Climate Change Data

Environmental Metrics

ESG Focus Areas

• People
• Diversity and Inclusion
• Corporate Governance
• Community and Charities
• Environmental

Environmental Achievements

• Commenced search process to engage a provider to assist with Greenhouse Gas and Energy reporting.

Social Achievements

• Took extra measures to frequently engage with staff and encouraged them to participate in well-being surveys.
• Provided support for a landmark test case on behalf of an asylum seeker client to highlight excessive use of force in Australian immigration detention centres.
• LCM, through this initiative, is proud to be contributing to those disadvantaged and marginalised in the community.

Governance Achievements

• Adopted the Quoted Companies Alliance Code (‘QCA Code’)
• Appointment of Gerhard Seebacher to strengthen the composition of the Board.

Climate Goals & Targets

Environmental Challenges

• Challenges of remote working focused attention to the mental health and wellbeing of the workforce.
• Disruption to travel and routine operations.
• Delays to court and arbitral processes.
• Several lockdowns in the jurisdictions in which LCM operates.

Mitigation Strategies

• Extra measures to frequently engage with staff and encouraged them to participate in well-being surveys.
• LCM’s teams adapted to new ways of creating and doing business.
• Continued to develop its business development strategies through remote interaction.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: QCA Corporate Governance Code

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Supported Redfern Legal Centre and Aboriginal Legal Service in a matter concerning incorrectly issued COVID-19 fines.
• Supported UK charity KidsOut.
• Continued support for the Public Interest Advocacy Centre (PIAC) in Australia.

Governance Achievements

• Adopted the Quoted Companies Alliance Code (QCA Code).

Climate Goals & Targets

Environmental Challenges

• Delays in the resolution of balance sheet matters due to the global pandemic and increased complexity of larger disputes.
• Increased competition globally.
• Failure to raise third party capital.
• Failure to invest capital selectively and successfully.
• Loss of key personnel.
• Loss of key customer relationships.
• Disruption to systems.
• Cybercrime, fraud or security breaches.
• Regulatory risk.

Mitigation Strategies

• Diversification of investments through asset management business.
• Continuous innovation and differentiation through three primary investment strategies.
• Strong track record and experience.
• Robust and disciplined investment selection process.
• Succession planning, staff training, competitive remuneration, and monitoring of performance.
• Cultivating existing relationships and developing new alliances.
• Cloud-based system, business continuity and disaster recovery plan, investment in IT systems.
• Global cloud-based data vendor, compliance with GDPR, enhanced cyber insurance, AML/KYC checks.
• Monitoring regulatory landscape, proactive approach to government relations, seeking external advice when needed.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: QCA Corporate Governance Code

Certifications: Null

Third-party Assurance: BDO Audit Pty Ltd

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• People
• Community and charities
• Corporate governance
• Environmental

Environmental Achievements

• Achieved a favorable outcome in a class action brought on behalf of land owners who suffered diminution in the value of their land as the result of contamination with the chemical PFAS used in nearby defense bases.

Social Achievements

• Supported Walk for Justice, Redfern Legal Centre, Aboriginal Legal Service, and PIAC’s Adverse Costs Order (ACO) Guarantee Fund.
• Successfully concluded a case for Redfern Legal Centre resulting in the cancellation of 33,000 fines issued during COVID-19.

Governance Achievements

• Adopted the Quoted Companies Alliance Code (‘QCA Code’).

Climate Goals & Targets

Environmental Challenges

• Effects of competition could reduce margins if competition drives a reduction in pricing.
• Failure to raise third party capital could significantly impede growth opportunities.
• Failure to invest capital in a timely manner can have an adverse effect on the performance of our portfolio and the returns to our underlying investors.
• Loss of key personnel could have a negative impact on the success of our investments.
• Loss of key relationships could have an adverse effect on our ability to generate new business.
• Disruptions to our systems could impact our ability to operate.
• Cybercrime, fraud or security breaches could lead to a breach in our data protection obligations or cause loss of data or financial loss.
• Regulatory risk arises as a result of both the regulations specific to the jurisdictions in which we operate and the laws in those jurisdictions.
• Liquidity risk is the risk the Company has a lack of sufficient resources, readily realisable assets or access to capital at commercially viable terms to continue to make investments or meet its current obligations.
• FX risk is the risk that LCM will sustain losses due to adverse movements in currency exchange rates.
• Exposure to financial losses to LCM as a result of a client’s inability or unwillingness to pay LCM its contractual entitlement.
• In certain jurisdictions in which LCM operates, it provides an indemnity against an adverse costs result.
• Risk of errors arising from processes around the valuation of our portfolio of Litigation Assets which could compromise our financial reporting or expose the Group to unanticipated financial loss, or damage to our reputation.

Mitigation Strategies

• Continuous innovation allows us to operate across the entire spectrum and provide funding solutions to counterparties who use funding out of both choice and necessity.
• Alongside our credit facility, we have, through the resolution of matters in our mature portfolio, adequate balance sheet capital to grow our investment portfolio.
• Our robust investment process is fundamental to our success.
• Executives remain focused on achieving high levels of staff satisfaction and regularly consider succession planning.
• Our clients, shareholders and investors are at the heart of everything we do.
• LCM operates on a cloud based system providing flexibility and operational resilience.
• Management continues to monitor the changing regulatory landscape to ensure it remains in a position to operate without hindrance.
• Finance closely monitors liquidity and cash flow to ensure the Company continues to operate within the risk appetite set by the Board.
• Finance monitors the currency risk associated with respect to the timing for both the budget deployment for litigation projects and the expected return of those costs and our contractual return.
• As part of the initial stages of LCM’s investment process Investment managers ensure there is clear line to recovery for the claim and it must be demonstrated that the defendant has the capacity to meet a judgment of the size that will be brought.
• On most occasions, in those jurisdictions where that service is offered, the risk is laid off through after the event insurance (‘ATE’)
• We manage this risk through an established framework which has been developed, whereby key inputs into the valuation process go through various stages of review and are challenged and assessed as appropriate by the CEO, CFO, Head of Investments APAC and Head of Underwriting EMEA.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Social Justice
• Diversity and Inclusion
• Corporate Governance
• Community Investment

Social Achievements

• Provided a Deed of Guarantee to cover adverse costs incurred in a claim pursued by Redfern Legal Centre for individuals incorrectly fined during COVID-19.
• Provided further Deed of Guarantee to cover adverse costs for another Redfern Legal Centre client challenging a COVID-19 fine.
• Continued contribution to the ACO Fund of the Justice and Equity Centre (JEC), supporting public interest litigation.

Governance Achievements

• Adopted the Quoted Companies Alliance Code (QCA Code).

Climate Goals & Targets

Environmental Challenges

• Effects of competition in the litigation finance market.
• Failure to raise third-party capital.
• Failure to invest capital in a timely manner.
• Failure to originate investment opportunities and invest capital selectively and successfully.
• Loss of key personnel.
• Loss of key customer relationships.
• Disruption to systems.
• Cybercrime, fraud, or security breaches.
• Regulatory risk.
• Adverse court rulings.
• Liquidity risk.
• FX risk.
• Credit risk.
• Adverse costs.
• Valuation risk.
• Duration risk.

Mitigation Strategies

• Continuous innovation and diversification of offerings.
• Adequate balance sheet capital and exploration of innovative solutions to expand investor reach.
• Robust investment process and portfolio diversification.
• Rigorous investment selection process, peer review, and external expert advice.
• Succession planning, staff training, competitive remuneration, and robust recruitment process.
• Cultivating relationships with existing clients and developing new alliances.
• Cloud-based system, business continuity plan, and investment in IT systems.
• Compliance with GDPR, external server hosting, and continuous upgrade of cybersecurity defenses.
• Monitoring the changing regulatory landscape and obtaining external advice.
• Continuous monitoring of court judgments.
• Maintaining adequate cash reserves and monitoring cash flows.
• Monitoring currency risk and assessing hedging requirements.
• Rigorous assessment of defendants' financial capacity, security for settlements, and use of solicitors' trust accounts.
• After-the-event insurance and contractual disclaimers of liability.
• Established framework for valuation, review process, and regular monitoring.
• Continuous monitoring of investments and contractual right to cease funding.

Supply Chain Management

Climate-Related Risks & Opportunities