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Mission-driven strategy

USD 100 billion

The GABV's combined
member's total balance
sheet assets amounted
to USD 100 billion by
the end of 2014.

Triodos Bank’s strategy is aligned with our mission and responds to what’s needed in the outside world. Last year we described that strategy in more depth for the first time, as presented in the table below. How we integrate and safeguard our mission in a successful strategy remains a key focus for the bank, and is an important item for discussion in the Supervisory Board and Board of SAAT.

We want to build on that work by incorporating any previously excluded material issues, highlighted above, so you can see our strategic approach to dealing with the issues of most importance to both the bank and its stakeholders. We also want to provide more detail of qualitative and quantitative goals. At the same time we do not want numbers to become an end in themselves, because that could lead us to focus on the wrong things. In our view, these numbers should be understood in a wider context.

Strategic Objectives

The table that follows provides the key strategic objectives for Triodos Bank for 2015, the extent to which we are delivering them and goals for 2015 so you can see how we are progressing against them.

This represents the first year that we have added specific goals for the following year. This information is designed to reflect some of the key issues raised in the materiality analysis that are priorities for Triodos Bank and our stakeholders.

Triodos Bank

Our key strategic objectives

How we did in 2014

Our goals in 2015

To continue to ensure what we do reflects who we are; integrating our mission and strategy.

A long-term strategic perspective programme took place during the year exploring Triodos Bank’s potential role in a number of future scenarios. Results – published in 2015, will be used as input to 3 and 10 year planning.

Energy and climate vision created as result of cross-bank collaboration (visit our website).

Publish Triodos 2025, long-term strategic perspective, output and use for internal planning process.

Design and implement strategy maps for the three key business pillars (Triodos Bank, Triodos Investment Management and Private Banking) to clearly represent how we will meet our mission in social, environmental and cultural sectors.

To continue to align our mission and strategy within the key social, environmental and cultural sectors, through the development of shareable content on our vision, such as short films, for sustainable property, health and care and food and agriculture.

To be recognised by key influencers as a reference point for values-based banking, contributing to the development of a more diversified, transparent and sustainable banking sector.

Led European contribution to G8 Social Impact Investment Taskforce on Impact Investment and author of ‘Impact Investing for Everyone’ report.

Continued to Chair the Global Alliance for Banking on Values (www.gabv.org) including active role in the world’s first 24 hours of values-based banking’ event.

Led debate about the future of the banking industry at high profile events, including Sustainable Finance Lab events, in the Netherlands.

Extended presence across all branches, with a combined total of 12,750,000 web visitors, 140,000 Facebook fans and 2,700,000 views of Triodos Bank films on Youtube.

Continue to play leading role in development of GABV, as Chair, and active role in the Sustainable Finance Lab.

Representation on the Global Impact Investing Network Board.

Co-chair the European Task Force on Banking and Member of the UNEP FI Steering Committee, which aims to impact the sustainability aspects of financial regulation and promote positive impact within the financial sector.

Engaging with Clients and Stakeholders.

Next to annual client days in all branches and inspiration sessions with external advisors, we delivered our first formal stakeholder engagement process, as part of materiality analysis for this annual report.

5,000 depository receipt holders participated in depository receipt holder survey (2013: 3,000).

Internationalise and extend stakeholder engagement process to all countries.

Client and depository receipt holder meetings arranged in all countries.

Depository receipt holder survey undertaken.

Theme days hosted with co-workers and external parties respectively.

To grow our impact by maintaining a clear focus on financing sustainable business.

We continued to provide 100% of our loans to the sustainable enterprises in the real economy. The loans to deposit ratio when calculated against our impact lending remained stable at 63%.

The increase in the annual accounts (from 63% to 68%) is caused by the fact that short term investments are accounted for as loans, but were, in practice, part of the investment portfolio.

Broaden participation in Impact Investing for retail audiences through the creation of an impact investing platform to argue for greater access to impact retail investment.

Improve loans to deposit ratio, excluding short term investments, to between 65% and 70%.

To become the ‘bank of preference’ for our customers.

Offered a credible set of services in The Netherlands and Spain, including sustainable mortgages, current accounts, ATMs, and POS machines.

An in-depth feasibility study for the launch of a current account for retail clients in Belgium concluded that the current market conditions and costs in Belgium were too great a risk for a successful launch and the project was postponed.

Develop current account in UK market for launch in 2016.

In Spain, deliver a new technological platform with a new online banking system including mobile banking.

To focus on long-term resilience over short-term profit, and offer a fair return on equity.

Delivered a return on Equity (RoE) of 4.4%. The RoE on the strategic minimal capital is 5.9%. (Triodos Bank maintains a relatively high equity base and a substantial liquidity surplus which results in a lower RoE).

Delivered leverage ratio of 8.8%, compared to a minimum leverage ratio of 3% required in Europe.

Continued to only finance loans with customer’s savings, and not through money market facilities from other banks.

We aim for a RoE of between 4 and 5% in 2015. A RoE target of 7% should be considered a realistic, long-term average, in normal market conditions.

Leverage ratio of at least 8%.

To strengthen and continue to develop a Pan-European base.

French representative office developed in line with plans, working with Belgian office to increase their combined lending by 20%.

Sector plans created in all major sectors, and group-wide collaboration via initiatives such as an Energy Experts Group, informing plans for future branch-specific activity.

Risk management, control and reporting functions strengthened (including the appointment of a Director of Risk), and decision-making between branches and central office clearly defined, as part of a group-wide internal governance project.

The German branch has not reached profitability as quickly as anticipated due to slower growth in lending than projected and the managing of deposits to keep the two in balance. This has resulted in a delay in reaching break even.

Expand activity in existing branches and review the feasibility of creating a branch in France.

Open four to six new offices in Spain.

Open new, public-facing office in Gent, Belgium.

Development of cross-bank collaboration and engagement platform.

Cross-bank theme days, sharing knowledge from mature branches with newer ones.

Improve German profitability (negative in 2014) by growing lending by 26%.

Internal governance changes in 2014 evaluated as ‘business as usual’ in 2015.

Central Director of Business Banking, Marketing & Retail Banking and Operations appointed to strengthen Pan-European approach.

To deliver a stable balance sheet, by increasing the diversity in our loan portfolio.

A focus on sustainable mortgages was responsible for almost a fifth (18%) of the total increase of the loan portfolio in 2014 (2013: 33%). Mortgages were offered in The Netherlands, Belgium and Spain providing EUR 404 m in finance by year end (2013: EUR 274 m).

The long term goal is to increase sustainable mortgage lending in The Netherlands and Belgium significantly. In 2015 this will mean an increase of between 9% and 12%.

To encourage co-workers to actively engage in a learning organisation.

Weekly ‘Monday morning meetings’ continue to provide opportunity for all branches and business units to convene and discuss shared issues.

Visionary Leadership Programme with 13 participants from across the business units.

Induction programmes for new co-workers locally and an international programme at Head Office.

Values seminar three times a year for co-workers from 1-3 years of service.

Meetings between co-workers and business clients, such as four ‘encounters’ in Spain.

Extended International Management Council with 40 senior managers from all Business Units for sharing, networking and exchanging developments and challenges within the organisation.

Several locally organised meetings with clients, key note speakers and visits to clients for inspiration and to strengthen the connection between the Triodos community and our clients/stakeholders.

Training in Dynamic Judgement Formation and meditation and mindfulness training delivered at head office.

Implement a new a platform across the bank to improve collaboration on joint topics. Active participation from at least five business units.

A more international head office will be supported by at least one non-Dutch senior appointment, and regular meetings for all head office co-workers conducted in English.

At least six study group meetings for new co-workers introduced.

Triodos Investment Management (TIM)

Our key strategic objectives

How we did in 2014

Our goals in 2015

Triodos Investment Management will deepen and extend its impact, further building on its position as the experienced and professional impact investment partner of preference.

Total Assets under Management amounted to EUR 2.66 billion from solid inflows in most funds. Specialised microfinance funds provided finance to 102 microfinance institutions (2013: 97) in 44 countries (2013: 44), serving approximately 8.2 million savers (2013: 7.9 million), and 11 million borrowing clients (2014: 8.4 million).

Triodos Investment Management aims to grow its assets under management to EUR 3.2 billion in 2015.

It also aims to expand its international distribution network and to increase its position with High Net Worth individuals and semi-institutionals.

Triodos Investment Management will continue to develop new impact investment solutions.

Triodos Organic Growth Fund, a long-term private equity evergreen fund, was launched in January 2014 and has made two investments during the year.

The Triodos SRI funds passed the EUR 1 billion milestone and the development of the methodologies of these funds has progressed further during 2014.

The management of the Ampere Equity Fund was transferred to another manager early in 2014.

Triodos Investment Management aims to expand within existing funds and create new values-based investment solutions.

Triodos Investment Management will explore the development of its SRI funds further.

Triodos Bank Private Banking

Our key strategic objectives

How we did in 2014

Our goals in 2015

Develop Private Banking, through meaningful dialogue, as an important addition to Triodos Bank’s retail offering to meet the demand for an holistic approach that combines financial advice, financial returns and personal values.

Developed dialogue with these clients via separate meetings on the theme of the alternative use of money.

Extended advisory services for clients with investable assets of more than 500,000, to invest in social entrepreneurs.

Grow investable assets for clients investing between EUR 300,000 and EUR 500,000.

Continuous system improvement to offer more and better services to clients.