Explaining the template

The reporting template shows what is in and out of scope in determining the Taxonomy-eligible assets and exposures. The template is based on Annex VI of the Taxonomy regulation published in December 20211 and contains both our mandatory and voluntary disclosure. Triodos Bank has made amendments to this template as several elements were unclear or fit for multiple interpretations.

The 2021 Taxonomy-eligibility assessment includes our business loans, Treasury positions, mortgage loans,(specialised lending to) municipalities and equity positions on our balance sheet. Exposures within Triodos Bank UK are to be considered if they are to (subsidiaries of) an EU based group. Triodos Investment Management activities are seen as ‘Assets under Management’ which is not included in the mandatory reporting for FY2021. Additionally, while Triodos Investment Management is active in Europe, the global activities outside the EU fall out of scope for Taxonomy-eligibility. Other asset management activities within Triodos including private banking and activities of TRMC also remain out of scope as these do not meet the UCITS/AIF qualification. In the future these activities will be relevant for the EU Taxonomy KPI on Fees and Commissions, which will become applicable as per 2026.

For a more detailed methodology on how we report on the EU Taxonomy, we refer to our online publication. There are three main data sources that flow to the EU Taxonomy reporting template: Business Banking, Triodos Investment Management and our Treasury positions. The EU Taxonomy information is disclosed at the level of “prudential consolidation”, meaning on the basis of the prudential consolidated financial statements that are disclosed in the context of supervisory financial reporting (FinRep). To ensure consistency with the annual accounts, FinRep is reconciled with the IFRS figures. The major difference stems in the requirement to report EU Taxonomy figures in gross carrying amounts (amortised cost of a financial asset before adjusting for any loss allowance) , whereas the IFRS balance sheet total is reported in carrying amounts. While FinRep is reconciled with the annual accounts, the external audit on the FinRep figures commences in Q2 2022, meaning that the FY2021 FinRep figures are not audited at the time of publication of the FY2021 annual report and therefore may be subject to change.

Assumptions and limitations

The first year of implementation has several limitations. It only became clear in December 2021 that NACE codes were not allowed to estimate Taxonomy-eligibility in the mandatory disclosures. As no actual information is collected yet from clients on their eligibility disclosures, the mandatory disclosures on the EU Taxonomy-eligibility provide very limited information. Triodos therefore discloses on a voluntary basis eligibility based on client NACE codes, while recognising several limitations on using NACE codes as an estimation of Taxonomy-eligibility. For a selected subgroup of NFRD-obligatory non-financial counterparties that are not eligible based on NACE code we have performed additional analysis on the nature of these client activities. These clients were not eligible based on their NACE code. For D35 (Energy), only level 4 NACE codes are included in the Technical Sreening Criteria. However, looking at the Triodos Bank internal (Risk) sector code, all these clients are active within renewable energy and generate renewable energy according to our impact data. Therefore they are Taxonomy-eligible as they contribute to Climate Change Mitigation. In the future we hope to increase our NACE code data quality and base our Taxonomy-eligibility assessment on more solid information than only NACE codes, by using for example direct client input or impact-related information to determine Taxonomy-eligibility.

For a correct categorisation of the numerator and denominator we need to know if a counterparty is subject to NFRD disclosure obligations. For this NFRD assessment, no public database or repository is present in the EU to determine which counterparties must report on non-financial information. The process therefore is a complex and manual exercise as the legal criteria for NFRD differ per country. Triodos has made the assessment on a best effort basis and used professional judgment to determine which clients are under the scope of the NFRD. In order to determine which counterparties are NFRD obligatory, we performed an assessment based on the varying EU-member state legislations for the countries we are most active in and using the general NFRD thresholds for other countries. The NFRD check consisted of two steps. In the first phase we determined whether counterparties on an entity or consolidated basis met the size thresholds for NFRD. If these size thresholds were met, a PIE (Public Interest Entity) assessment was performed. This was manual work which, amongst others, involved the creation of a PIE database that was pulled from different sources within the EU. As the approach for identification of NFRD-obligatory counterparties will vary across banks, we strongly suggest a central repository on NFRD counterparties in the EU.

Regarding data, a gap is present on the level of detail for specialised lending. While information is present on which exposures can be seen as specialised lending, the exact use of proceeds is to be collected at a lower level of detail.

Additionally, limitations exist in the application of the quantitative reporting template. The final reporting template in Annex VI has only been published on the EU Official Journal in December 2021. Also, in December 2021 (and updated in February 2022) the EC has provided non-binding FAQs containing further guidance on the EU Taxonomy disclosures. To comply with our reporting obligations despite these delays, Triodos Bank has applied professional judgment in understanding the reporting template and making adjustments to both report in the spirit of the Taxonomy and to retrofit the template to what Triodos Bank can realistically report on. We have chosen to report on total Taxonomy-eligibility figures in the first reporting year as there is overlap in the voluntary disclosure between Climate Change Mitigation and Climate Change Adaptation in terms of economic activities.

There has been much debate between banks on how to interpret the reporting requirements, which may lead to differences between banks in applying the EU Taxonomy. One of our core values is transparency, hence we want to be open about our Taxonomy figures. But we do need proper and consistent guidance from the regulatory bodies on how to apply the Taxonomy.

 

 

 

Mandatory disclosure1

Voluntary disclosure1

in millions of EUR

Total gross carrying amount

Of which Taxonomy-eligible

Taxonomy-eligibility %

Of which Taxonomy-eligible

Taxonomy-eligibility %

1

GAR - Covered assets in both numerator and denominator

4,460

3,815

85.5%

4,039

90.6%

2

Green and sustainable bonds

55

49

89.1%

49

89.1%

3

Financial corporations

30

30

100.0%

30

100.0%

4

Non-financial corporations

24

18

75.0%

18

75.0%

5

Loans and advances, debt securities other than green bonds and equity instruments not HfT eligible for GAR calculation

4,399

3,760

85.5%

3,983

90.5%

6

Financial corporations subject to NFRD disclosure obligations

103

-

0.0%

-

0.0%

7

Credit institutions subject to NFRD disclosure obligations

79

-

0.0%

-

0.0%

8

Loans and advances

68

-

0.0%

-

0.0%

9

Debt securities, including UoP

-

-

0.0%

-

0.0%

10

Equity instruments

11

-

0.0%

-

0.0%

11

Other financial corporations subject to NFRD disclosure obligations

24

-

0.0%

-

0.0%

12

Loans and advances

23

-

0.0%

-

0.0%

13

Debt securities, including UoP

1

-

0.0%

-

0.0%

14

Equity instruments

-

-

0.0%

-

0.0%

15

Non-financial corporations subject to NFRD disclosure obligations

313

-

0.0%

224

71.6%

16

NFCs subject to NFRD disclosure obligations

313

-

0.0%

224

71.6%

17

Loans and advances

297

-

0.0%

208

70.0%

18

Debt securities, including UoP

16

-

0.0%

16

100.0%

19

Equity instruments

-

-

0.0%

-

0.0%

20

Households

3,811

3,636

95.4%

3,636

95.4%

21

of which loans collateralised by residential immovable property

3,636

3,636

100.0%

3,636

100.0%

22

Specialised lending to local governments

172

123

71.5%

123

71.5%

23

of which public housing

1

-

0.0%

-

0.0%

24

of which other specialised lending

171

123

71.9%

123

71.9%

25

Collateral obtained by taking possession: residential and commercial immovable properties

7

7

100.0%

7

100.0%

26

Other assets excluded from the numerator for GAR calculation (covered in the denominator)

6,412

 

 

 

 

27

Financial corporations not subject to NFRD disclosure obligations (EU)

559

 

 

 

 

28

Credit institutions not subject to NFRD disclosure obligations

206

 

 

 

 

29

Loans and advances

13

 

 

 

 

30

Debt securities, including UoP

190

 

 

 

 

31

Equity instruments

3

 

 

 

 

32

Other financial corporations not subject to NFRD disclosure obligations

354

 

 

 

 

33

Loans and advances

348

 

 

 

 

34

Debt securities, including UoP

5

 

 

 

 

35

Equity instruments

-

 

 

 

 

36

Non-financial corporations

4,097

 

 

 

 

37

Non-financial corporations not subject to NFRD disclosure obligations (EU)

4,097

 

 

 

 

38

Loans and advances

4,048

 

 

 

 

39

of which loans collateralised by commercial immovable property

1,113

 

 

 

 

40

Debt securities

48

 

 

 

 

41

Equity instruments

1

 

 

 

 

42

Non-EU country counterparties not subject to NFRD disclosure obligations

1,358

 

 

 

 

43

Non-EU Credit institutions

24

 

 

 

 

44

Loans and advances

1

 

 

 

 

45

Debt securities

12

 

 

 

 

46

Equity instruments

11

 

 

 

 

47

Non-EU Other Financial Corporations

40

 

 

 

 

48

Loans and advances

36

 

 

 

 

49

Debt securities

-

 

 

 

 

50

Equity instruments

3

 

 

 

 

51

Non-EU Non-Financial Corporations

1,294

 

 

 

 

52

Loans and advances

1,294

 

 

 

 

53

Debt securities

-

 

 

 

 

54

Equity instruments

-

 

 

 

 

55

Derivatives

20

 

 

 

 

56

On demand interbank loans

145

 

 

 

 

57

Cash and cash-related assets

-

 

 

 

 

58

Other assets (e.g. Goodwill, commodities etc.)

232

 

 

 

 

59

Total GAR assets

10,872

3,815

35.1%

4,039

37.2%

60

Other assets not covered for GAR calculation

5,682

 

 

 

 

61

Sovereigns (exposures to regional and central governments and regular lending to local governments)

1,354

 

 

 

 

62

of which central governments

563

 

 

 

 

63

of which regional governments and local governments (regular lending)

791

 

 

 

 

64

Central banks exposure

4,328

 

 

 

 

65

Trading book

-

 

 

 

 

66

Total assets2

16,554

3,815

23.0%

4,039

24.4%

Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations

68

Financial guarantees

1

-

0.0%

1

100.0%

69

Assets under management

810

-

0.0%

289

35.7%

70

Of which debt securities

179

-

0.0%

59

33.0%

71

Of which equity instruments

632

-

0.0%

229

36.2%

72

Of which Mixed (debt Securities and equity instruments)

-

-

0.0%

-

0.0%

1

Empty highlighted sections are intentionally left blank. No information is displayed as assets only included in the denominator by their definition are not tested for Eligibility.

2

Gross Carrying Amount excludes impairments on loans and advances, therefore the total assets in this table is EUR 50 million higher than reported in the FinRep F01.01 or IFRS Total Assets in which deductions for impairments are included (carrying amount).

  1. Annex VI can be found on https://ec.europa.eu/info/law/sustainable-finance-Taxonomy-regulation-eu-2020-852/amending-and-supplementary-acts/implementing-and-delegated-acts_en . The direct link to Annex VI is http://ec.europa.eu/finance/docs/level-2-measures/Taxonomy-regulation-delegated-act-2021-4987-annex-6_en.xlsx