Triodos is a European bank serving over 700,000 customers with offices in the Netherlands, Belgium, the United Kingdom, Spain and Germany. Triodos distilLs sustainable banking into three key missions; (1) to develop long term relationships with it’s customers, (2) to be a sustainable service provider and (3) to become a reference point and key voice within public debate on issues such as such as quality of life, corporate social responsibility and sustainable banking. The bank demonstrate commendable transparency regarding who they are investing in, how they are investing and the impact created through their investments. However Triodos do make an effort to conceal the exact criteria for their portfolio selection process. They claim to exclude all non-sustainable products, practices and services however their minimum standards document reveals their definition of sustainability is highly flexible. Triodos’ transparency is very impressive in terms of showing the consumer how their money is managed and the businesses they invest in. However, the lenience in the minimum standards for investors is concerning for their sustainable and ethical image.
Consumers should contextualise the branding of Triodos as a sustainable bank, with sustainable products and transparent reporting of stakeholder progress in the lenient minimum standards afforded to such stakeholders. For example the 5% revenue lenience for companies involved in gas and oil extraction, fur production and selling and violation of responsible international fishing policy. Consumers should be aware Triodos appear to deflect attention on their own sustainable practices through showcasing those of stakeholders they invest in.
Triodos have over €6.4 billion in assets under management. Their activities are split into two main operational cores: banking for individuals, charities and businesses, and investment management. These operational cores have the same values and aims. The banking business lends funds to companies Triodos deem sustainable – companies who consider the positive social, environmental or cultural impact of their activities. Triodos investment management manages socially responsible investment (SRI) funds and impact funds. The SRI funds allow clients to invest in listed companies with a commendable sustainability performance whilst the impact funds allow Triodos to invest directly in sustainable companies or projects.
Triodos over three impact funds, the most popular of which is the Triodos pioneer impact fund; a global fund for small and medium-sized companies who demonstrate commitment to creating a sustainable economy and society. Triodos have also won multiple awards these funds and their commitment to sustainable finance; Best Sustainable Investment Fund awarded by the sustainable and ESG investment awards in 2019, Best Investments Provider in the British bank awards in 2019 and the Listed Equities Manager of the Year in the Sustainable Investment Awards in 2021. The funds also requires a minimum investment of £1000, making investments open to a wider range of investors beyond just organisations or institutions. Their wide consumer-base highlights their definition of ‘impact investing’ includes the ability to engage a diversity of consumers in shaping the green transition.
Triodos also offers personal banking which is managed online with an eco-friendly contactless debit MasterCard. The bank provides options for savings accounts, fixed rate bonds and ISAs. These accounts offers a fair fee of £3 to protect consumers from hidden costs and high overdraft charges which come from ‘free’ bank accounts from other providers. The card itself is also made from renewable resources, mainly plant leaves and corn. It is both biodegradable and recyclable, making it one of the UK’s most eco-friendly bank cards. Personal banking customers can enjoy reading about how their savings are being used to finance sustianble initiatives through their online newsletter, just like institutional investors.
For their impact funds, Triodos clearly warns consumers about the risk of losing money on their investments as the result of the funds exclusive involvement with stock market listed companies. The company are therefore not afraid to take a higher risk approach to provide greater long-term performance potential for investors. Triodos also demonstrate the will to support growing companies which are committed to tacking sustainable challenges. Their commitment to innovative sustainable companies is evident in their archive. Triodos provides the details about the companies in the funds investment portfolio, updated to the current financial quarter.
However it is important to question Triodos’ social, environmental and economic consciousness. Triodos dedicate most of the information of their ‘about’ page to impressive statistics reflecting their involvement in developing sustainable goals within the community. Consumers should pay attention to how Triodos present themselves on their about page. Four large icons focus the consumer on the following achievements; the 34 million equivalent organic meals produced per year as a result of Triodos Bank Finance in 2021, the 700,000 households worldwide provided with green electricity from 586 energy projects in 2021, the 59,000 people provided with accommodation via social housing in 2021 and the 9.9M visitors able to enjoy cultural events in 2021. Whilst these figures are impressive and demonstrate high levels of community involvement from Triodos, it is unfortunate they cannot be followed up with reports or place-specific details. In fact, the details of their impact relating to these achievement are absent from the website.
Further, the consumers should pay attention to how these achievements are framed on their website. Triodos place emphasis on the numbers to demonstrate impact, unfortunately the exact locations or people who are impacted by those cultural events or social housing projects are omitted. Certain ‘case studies’ of companies they invest in are offered among their self-produced articles where the financial and quantitative impact of the business is explored. Similarly, the ’34 million equivalent organic meals produced per year as a result of Triodos Bank finance in 2021’ and the ’586 energy projects in 2021’ are not contextualised in place but reduced to statistics. These infographics are important for understanding what is important for Triodos bank. Triodos clearly value the impact of their financial operations quantitively and do not consider the individuals, places or communities who are involved in their banking as significant within their definition of sustainability. Consumers must be vary of the banks dedication to impact – whilst these figures are impressive, the human and lived impacts of sustainable banking should also be important for sustainable banking operations.
For example, one of their companies, ELITE Supported Employment Agency based in Llantrisant, Wales is reported to have supported over 500 individuals into training volunteering and employment since their beginning and has received numerous accolades including the Gold Level Investors in People Award, the Disability Confident Leader Status, and the Green Dragon Level 2 Award in Environmental Efficiency. Again, Triodos understands sustainable impact quantitatively, and does not look to elevate the voices of those involved or speak to specific environmental benefits of their operations.
Further, assessment of their sustainable lending policies reveals their statement ‘we wont lend to any organisation that puts profit before people and planet’, in other words non-sustainable products, services and working practices, is not completely true. For example, they are prepared to invest in companies which derive 10% of their revenue from retailing fossil fuels and those who developed coal plants prior to 2009. Triodos adopt a proxy voting approach toto ensure the decisions made around the management of a stakeholder company. They also claim their search for profit does not involve trade-offs with the planet or the population. Given the disconnect between their aims and their investment rules, these claims should be questioned.
However the strengths of their reporting must be recognised. It is beneficial Triodos offers the opportunity for consumers to hold the bank accountable through regularly publishing their online newsletter detailing progress with stakeholders. It would also be beneficial to see a breakdown of the sustainability of their operations i.e. energy use at their headquarters and various divisions across Europe as well as the energy used to maintain their online banking services.
Triodos was founded in 1980 and holds over 30 years experience in sustainable banking – new company. To maintain the mission of their bank, Triodos hold their shares in The Foundation for the Administration of Triodos Bank Shares (SAAT) manages all Triodos Bank NV's shares, which issues depository receipts to bank customers. Depository receipts are not listed on the stock exchange but traded within Triodos’ own platform. Depositary receipts are more convenient for global investors and less expensive than purchasing stocks directly in foreign markets. The board are said to meet with depository holders regularly as well as the supervisory board, who act critically and independently of the executives. However, the format of these meetings and, apart from the annual SAAT report meeting, its not clear exactly how often they occur are not clear on the website.
Within the members of the executive board, there is just one woman compared to the supervisory board where half (2/4) are women. Further, both of the boards are white. However the website makes clear how many depository receipts, if any the board own each for the purpose of transparency. Whilst Triodos are a ‘sustainable bank’, unfortunately none of the 9 total board members are shown to have any prior experience within sustainable finance. The company was made to provide sustainable financial products to individuals and organisations and to create a society which protects and promotes quality of life for people, support sustainable development and increase the health of the environment. However, these practices exclude the global south.
On their ‘about’ page, Triodos clearly state their mission as a sustainable bank is to ‘making money work for positive change’. Triodos promote themselves not as a bank, but as a community who along with their customers are creating a movement for change. This movement refers to their commitment to impact investing. The company states four key values which underpin their operation; sustainability, transparency, excellence and entrepreneurship. Whilst these core values speak to their drive for careful impact investing, the company does not provide examples or details. In fact, the consumer can only access a sentence about the relevance of these values to most of their products.
However, the company show a commitment to transparency through providing an interactive map showing where and what organisation has received loans from Triodos. The database provides information on how the company is invested in (e.g. the Triodos Pioneer Impact Fund), the asset class, the impact strategy, sector, Bloomberg ticker, industry groups and sustainable development goals. Whilst this list appears exhaustive, how the companies relates to the listed SDGs and how the company was selected is not explained. Instead, it appears each company has an independent investment rationale – a paragraph detailing why the company will create or is creating sustainable impact. For example, the company emphasises the importance of collaboration with portfolio companies in the screening process. This practice may be explained by the incongruency of their commitment to avoid companies who compromise their key values (human dignity, planetary awareness and good governance) with their minimum standards for investors.
Triodos use the values of the SDGs as filters within their general screening process across all of their portfolios. Therefore, Triodos aim to select companies which address social, environmental and economic sustainability. This system may be beneficial as the SDGs are well known and easy to understand, allowing the fund to be understood by non-specialist consumers. However, as their minimum standards show, the vague commitments which comprise the SDGs create a space of lenience for unsustainable investment practices.