standard Version 2 (CNZS). Both standards will be developed according to the Standard Operating procedure. The FINZ standard is intended to be published in 2025. Corporate Net Zero Standard Version 2 We are updating the Corporate Net-zero Standard to support more companies to set targets and make corporate climate action more effective, to ac￿lerate the pace of decarbonization. The draft standard sets out a science-based, innovative and pragmatic framework to support corporate action post 2030 that is consistent with commercial approaches. It aims to be both more rigorous and practical- in line with feedback from businesses about what they need. Key changes: The draft splits out scope 1 and scope 2 More than half of businesses we've surveyed have told us that scope 3 is a major barrier to setting a net-zero target. The draft standard introduces both flexibility and actionability to setting targets and reporting progress to help tackle this. The draft standard recognizes the increasing number of companies engaging in transition planning, and provides an explicit link between commitments and plans. Investment in permanent carbon removals and related carbon credits can complement corporates, efforts to redu￿ their own carbon footprint - but should never be a substitute for this. In addition.. It's critical that more SMES and businesses in developing nations set targets. Many have told us they would value a simpler process tailored to the capabilities and resources that they have. The draft outlines a reduced set of requirements to help businesses like these take action. The draft will also require regular tracking of progress to keep companies on course and improve targets where necessary. The feedback we gather from consultations, our expert working groups and pilot testing will all inform changes ahead of its final approval. We encourage everyone to participate. 15 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). The SBTI will also take steps to ensure a smooth transition from the current to new standard: Auditors Under section 487 (2) of the Companies Act 2006, Crowe LLP will be deemed to have been reappointed 28 days after these Financial Statements were sent to Members or 28 days after the latest date prescribed for filing the accounts with the Registrars whichever is the earliest Trustees, responsibilities The Trustees, who are also the Directors of the SBTI for the purposes of Company Law, are responsible for preparing the Trustees Annual Report and the Financial Statements in accordance with applicable laws and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare Financial Statements for each financial year. Under Company Law the Trustees must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure of the charitable company for that period. In preparing these financial statements, the Trustees are required to select suitable accounting policies and then apply them consistently observe the methods and principles in the charities SORP make judgments and estimates that are reasonable and prudent state whether applicable UK accounting standards have been followed prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Charity will continue in business The Trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company, and to enable them to ensure that the accounts comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Public benefit disclosure The Trustees have complied with their duty under Section 17 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission. 16 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). Statement of compliance with section 172{1) of the Companies Act 2006 The SBTI'S Board of Trustees must act in the way they consider, in good faith, would be most likely to promote the SBTI'S SUC￿$$ to achieve its charitable objectives. In carrying out their duties, the Trustees have regard to (without limitation) the following matters= a) The likely consequences of any decision in the long term The Trustees consider the financial and operational sustainability of the organisation in all their decision-making. The Trustees are mindful of the long-term results of the organisation's work and align their decisions to the long-term strategic aims of the SBTI. b) The interests of the SBTI'S employees The Trustees recognise that attracting, developing and maintaining a highly-skilled workforce is critical to the success of the SBTI'S strategic aims. The Trustees, therefore, through regular consultation and collaboration with senior staff, strive to promote a positive working culture, and to encourage professional development of SBTI staff. The Trustees are committed to ensuring a fair and safe working environment, as well as diversity, inclusion and equity in the workplace. c) The need to foster the SBTI'S business relationships with suppliers, partners, and others The Trustees acknowledge that a key factor to delivering the SBTI'S charitable purposes and strategic aims is to build strong and lasting relationships with suppliers, partners and other stakeholders. The Trustees foster excellent working relationships be￿een the SBTI and the industry and are supported by senior management in applying risk management strategy and Complian￿ with regulatory requirements of conduct in their business partnerships and interactions. d) The impact of the SBTi's operations on the community and the environment The Trustees ensure that the SBTI is strongly committed to the safeguarding of communities and the environment. This is at the heart of the SBTI'S charitable objectives. Trustees consider the effects ofthe SBTI'S operations and procedures on communities and individuals it works with and the environmental impact. Staff help to ensure that internal safeguarding policy is upheld across the organisation. The Charity is planning its own report on its environmental impact with the aim of setting targets via its own process for smaller medium-sized enterprises, while undertaking a comprehensive assessment of its own carbon footprint for the longer-term purpose of establishing reduction targets and revising its environmental policies and processes. Further progress will be included in next year's report. e) The desirability of the SBTI maintaining a reputation for high standards The SBTI'S core values are reflected throughout its policies, procedures, and risk management 17 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE, (LIMITED BY GUARANTEE), CONSOLIDATED FINANCIAL STATEMENTS, FOR THE PERIOD ENDED 31 DECEMBER 2024). strategy. The Trustees ensure that the SBTI maintains a strong reputation for its high standards in all aspects of its operations, from internal employee resources to external publications. The SBTI'S position in the industry is reliant on the quality of its work, transparency, integrity and accountability. The SBTI maintains compliance with regulatory standards and has complaints procedures covering all aspects of the organisation. The Trustees, regard for the above matters is factored into all of their decision-making, policies, prO￿dureS and through the SBTI'S mission, values, culture, and governance, as well as its stakeholder engagement practices. Statement of disclosure to auditors In so far as the Trustees are aware there is no relevant information of which the charitable company's auditors are unaware The Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information The Trustees, Report (incorporating the Strategic Report} was approved by the Board of Trustees (which is also the Board of Directors) on the 215t of March 2025 and signed on their behalf by 1É44800È7C6U47J FEgD2BA95645¢ Francesco Starace Chair, SBTI Board of Trustees Stacey Mitchell Trustee 18 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SCIENCE BASED TARGETS INITIATIVE Opinion We have audited the financial statements of Science Based Targets Initiative (the 'charitable companl'l and ils subsidiaries (the 'group I for the period ended 31 DeTrmber 2024 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Charity Balance Sheet, the Consolidated Statement of Cash Flows and notes to the financial statements, Including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Praclicel. In our opinion the financial slalements.. give a true and fair view of the slate of the group's and the charitable company's affairs as at 31 December 2024 and of the group's incoming resources and application of resources, including its income and expenditure for the year then ended., have been properly prepared in accordance wth 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 Stsndards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial ststemenls section of our report. We are independent of the group 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 lo provide a basis for our opinion. Conclusions relating to going concern In auditing the financial statements, we have concluded that the trustee's 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 lo continue as a going con￿rn for a period of at least ￿e1ve months from when the financial statements are aulhorised for issue. Our responsibilities and the responsibilities of the Iruslees with respect to going concern are described in the relevant sections of this report. other information The trustees are responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial slalements and our auditor's report Ihereon. Our opinion on the financial statements does not cover the other information and, except lo the exlenl otherwise explicitly slated in our report, we do not express any form of assumnce conclusion thereon. Our osponsibility is to read the other information and, in doing so, consider whether the other information is Material￿ inconsislenl with the financial statements or our knowledge obtained in the audit or olhenmise appears lo be materially misstated. If we identify such material inconsistencies or apparent material misslatemenls, we are required lo 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 lo report that fact. We have nothing lo report in this regard. 19 **Docusign Envelope ID: 5CD6764B-62AE-486E-A8CC-3D59BEBDD620** ## **INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SCIENCE BASED TARGETS INITIATIVE** ## **Opinion 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 includes the directors' report and the strategic report prepared 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 strategic report and the directors' report included within the trustees' report have been prepared in accordance with applicable legal requirements. ## **Matters on which we are required to report by exception** In light of the knowledge and understanding of the charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report included within 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: - the parent company has not kept adequate accounting records; or - the parent company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of trustees' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. ## **Responsibilities of trustees** As explained more fully in the trustees' responsibilities statement set out on page 16, 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. ## **Our responsibilities for the audit of the financial statements** Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We obtained an understanding of the legal and regulatory frameworks within which the charity and group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and the Charities Act 2011 together with the Charities SORP (FRS102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. **20** DoGusign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SCIENCE BASED TARGETS INITIATIVE In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements bul compliance with which might be fundamental to the charity s and the group's ability lo operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity and the group for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulations. We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be wthin the liming of recognition of grant income and the override of controls by management. Our audit procedures lo respond to these risks included enquiries of management, and the Finance, Risk, Audit and Governance Committee about their own identification and assessment of the risks of irregularities, sample testing on grant income, sample testing on the posting of journals, reviewing accounting eslimales for biases. reviewng regulatory correspondence with the Charity Commission and Companies House, and reading minutes of meetings of those charged with governance. In accordance with International Auditing Standards, we planned our audit so that we have a reasonable expectation of delecling material misslalements in the financial statements or accounting records including any material misststemenls resulting from fraud, error or non-compliance with law or regulations. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misslatemenl in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely lo become aware of instances of non-compliance. The risk Is also greater regarding irregularities occurring due lo fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is available on the Financial Reporting Council's website at". www.frc.org.uklauditorsresponsibilities. This description forms part of our auditor's report. Use of OUT report This report is made solely lo the charitable company's members, as a body, in accordan￿ with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might stste to the charitsble company's members those mallers we are required lo slate to them in an auditor's report and for no other purpose. To the fullest exlenl permitted by law, we do not accept or assume responsibility lo anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed. Tara Westcott Senior Slatulory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor 4th Floor St James House St James Square Cheltenham GL50 3PR Dale". 26 March 2025 21 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE {LIMITED BY GUARANTEE) CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING INCOME AND EXPENDITURE ACCOUNT FOR THE PERIOD ENDED 31 DECEMBER 2024 Unrestricted Restricted Totsl Funds Funds Funds Not& 2024 2024 2024 INCOME AND ENDOWMENTS FROM: Charitable activities 20,754,475 7,010,831 67,402 754,185 21,508,660 7,010,831 67,402 Othar trading activitias Investment incorne TOTAL INCOME 27,832.708 754.185 28,586,893 EXPENDITURE ON= Raising funds Charitable activities 2,615,091 9,775,201 2,615,091 10,182,484 407,283 TOTAL EXPENDITURE 12,390,292 407,283 12,797,575 NET INCOME 15,442,416 346,902 15,789,318 NET MOVEMENTS IN FUNDS 15,442,416 346,902 15,789,318 TOTAL FUNDS BROUGHT FORWARD 17 TOTAL FUNDS CARRIED FORWARD 17 15,442,416 346,902 15,789,318 CONTINUING OPERATIONS All of the above ie5uhs are derived from continuing operations. 22 **Docusign Envelope ID: 5CD6764B-62AE-486E-A8CC-3D59BEBDD620** ## **SCIENCE BASED TARGETS INITIATIVE (Registered Number: 14960097) (LIMITED BY GUARANTEE) CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024** |||**Group**|**Charity**| |---|---|---|---| ||**Note**|**2024**|**2024**| |||**$**|**$**| |**FIXED ASSETS**|||| |Intangible assets|**13**|789,272|| |**Investments**|||| |Shares in subsidiaries|**14**||13,616| |||789,272|13,616| |**CURRENT ASSETS**|||| |Debtors|**15**|6,246,661|5,833,314| |Cash at bank and in hand||10,164,035|6,796,636| |||16,410,696|12,629,950| |**CREDITORS - amounts falling due**|||| |**within one year**|**16**|(1,410,650)|(822,648)| |**NET CURRENT ASSETS**||15,000,046|11,807,302| |**TOTAL NET ASSETS**||**15,789,318**|**11,820,918**| |**FUNDS**|||| |Unrestricted funds|**18**|15,442,416|11,474,016| |Restricted funds|**19**|346,902|346,902| |**TOTAL FUNDS**||**15,789,318**|**11,820,918**| |**Charity's Surplus for the Period**|||**11,820,918**| The financial statements were approved by the Board of Trustees on 21 March 2025 and were signed on its behalf by: Francesco Starace .................... - Trustee **DocuSigned by:** I/ �79 Stacey Mitchell ....................... - Trustee **23** DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE PERIOD ENDED 31 DECEMBER 2024 2024 Cash Flows from operating activities Net cash provided by operating activities 10,932,333 Cash flows from investing activities: Purchase of intangible fixed assets Interest re￿iVed {835,7001 67,402 Net cash used in investing activities 1768,2981 Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period 10,164,035 Cash and cash equivalents at the end of the reporting period 10.164,035 RECONCILIATION OF NET INCOME I IEXPENDITUREI TO NET CASH FLOW FROM OPERATING ACTIVITIES 2024 Net income for the reporting period las per the statement of financial activities) Adjustments for: Amortisalion charges Interest received 15,789,318 46,428 167,4021 16,246,661) 1.410,650 Increase in debtors Increase in creditors Net cash provided by operating activities 10,932,333 ANALYSIS OF CHANGES IN NET FUNDS At 2610612023 Cash flow At 3111212024 Net cash Cash at bank 10, 164,035 10,164,035 10, 164,035 10,164,035 10,164,035 10,164,035 Total DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 General information The charitable company is a private company, limited by guarantee (the liability of each member is limited to £11, incorporated and domiciled in the England and Wales. The address of its registered office is First Floor, 10 Queen Street Place, London, EC4R 1BE. The registered number of the company is 14960097. The registered number of the charity is 1205768. The charity was incorporated on 26 June 2023, and commenced activity on 1 December 2023. This is the first sel of financial slalements the Group and Charity have produced. The charity's accounting reference date is the 26 December 2024, however the financial statements have been prepared lo the 31 December 2024 under s390 Companies Act 2006. The financial information presented is for the period ended 31 December 2024. The functional and presentational currency is US dollars1$1. Accountlng Pollcles 2.1 Basis of preparation The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP IFRS 1021 'Accounting and Reporting by Charities.. Statement of Recommended Pfftcts.￿ lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191, Financial Reporting Standard 102 ' The Financial Reporting Standard applicable in the UK and Republic of Ireland, and the Companies Act 2006. The financial statements have been prepared under the historic cost convention. Science Based Target Initiatives meets the definition of a public benefit entity under FRS 102. A separate Statement of Financial Activities, and income and expenditure account, for the parent charitable company is not presented as part of these financial statements as permitted by section 408 of the Companies Act 2006. The net result of the Parent Charity is disclosed on page 23. 2.2 Preparation of the financial statements on a going concern basis The financial ststemenls have been prepared on the assumption that the group is able lo continue as going concern, which the Iruslees consider appropriate having regard to the current level of unrestricted reserves and the expected level of income and expenditure for 12 months from aulhorising these financial statements. There are no material uncertainties about the group's ability to continue as a going concern. 2.3 Preparation of consolidated financial statements The consolidated financial statements incorporate the financial ststemenls of the Charity and its wholly owned subsidiaries, SBTI Setvices Limited and Science Based Targets Initiatives ISBTil gGmbH, on a line by line basis. The accounts are adjusted, where appropriate, to conform to group accounting policies,. intra-group transactions and balances are eliminated fully on consolidation. 2.4 Income All income is recognised in the Statement of Financial Activities once the charity has entiuement to the income, there is sufficient certainly of receipt and so it is probable that the income will be received and the amount can be measured reliably. Income in respect of services provided is recognised when, and to the exlenl that, performance occurs and is measured al the fair value of the consideration receivable. Income from grants is recognised when the group has entitlement lo the funds, any Performan￿ conditions allached to the grants have been met, it is probable that the income will be received and the amount can be measured reliably. Investment income is included in the Statement of Financial Activities in the period in which it is receivable. Interest receivable is included when receivable and the amount can be measured reliably, normally upon notification of interest paid by the bank. 25 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 Income from other trading activities includes services provided by the subsidiary companies, net of VAT. 2.5 Expenditure Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a t￿nsfer of economic benefit will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to that category. Governan￿ costs are included in support costs and include the costs of the annual statutory audit. Support costs which cannot be directly attributed to particular headings have been allocated to activities on a basis consistent with the use of resources. 2.6 Intangible fixed assets Intsngible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. Computer So￿are is being amortised over its eslimaled useful life of 3 years. 2.7 Financial instruments All loans, investments and short term deposits held by the group are classified as basic financial instruments. These financial instruments are initially recorded at the transaction price and are subsequently measured at their settlement value. Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the dale of acquisition or opening of the deposit or similar account. Debtors are recognised al the settlement amount due. Creditors are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due lo setue the obligation can be measured or estimated reliably. Creditors are normally recognised al their settlement amount. 2.8 Pension costs The group operates a defined contribution pension scheme. Pension costs charged to the Statement of Financial A¢livilies represent the contributions payable by the group during the period. These contributions are invested separately from the group's assets. 2.9 Fund accounting General funds are unreslricled fvnds which are available for use at the discretion of the trustees in furtherance of the general objectives of the group and which have not been designated for other purposes. Reslricled funds are funds which are to be used in accordance with specific restrictions imposed by donors which have been raised by the group for particular purposes. The cost of raising and administering such funds are charges against the specific fund. The aim and use of each restricted fund is sel out in the notes to the financial slatemenls. 2.10 Lease commitments Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Rentals paid under operating leases are charged lo the slalement of financial activities on a slraighl line basis over the period of the lease. DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 2.11 Critical accounting estimates and judgements In the application of the group's accounting policies, the Iruslees are required lo make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. Main areas of eslimales and judgement are considered to be timing and recognition of grant income. 2.12 Foreign Monetary assets and liabilities denominated in foreign currencies are translated into US dollar1$1 al rates of exchange ruling al the balance sheet date. Transactions in foreign currencies are translated into sterling at the mte ruling on the date of the Iransa¢lion. Exchange gains and losses are recognised in the Statement of Financial Activities. 2.13 Taxation Status As a registered eharity, the charity is exempl from Corporation Tax in respect of its investment and charitable income and In respect of capital gains as any surplus income and gains are applied for charitable purposes. The charity's trading subsidiary company pays available taxable profits to the Charity as gift aid donations by a deed of covenant. Their charge to corporation lax in the period is £nil. INCOME FROM CHARrrABLE ACTIVITIES Unrestricted Funds 2024 Restricted Funds 2024 Total Funds 2024 Grants received 20,754,475 754, 185 21,508,660 Total income from charitsble activities 20,754,475 754, 185 21,508,660 INCOME FROM OTHER TRADING ACTIVITIES Unrestricted Funds Restricted Funds Total Funds 2024 2024 2024 Services - trading subsidiary 7,010,831 7,010,831 7,010,831 7,010,831 INVESTMENT INCOME Unrestricted Funds 2024 Restricted Funds 2024 Total Funds 2024 Bank Interest Other Interest Received 66,584 818 67,402 66,584 818 67,402 27 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 RAISING FUNDS Unrestricted Restricted Total Funds Funds Funds 2024 2024 2024 Trading activities- subsidiary 2,615,091 2,615,091 2,615,091 2,615,091 CHARITABLE ACTIVITIES COSTS Unrestricted Restricted Total Funds Funds Funds 2024 2024 2024 Other c05ts'. Staff welfare, training and equipment Professional, legal, consultancy and recruitment fees Contractors Insurance 1,919,044 2,241,163 161,536 28,187 3,537 263,121 192,945 335,649 167,404 8,905 149,084 186,043 13,1631 367,711 6,021,166 3,647,874 106,181 9,775,201 58,278 1,977,322 2,241,163 161,536 28,187 3,537 263,460 192,945 335,649 167,404 8,905 149,084 186,043 13,1631 458,230 6,170,302 3,906,021 106,161 10, 182,484 Advertising Travel expenses Subscriptions Computer running costs Meeting Costs Bank Charges Rent, office costs Technical Council Member 339 Foreign exchange gain Grants lo institutions 90,519 149,136 258,147 Totsl other costs Staff costs Support Costs 407,283 SUPPORT COSTS Unrestricted Funds 2024 Restricted Funds 2024 Total Funds 2024 Governance Costs 108,181 106,161 106,161 106,161 28 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 GOVERNANCE COSTS Unrestricted Restricted Total Funds Funds Funds 2024 2024 2024 Auditors remuneration - audit fee 30,708 75,453 30,708 75,453 Auditors remuneration - non audit work 106,161 106,161 GRANTS PAYABLE Grants to Grants to Support Costs Total institutions individuals WWF.UK 22,500 90,519 44,933 268,438 31,839 22,500 90,519 44,933 268,438 31,839 We Mean Business Coalition SFC Smart Freight Centre World Resources Institute Climate Action Associates 458,230 458,230 The value of grants committed at the balance sheet date, but not yet paid, is $Nil. 10. STAFF COSTS Consolidated Charity Wages and Salaries Social Security costs Pension costs 3,461,322 1,738,221 213,292 2,172,557 1,212,356 142,943 5,412,835 3,527,856 The staff costs of the Charity and the charitable subsidiary, included in Charitable Activities, lotalled $3,906,021 for the period. The staff costs of the trading subsidiary, Included within Raising Funds, lotalled $1,506,814 in the period. 29 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 The average number of headcounl employees was.. 2024 Science Based Targets Initiative SBTI Services Limited 23 13 Science Based Targets Initiative IS8Til gGmbH 38 Number of staff whose emoluments lexcluding pension contributions) exceeded $75,0001£60,0001 in the period.. 2024 $70,000- $87,499 $87,500- $99,999 $100,000- $112,499 $112,500- $124,999 $125,000- $137,499 $137,500- $149,999 $150,000- $162.499 $162,500- $174,999 $175,000- $187,499 $187,500- $199,999 $200,000- $212,499 $212,500- $224,999 > $225,000 33 The key management personnel of the charity comprise the Chief Executive Officer, Chief Technical Officer, Deputy lo the Chief Technical Officer, Chief Operating Officer, Direetor of Communications, Chief Impact Officer and Compliance Director. 2024 Total employee benefits lo key management 627,400 11. TRUSTEES EXPENSES AND REMUNERATION During the period the charity reimbursed, or paid on behalf of the trustees, travel expenses tolalling $2,208.79 for trustees to allend board meetings and other official events. These expenses were incurred solely in the course of their duties as Iruslees. 12. NET INCOMEIEXPENDITURE 2024 Operating lease costs Auditors, remuneration Auditors, remn - non-audit Auditors, remn - tsxation 147,384 30,708 75,453 253,545 30 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 13. INTANGIBLE FIXED ASSETS- GROUP Software Development Costs Held by the trading subsidiary.. Total Cost Additions 835,7DO 835,700 At 31 December 2024 835,700 835,700 Depreciation.. Ch8ige for the peiiod 46.428 46,428 At 31 December 2024 46,428 46,428 Net book value at 31 December 2024 789,272 789.272 14. FIXED ASSET INVESTMENTS 2024 CHARITY Historical cost Investment in subsidiaries: SBTI Services Limited Science Based Targets Initiative ISBTil gGmbH 13,615 Historical cost at 31 December 2024 13,616 Investment in subsidiaries.. nonwcharity trading subsidiaries SBTI Services Limited Class of share ." 1 £1 Ordinary- Holding." 100% Company number.. 15181058 Registered office.. First Floor, 10 Queen Street Place, London, United Kingdom, EC4R 1 BE 2024 Income statomgnt Turnover 7,010,831 Administrative expenses Amortisation 12,568.6641 146,4281 Profit for the Financial Period 4,395,739 Retained in the subsidiary 4,395,739 31 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 14. FIXED ASSET INVESTMENTS continued 2024 Balance sheet The assets and liabilities of the subsidiary were". Fixed assets Current assets Current liabilities 789,272 5,577,139 11,970,6711 Aggregate Capitsl and ￿SerVeS 4,395,740 Investment In subsldlarles.. charltable subsldlarles Science Based Targets Initiative ISBTil gGmbH Class of share '. 25,000 eo.50 Ordinary- Holding.. 100% Company number." HRB 267031 Registered office.. Kemperplatz 1, 10785, Berlin, Germany 2024 Income statement Turnover Administrative expenses 1427,3391 Loss for the Financial Period 1427.3391 Retsined in the subsidiary 1427,3391 Balance sheet The assets and liabilities of the subsidiary were.. Fixed assets Current assets Cutrenl liabilities 13,615 1427,3391 Aggregate capitsl and reserves 1413.7241 The charity has bNo wholly owned subsidiaries, SBTI Services Limited and Science Based Targets Initiative ISBTil gGmbH, which carry out the non 346,902 33 DoGUSign Envelope ID." 5CD6764B42AE.486E.A8CC-3D59BEBDD620 SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEEI NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024 ANALYSIS OF NET ASSETS BETWEEN FUNDS- CHARITY 2024 UnrgStri¢ted Funds 2024 Restricted Funds 2024 Totsl Funds Investments Current assets Current liabilities 13,616 12,283,048 1822,6481 13,616 12,629,950 1822.6481 346,902 18. UNRESTRICTED FUNDS UNRESTRICTED FUNDS- GROUP 2024 Incoming Outgoing Transfer- restricted funds 27,832,708 {12,390,2921 At 31 December 2024 UNRESTRICTED FUNDS - CHARITY 2024 Incoming Outgoing Transfer- restricted funds 20,821,877 19,347,861) At 31 December 2024 11.474,016 19. RESTRICTED FUNDS Balances 26 Jun8 2023 Balan¢88 310ec 2024 Incoming Outgoing Transfors Climate Arc Laudes Equity Laudes Building 315,884 88,051 350,250 194,8131 164,7021 1247,7681 221,071 23,349 102.482 754,185 {407,2831 346.902 Climate Arc - To validated insurance underwriting climate tsrgels. providing a broad framework for net- zero. Laudes Equity To identify ways in which corporations can inwrporale equity and fairness considerations in their journey lo Net Zero Ilhe Initialivel. Laudes Building - To develop science-based largels that address equity concerns for the full built environment value chain, including industry and investors Ilhe Initiative). 34 **Docusign Envelope ID: 5CD6764B-62AE-486E-A8CC-3D59BEBDD620** ## **SCIENCE BASED TARGETS INITIATIVE (LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2024** ## **20. RELATED PARTY TRANSACTIONS** During the year, the Charity carried out transactions with is trading subsidiaries: During the period, the Charity paid $1,984,382 amount on behalf of SBTi Services Limited (for staff & contractor costs and other consultancy), at the period end SBTi Services Limited owed $1,273,058 to the Charity. The Charity paid $427,339 on behalf of SBTi gGmbH (for staff and contractor costs), at the period end SBTi gGmbH owed $427,338 to the Charity. During the period the Charity entered into transactions with some of its founding members, as set out below: |
elow:|| |---|---| |**Grants Received from Related Pary Organisations**|**$**| |CDP Financial Settlement|10,254,475| |**Sub - Grants Paid to Related Pary Organisations**|$| |WWF UK /China|22,500| |We Mean Business Coalition, Inc.|90,519| |World Resources Institute|268,438| |**Costs recharged to the Charity**|| |WWF UK /China|66,962| |World Resources Institute|91,071| ## **21. LEASING COMMITMENTS** Minimum lease payments under non-cancellable operating leases fall due: ||**2024**| |---|---| ||**$**| |Within one year|44,531| |Between one and five years|| |More than five years|| ||44,531| ## **22. PENSION COMMITMENTS** The group contributes towards the employee' pension schemes. Pension contributions totalling $213,292 were paid in the period, with **$Nil** included in creditors at the period end. ## **23. TRANSFER AGREEMENT** Science Based Targets initiative (SBTi) de-merged from its partner organisations, previously a collaborative initiative between CDP, We Mean Business Coalition, World Resources Institute (WRI), World Wide Fund for Nature (WWF) and the UN Global Compact. SBTi is now an independent organisation alongside its partners and has received a transfer of funding from CDP as follows: $7.2m received in December 2024, and a further $3m to be received in quarterly tranches of $187.Sk until October 2028. Since the year end, one tranche has already been received in January 2025. A further $2.5m and $1 m retention amounts to be received after final discussions with CDP has been treat as a contingent asset. **35**