Triodos Bank’s stakeholders are key to determining the focus and attention of the organisation’s efforts. The following section highlights who Triodos Bank’s stakeholders are. It describes the material issues that they and Triodos Bank have identified as most important, and hence provide the focus of its reporting. And it details Triodos Bank’s strategic objectives, their progress and the goals for the future.

Stakeholder dialogue: keeping us on our toes

Actively seeking a connection with the world around us is key to ensuring Triodos Bank remains relevant and can continue to build on its frontrunner ambitions. All our business and financial decisions have an impact on our stakeholders. In turn, the societal themes embraced by our stakeholders have an impact on what we do and how we do it. The starting point of our conversations with the broader stakeholder community is our essence, which defines who we are. How we bring that essence to life through our actions, is very much informed by the engagement with our key stakeholders and the developments in society at large.

We have benefited from open discussions with them for many years and in varied ways, from hosting evenings of debate with civil society, to organising client days connecting hundreds of customers in all the countries where we work, to depository receipt holder meetings and surveys. This work is undertaken, and managed, both centrally at a Group level and especially by co-workers in Triodos Investment Management and the offices in all the countries where we are active.

In addition to numerous interactions throughout the year at all levels of our organisation, we follow a formal process to create an analysis of the issues that are most important both to our stakeholders and ourselves and provide follow-up by integrating these issues into our management objectives. Consequently, we report on the progress of these objectives following the Global Reporting Initiative’s Standards guidelines.

Improving stakeholder dialogue and materiality analysis

In 2019 Triodos Bank further strengthened its stakeholder engagement and materiality analysis. A new structure will help us co-ordinate and improve stakeholder engagement in order to identify and monitor emerging topics of interest to them.

Firstly, we charted our stakeholder groups. Triodos Bank identifies three general categories: stakeholders that engage in economic relationships with the business, those without an economic relationship but with a close interest in Triodos Bank from a societal perspective and finally stakeholders who provide new insights and knowledge. We have identified specific stakeholder groups for each category, including the influence they exert on Triodos Bank and the expectations they have of us.

With help from local offices and public sources, we then identified a longlist of 57 potential material topics that were most prevalent during the year. From this we produced the final list of material topics, with the aim of asking stakeholders’ opinions through a survey. This analysis showed that the existing material topics in the materiality matrix (which were consulted with stakeholders in previous years) largely covered the topics on the longlist.

We also added more specific topics to our survey because these were very prominent in the sources we analysed. These topics relate to existing material topics:

Specific topic

Material topic

Financial crime (money laundering and fraud)

Resilient financial institution

The low interest environment

Resilient financial institution

The climate emergency

Integrating mission/strategy

PSD2/data/privacy

Protecting client data

Digital inclusion

Social inclusion

Dilemmas related to financing of initiatives

Sustainable investments

To streamline our stakeholder engagement regarding material topics, we have appointed topic owners. These are Triodos Bank co-workers, in senior positions, who have significant responsibility for the material topics and who have regular contact with stakeholders about them.

The stakeholder survey was distributed to representatives from all the specific stakeholder groups, in all the countries where we work. We also organised an annual stakeholder meeting during the year. Thirty representatives from all stakeholder groups attended. To conduct a more substantive conversation, we hosted separate discussions on the following topics: sustainable suppliers, social inclusion and climate neutrality. After these separate sessions a plenary session was held about a topic chosen by the stakeholders at the start of the meeting: the role of Triodos Bank in the public debate.

This year’s materiality analysis includes the results of the stakeholder survey, the feedback we received at the Annual General Meeting, participation in various global strategic bodies and the annual stakeholder meeting. The analysis is supplemented by input from the topic owners, learnings from several stakeholder events and interactions during the year including sector specific events in various countries and the external analysis we did in support of our strategy process throughout the year.

Materiality matrix 2019

Materiality Matrix (graphic)

Stakeholder table

Overall category

Stakeholder

Definition

Most relevant topics

Those that engage in economic transactions with Triodos Bank

Clients

  • Clients expect excellent banking and financial services
  • They expect Triodos Bank to put their interests first.
  • Clients are essential to achieve our mission.
  • Protecting client data
  • Client relationships
  • Engaging with communities
  • Social inclusion
  • Sustainable investments
  • Thought leadership
  • Products with a purpose
  • Integrating mission/strategy
  • New sustainable ventures

 

Depository receipt holders

  • Influence on and expectations of Triodos Bank’s ability to have the right balance between individual return on investment and social, environmental and cultural returns.
  • Social inclusion
  • Resilient financial institution
  • Thought leadership
  • Integrating mission/strategy
  • New sustainable ventures

 

Co-workers

  • Influence on and expectations of Triodos Bank’s ability to create a working environment that’s inspiring, healthy and welcoming.
  • Expect and contribute to a workplace where each co-worker finds room to address the important questions of our time and where each individual can work effectively in line with the mission and values.
  • Fair remuneration
  • Learning organisation
  • Responsible employer/diversity
  • Engaging with communities
  • Social inclusion
  • Sustainable investments
  • Thought leadership
  • Integrating mission/strategy
  • New sustainable ventures

 

Suppliers

  • They expect Triodos Bank to a responsible and reliable business partner.
  • They are partners in our mission for a more sustainable world.
  • Sustainable suppliers
  • Engaging with communities
  • Social inclusion
  • Responsible employer
  • Integrating mission/strategy

Those that have a close interest in Triodos Bank

NGOs

  • Influence on and expectations of Triodos Bank’s ability to execute its mission in a responsible and ethical way with a positive impact on society and the environment.
  • Fair remuneration
  • Social inclusion
  • Sustainable investments
  • Responsible employer

 

Governments and regulators

  • Influence on and expectations of Triodos Bank’s ability to execute its mission in a responsible and ethical way
  • Expect us to be compliant to laws and regulations.
  • Fair remuneration
  • Protecting client data
  • Resilient financial institution
  • Thought leadership
  • Integrating mission/strategy

 

Local communities

  • Local communities expect to benefit from our financial activities.
  • Engaging with communities
  • Thought leadership
  • Products with a purpose
  • Social inclusion
  • Integrating mission/strategy

 

Financial sector

  • The financial sector is key to achieve our mission to increase the positive impact of finance on society and the environment (our mission to change finance).
  • Social inclusion
  • Resilient financial institution
  • Thought leadership
  • Integrating mission/strategy

 

Media

  • The media influence public opinion about Triodos Bank and about the topics that are relevant for our mission
  • All topics can be relevant

Those that provide knowledge and insights

Advisors and influencers

  • They prompt us to reflect, rethink and explore new territory
  • Engaging with communities
  • Social inclusion
  • Thought leadership
  • Integrating mission/strategy

Complying with GRI Standards

We report on all of our stakeholder consultations using the Global Reporting Initiative (GRI) Standards. GRI requires reporting organisations to comply with their quality and content requirements to ensure a high-quality standard of sustainability reporting. Triodos Bank’s mission, vision and strategy are fully based on sustainability ambitions and a commitment to responsible banking. Therefore, many steps required to identify stakeholders and sustainability issues (material topics) for other organisations are standing practice for Triodos Bank. Stakeholder engagement and working together towards a fair and sustainable world are daily business for Triodos Bank. Consequently, not all theoretical steps towards integrated sustainable business and sustainability reporting are made explicitly, or rather: they are embedded in the process of sustainable banking. Examples of these steps are: stakeholder mapping, mapping of topics and assigning proper GRI denominations to variables such as ‘influence’, ‘importance’ or ‘impact’. In practice it appears that Triodos Bank and its stakeholders understand each other well and are aligned in jointly achieving the goals of financing change and changing finance.

In our surveys and other stakeholder consultations we continuously discuss the influence of material topics on their decisions and the impact of these topics on Triodos Bank. Following this ongoing dialogue with our stakeholders, ‘influence on’ / ‘importance of’ / ‘impact on’ are used interchangeably by both Triodos Bank and its stakeholders. GRI Standards use the formal denominations of ‘Influence on stakeholder assessments and decisions’ for the y-axis and ‘Significance of economic, environmental and social impacts for Triodos Bank’ for the x-axis. Our stakeholders are more familiar with and continue to use the expressions ‘importance of’ and ‘influence on’ (and are not always familiar with GRI). Therefore, Triodos Bank has chosen to continue using these denominations in its communications, including the annual report.

Material topics

All the topics identified in the materiality matrix relate directly, or indirectly, to Triodos Bank’s purpose as an integrated sustainable bank using money to deliver positive change. The boundary of the topics in blue are typically external. They are defined either by relevant issues within a client relationship or by our business strategy. The material topics in green are more internal. They describe how we operate as a responsible institution ourselves. Ordinarily we have a direct impact on these topics, in the selection of suppliers or our remuneration policies, for example.

The results suggest Triodos Bank’s stakeholders want and expect Triodos to continue to be a leader in sustainable finance, with a strategy that reflects and supports its mission. In addition, impact investments (in this sense combining both lending and investing in sustainable enterprises), and sector knowledge/thought leadership are very important both for Triodos Bank and for its stakeholders. They also identified the climate emergency as a very relevant topic.

Material topics are discussed in more depth below and/or are covered in relevant sections of the rest of the report.

Sustainable investments

Sustainable investments are at the heart of Triodos Bank’s work. They are what enables the organisation to finance change – via financing sustainable initiatives in key sectors – and their combined impact gives Triodos Bank the credibility to change finance – by using its influence to try to stimulate positive systemic change in the banking sector.

The boundaries of sustainable investments are determined by Triodos Bank’s mission, business principles and minimum standards. The impact of these investments is direct and on entrepreneurs, businesses and key sectors detailed in the annual report. The definition of sustainable investments is limited by Triodos Bank’s lending and investment criteria and based on balanced decisions made by experts in Triodos Bank’s lending and investment teams who determine whether to finance a prospective customer, or not.

The boundaries of sustainable investments are determined by Triodos Bank’s mission, business principles and minimum standards. The impact of these investments is direct and on entrepreneurs, businesses and key sectors detailed in the annual report. The definition of sustainable investments is limited by Triodos Bank’s lending and investment criteria and based on balanced decisions made by experts in Triodos Bank’s lending and investment teams who determine whether to finance a prospective customer, or not.

Procedures to assess and screen risks are undertaken by business managers supported by risk managers within Triodos Bank’s European network of offices. This process is described in more depth later in the annual report. Triodos Bank’s relationship managers interact with 100% of its borrowing customers on these issues. And all its assets are subject to positive and negative environmental and social screening.

New sustainable ventures

New sustainable ventures are pioneering new enterprises that tackle one, or more, of society’s key challenges. For Triodos Bank the transition to a regenerative economy is one of the most important and the boundary for this material topic. In 2019 Triodos Bank set up the Triodos Regenerative Money Centre, which aims to increase the conscious use of money, through donations and catalytic investments. The initiative’s goal is to support a regenerative economy that serves people and is a steward of the earth’s ecosystems.

Triodos Bank’s Regenerative Money Centre (TRMC) aims to deliver its goals by using Triodos Bank’s lending criteria and minimum standards. The goal of every donation and investment is to regenerate society at large, increase consciousness and provide new perspectives on current questions in areas where, for different reasons, traditional bank and investment products cannot provide an answer.

TRMC manages four existing entities which are not consolidated in Triodos Bank's financial statements (Triodos Foundation, Triodos Sustainable Finance Foundation, Triodos Renewable Energy for Development Fund and Triodos Ventures). By managing them from one centre this results in a larger funding base and creates synergies among the different teams of co-workers involved.  The centre is building a story line about the different qualities of money that underline Triodos Bank’s distinctive approach.

Integrating mission and strategy

Since its inception Triodos Bank has integrated mission and strategy. Unlike many other banks, Triodos focuses on risk, return and impact. And it always has. That means this is a material topic, the boundaries of which encompass its entire activity.

Integrating mission and strategy influences everything the organisation does, from its governance structure – which safeguards the mission of the bank – to its exclusive focus on sustainable investments. Being a ‘Frontrunner in responsible finance’ and ‘Unlocking our purpose’ are two of Triodos Bank’s three key strategic objectives and both reference mission explicitly. The third strategic objective, ‘One Bank’ that’s redesigned, responsive and robust, links to the long-term resilience of a financial institution which is a key principle of values-based banking.

Thought leadership

The analysis shows our stakeholders think it is important that Triodos Bank acts as a thought leader. We also believe Triodos Bank should play a role in this way, acting as a frontrunner in the banking sector because this can stimulate change in others. This is true for the activities we finance in specific sectors, and for the debate about how to improve the banking system in service of society and the challenges we face for example. Our role in the development of a financial sector paragraph in the Dutch Climate Accord and the launch of the United Nations Principles for Responsible Banking are examples of this in practice.

As a pioneer Triodos Bank aims to be a catalyst for change in the banking sector, beyond its immediate activities financing sustainable sectors. Changing the financial system so that it is better able to serve people while taking care of the environment we depend on is fundamental to our mission, hence its inclusion as a material topic. To do this we need to be experts in our field both as a bank and as experts in financing specific sustainable sectors. That’s why we include sector knowledge, as well as being an expert in sustainable finance, within the boundary of this topic.

In 2019 that translated into the publication of vision papers on energy and climate and food and agriculture, for example. We also participated in several round table discussions in the Dutch Parliament about these topics, and the role of the financial sector. On a European level we are involved in discussions about a sustainable finance action plan, specifically related to taxonomy. The third key impact theme in our strategy is social inclusion, which is itself a separate material topic.

Our work on this topic is led by Triodos Bank’s Chief Economist and a small team at Head Office as well as by senior management in Triodos Bank’s country operations and Triodos Investment Management. Most of the resources applied to this work are in the form of people’s time, typically via speaking opportunities and collaboration on working groups and in partnerships. Centrally-organised evaluation is undertaken by the Chief Economist, based on input from the banking entities and Triodos Investment Management in particular and reported to a broad base of relevant internal stakeholders. This evaluation informed the development of a ‘Change Finance’ strategy in 2019 to be used in 2020 and beyond.

Our role in the development of a global programme to account for the carbon footprint of loans and investments and an active role in the development of the United Nations Principles for Responsible Banking, which launched during the year, are examples of this in practice.

Client relationships

Client relationships are a material topic, not least because strong relationships limit the chances of loans and investments going wrong and make working through challenges with clients easier when problems do occur. This is especially true of, and important to, values-based banks who engage closely with the people they finance and the sectors they work in. In addition, as a bank with a stakeholder rather than a shareholder focus, this topic and our impact also applies to personal clients of all kinds. As part of this approach, we focus on improving our customers’ experience. Deepening our relationship approach has been a key strategic objective and is an integral part of Triodos Bank’s model. Indicators of our engagement on the topic include Net Promoter Scores, a mechanism to determine how positive, or otherwise, our clients regard their relationship with Triodos Bank. In addition, a grievance mechanism is in place for clients of all types.

Products with a purpose

We believe we should focus on offering products with a purpose that support the sustainable movement we want to see. An example is our private mortgages, available in some of the countries where we are active, which stimulate clients to improve the energy efficiency of their home by offering a discount on their mortgage as the environmental performance of their home improves. This year we have included ‘stimulating clients’ within the 'Products with a purpose' material topic as the two are closely related. The products we offer serve to prompt or stimulate actions from our clients, as the mortgage example above shows. They increase our relevance to clients and society. This topic refers to all our products because they all contribute to the development of sustainable sectors. Details of these can be found from page 35 onwards.

We believe we should focus on offering products with a purpose that support the sustainable movement we want to see. An example is our private mortgages, available in some of the countries where we are active, which stimulate clients to improve the energy efficiency of their home by offering a discount on their mortgage as the environmental performance of their home improves. This year we have included ‘stimulating clients’ within the 'Products with a purpose' material topic as the two are closely related. The products we offer serve to prompt or stimulate actions from our clients, as the mortgage example above shows. They increase our relevance to clients and society. This topic refers to all our products because they all contribute to the development of sustainable sectors. Details of these can be found here and here.

Products are developed and managed at a business unit level, by specialists in relevant fields. Platforms at Group level also provide a space to agree significant new products, share best practice and evaluate their success or otherwise across business units. This ensures that we can respond to local demand with appropriate, mission-linked products and services. And it’s why products with a purpose are an important part of our strategic effort to ‘unlock our purpose’.

Social inclusion

Social inclusion – inequality of opportunity – is increasingly dividing society. Triodos Bank wants to focus on exploring the role finance can and should play to address this societal challenge. Therefore, Triodos Bank is stepping up efforts to help realise putting social inclusion into practice, both for its clients and stakeholders and for itself. The latter was highlighted as a particularly relevant point by stakeholders who expect us to be socially inclusive as an organisation.

We also share the priority that our stakeholders have in helping our borrowing clients to become even more sustainable. You can find examples, including interviews with borrowers, in the impact chapter.

Resilient financial institution

Being a resilient financial institution is important for all banks and is an explicit principle of values-based banking. It is the bedrock from which values-based banks can deliver positive impact. An effective approach to risk management is one key element ensuring the long-term resilience of Triodos Bank.

Last year we included ‘more diverse portfolio’ and ‘European network’ as separate material topics. This year we have combined them within the boundary of the resilient financial institution topic, because these issues are so closely connected. A diverse portfolio helps to cushion Triodos Bank from disruptions in a single sector, for instance, helping it to become more financially resilient in the process. While a European network provides the benefits of multiple market opportunities, the chance to share best practice and enjoy economies of scale and avoids vulnerability to the impact of adverse impacts on a single market.

Financial resilience is a topic highlighted in many places throughout the annual report. This includes the Impact and financial results, Risk management chapter, and Financial accounts sections.

Protecting client data

Privacy of client data is important to both Triodos Bank’s stakeholders and the organisation itself. Triodos Bank believes money can help change the world and that data can as well. Data can be used to better understand both the world and people. This understanding can be used to prevent waste, reduce costs and create benefits for society. Data helps Triodos Bank to become a better bank by improving its service offerings and operations. It helps discover or predict risks, fraud and enhance the reliability of its services. Triodos Bank knows the (personal) data it processes can be sensitive and can impact the privacy of its clients and employees. As such, it is committed to respecting privacy and ensuring data protection.

When it comes to privacy and data protection, Triodos Bank believes:

  • that data is an abstraction, reduction of reality and an interpretation of behaviour. The world cannot be captured in abstractions. People should not be reduced to the data collected about them. And while data refers to the past it is not always a reliable predictor for the future
  • that every individual has the right to be different in different situations, in other roles or at different times
  • that each individual should maintain power and control over her or his own life, including personal data. This calls for freedom of choice, fairness and transparency on data collection, processing and usage
  • that data is valuable; therefore, Triodos Bank has an obligation to keep the data it holds accurate, secure and confidential.

In addition to the issues we highlight there, we also publish an extensive Data Protection Policy ‘Respecting privacy and protecting personal data’ at www.triodos.com/download-centre.

Fair remuneration

Despite continued public debate about remuneration, this topic does not have the highest priority for our stakeholders and the bank. This may reflect satisfaction with the prevailing approach to remuneration at Triodos Bank and suggests that our policy is well understood. Triodos Bank does not offer bonuses and has a relatively low difference between its median and highest salary. For more details of our remuneration policy, and our performance as a responsible employer, please see the co-worker report.

Responsible employer

As a responsible employer Triodos Bank’s responsibility is to create a welcoming, inclusive environment for all. A diverse co-worker community contributes positively to Triodos Bank’s effectiveness and vitality. This year, we have included ‘diversity in the organisation’ – which was a separate material topic in last year’s report – within the boundary of the responsible employer topic.

Triodos Bank’s role as a responsible employer is governed by a Director of Human Resources at Head Office and specialists in its business units who have primary responsibility, and resources, to ensure that the organisation delivers as a responsible employer. Their efforts are underpinned by a number of policies defining this work, including on remuneration, and grievance mechanisms are in place in all these areas. Goals and targets are defined, at Group level, in the annual report’s co-worker chapter and in local plans in the business units.

Terms and conditions of employment are the same for all co-workers in line with national legislation.

Triodos Bank takes the health and safety of its co-workers very seriously. Almost all its offices have a Health and Safety committee present. However, it does not measure the percentage of co-workers represented in health and safety programmes.

Engaging with communities

By directly engaging in business relationships with entrepreneurs, personal customers and depository receipt holders, Triodos Bank mobilises deposits and investments and uses them to finance values-driven entrepreneurs. In this way, Triodos Bank delivers on its mission to be a catalyst for cultural, social and environmental change. As such engaging with communities is a material topic.

The boundaries of this topic are defined by Triodos Bank’s positive lending criteria. These criteria, and the broader business model ensure that a very high percentage of its operations involve engagement with the communities above. This approach also ensures all its borrowing customers and investees are subject to a social and environmental assessment. However, as a bank that does not have a branch network in most of the countries where it operates, these communities are not always local to the business itself. That is also why the bank does not conduct significant local community development programmes.

Triodos Bank discloses the results of its own social, environmental and cultural assessments in its annual and other reports. This work is supported by a stakeholder engagement plan that’s underpinned by a detailed description of our stakeholder groups, which we share in this chapter.

While Triodos Bank does not have local community consultation committees for the reasons above, it does have an active works council in The Netherlands and other worker representation bodies in its network of European offices. It also has a grievance process that makes it accountable to third parties.

Learning organisation

Being a learning organisation, whilst very important to Triodos Bank, is felt to be less important to our stakeholders. For our organisation it remains an important strategic priority, as we believe being able to learn collectively will enhance our efficiency and our ability to act. This topic is covered in more depth in the co-worker chapter.

Through our engagement throughout the year we did not identify any issues that are of very high importance to one party and very low importance to another. This leads us to conclude that Triodos Bank and our stakeholders' areas of interest are much aligned. At the same time, our stakeholders consistently urge us to be a frontrunner in financing innovative and pioneering initiatives, to increase the impact we create in the real economy. How we balance this ambition with being a responsible financial institution, managing impact, risk and return is our responsibility.

We use the results of this stakeholder engagement activity, as well as the examples detailed here, directly in the development of our strategic objectives. The results will also inform our work more generally, throughout the year, as a reference for new ideas and the further development of existing activity. Longer-term we will continue to look for ways to deepen our stakeholder engagement activity in general. Staying closely connected to what matters to our stakeholders and using the wisdom of that community will serve as a basis from which to progress further.

Sustainable suppliers

Working with sustainable suppliers is a material topic for Triodos Bank. It gives us the possibility to extend our positive impact via these important relationships. We further discuss this topic and the impact it has in the environmental chapter of the Executive Board chapter of this report.

For more information about how Triodos Bank engages with its stakeholders visit www.triodos.com/stakeholders.

76%

of our assets are
in the real economy