Financial summary 2025

IIED’s statement of financial activities showed increases in the organisation’s income and expenditure in 2024/25.

Income increased to £32.6m (2024: £25.4m) and expenditure increased to £34.3m (2024: £26.3m). This was due to an overall increase in the scale of IIED’s activities, especially in sub-granting to partners.

The 2024/25 deficit of £1.8m, compared with the previous year’s deficit of £0.8m, was mainly driven by higher than budgeted pass-through expenditure, adverse currency exchange movements and revaluation losses, together with increased contractor costs to cover core functional gaps.

In an increasingly competitive funding environment, IIED is continuing to adapt to changes in government and non-government policies relating to environmental and climate-related causes. These shifts in funding priorities have required an agile approach to securing and delivering projects.

In 2024/25, IIED incurred additional costs as it addressed core functional and structural gaps across the organisation. Looking ahead streamlined processes designed to improve efficiency and reduce overheads are being adopted.

However, as IIED’s internal change initiatives and strategic priorities were progressed, the organisation maintained a higher reliance on interim and temporary contract staff to provide the necessary skills and flexibility during this period of transition.

IIED’s number of employees rose to 164 (2024:152) due to efforts to build capacity and capabilities across the organisation.

Support costs increased to £5.77m (2023: £4.8m) and there was a negative foreign exchange revaluation of £225,000 (2024: £113,00 0 gain) on year-end bank balances.

2024/25 saw IIED’s model for impact reviewed and updated. Staff across the organisation worked hard to transition to a portfolio approach, while continuing to deliver existing projects and progress the manifesto .

This shift requires fundamental changes to IIED’s organisational structure, moving away from static and sometimes siloed ways of working. But while the journey of change continues, it is evident that IIED’s research, co-creation and influencing efforts are already contributing to transformational change across its six strategic propositions.

IIED is funded through income from charitable activities in relation to commissioned research, both practical and academic.

Reserves policy

At the end of 2024/25, IIED reported negative free reserves of £0.7m, compared with positive free reserves of £1.1m at the close of 2023/24. This reflects expenditure exceeding income by £1.8m during the year, driven by the factors outlined above.

As part of the new strategy cycle, trustees have reviewed IIED’s reserves policy and agreed a revised target range of £4-5m in free reserves, reflecting both the organisation’s ambitions and the external operating environment. Achieving this is recognised as a key organisational challenge.

Since the year end, IIED has secured a significant step towards rebuilding reserves through a flexible grant from Quadrature Climate Foundation, with funds received in September 2025. £2.2m of this funding has been allocated to strengthen free reserves, providing an important foundation on which to progress towards the new target over the coming years.

Investment policy

IIED invested its surplus cash in fixed-term deposits during 2024/25. This policy produces an acceptable rate of return while giving us flexibility to access funds. IIED is reviewing this policy in 2025/26.

Related parties

Some IIED trustees are also trustees of other charities, or directors or senior officers in other organisations IIED works with as a normal part of its research activities. Where such work involves payment, they enter into ‘arm’s length contracts’ and any payments relating to these contracts are detailed in the notes to the accounts. The board operates a conflicts of interest policy.