As well as financing progressive entrepreneurs, we also aim to influence the financial sector and the shape of the economic system at a national and global level, to help deliver our mission. We believe that the more sustainable, diverse and transparent are financial industry operations, the more money will be used consciously, and the greater the improvement in people’s quality of life. This is a cornerstone of a regenerative and inclusive economy that enables people and communities to prosper with respect to ecological limits.

We change finance in different ways. We publish vision papers, write opinions, support letters to government bodies and join calls for action. We share our knowledge and expertise on sustainable finance with policymakers, politicians and supervisors in meetings or through feedback in public consultations. We encourage other financial institutions to make different choices and commit to sustainable finance. We work together with like-minded organisations and create formal and informal partnerships to strengthen each other. This is done locally in the countries in which we operate as Triodos Bank, but also at European and international levels.

Triodos Bank engages with domestic policymakers and others on the future direction of the financial industry in every country where we are active. In 2021, we actively contributed to consultations by the European Union, including on the Retail Investment Strategy and the proposals for harmful and social taxonomies. Triodos Bank also published its position on the Corporate Sustainability Reporting Directive (CSRD) and the new Banking Package. In its position on the CSRD, Triodos Bank advocates one reporting framework that includes both financial and sustainability information with the same scope, same degree of enforceability, proportional to firms’ sizes and making use of materiality-concepts. In its position on the Banking Package and the final implementation of Basel III, Triodos Bank advocates a diverse banking system supported by a faster implementation of the floors on capital requirements and stronger oversight of sustainable finance and ESG risks, which require longer-term prudential considerations. In the Taxonomy reporting chapter we elaborate more on recent EU Taxonomy developments.

A major topic in the financial sector is how to contribute to reducing GHG emissions to tackle climate change. Following the financial sector commitments in the Netherlands and in Spain in 2019 and the German commitment in 2020, Triodos Bank joined the Net-Zero Banking Alliance (NZBA) convened by the UN in April 2021. Members commit to adopt policies and strategies to reach a net-zero economy. We encourage all banks to set targets to reach net-zero well before 2050. We are running out of time and without strong action from all global stakeholders, the Paris climate goals will be out of reach. We want to be net-zero as soon as possible ourselves, at the latest by 2035. Triodos Bank announced this pledge in the run-up to COP26 in Glasgow in November 2021. Co-workers from Triodos Bank UK were present at COP26 to advocate for sustainable finance and challenge the financial sector.

Triodos Bank Netherlands advocates that lending standards for mortgages should be linked to the energy bill of a house. After introducing this in its own lending standards for mortgages in 2020, Triodos Bank Netherlands now sees growing momentum for this position. One of the focal points of Triodos Bank Belgium was biodiversity this year, topped with a well-attended online client event with 18 different speakers. Triodos Investment Management made a podcast on a future-proof economy. The managing director of Triodos Bank Germany has been in conversation with their authorities on the Taxonomy and the Banking Package. In Spain, the Climate Change Law, including the provision on portfolio alignment with the Paris Climate Agreement for financial institutions, has passed in 2021. Triodos Bank Spain contributed to discussions on this law. These are all specific examples of how we try to change finance in the broadest sense. In all our public appearances, opinion pieces, publications or interviews we highlight the transformational power of money and the role of the financial sector in society.

Our view on European developments in regulations and directives

Triodos Bank is a strong supporter of the Renewed Sustainable Finance Strategy and a taxonomy rooted in climate and environmental science. We see a clear role for the financial sector to contribute to a more sustainable and resilient society, especially now that the COVID-19 pandemic has highlighted the critical need to strengthen the sustainability and resilience of our societies and revealed weaknesses in the ways in which our economies function. We also recognise the urgency of transparency: clear comparability between financial institutions is needed to counteract greenwashing.

EU Taxonomy developments

Triodos Bank believes a good taxonomy promotes transparency, counters greenwashing and drives the shift of capital towards the sustainable economy of the future. However, it is important that Europe does not include natural gas and nuclear energy as ‘green’, now that several Member States are pushing to label the use of natural gas and nuclear energy as sustainable. Alongside other financial institutions, Triodos Bank expressed deep misgivings. We believe that gas and nuclear energy are broadly incompatible with the original aim of the Taxonomy project: a science-based list of truly green economic activities and related financial products. The sustainable transition will not benefit from a vague and ambiguous taxonomy.

The EU’s Sustainable Finance Action Plan (SFAP)

In May 2018, the European Commission adopted new legislation to steer the financial industry towards three key goals:

  1. Re-orient capital flows towards sustainable investment to achieve sustainable and inclusive growth

  2. Incorporate sustainability into risk management

  3. Foster transparency and long-termism in financial and economic activity

At Triodos Bank, we have been guided by similar principles since our foundation over 40 years ago. We therefore fully support and underline the importance of these regulations. With the implementation of the Sustainable Finance Disclosure Regulation (SFDR), there will be more regulatory pressure to report on sustainability from 2020 onwards. Even though this means more reporting pressure, we encourage the implementation of the SFDR as it will also put pressure on the sector to become more sustainable. Having been a values-based bank since our establishment in 1980, we believe that our business model, business principles, minimum standards and reporting on key impact matters (qualitative, quantitative, positive and negative) uniquely equip us to adapt to the SFAP.