Investments take place through investment funds or investment institutions which are managed by Triodos Investment Management, a 100% subsidiary of Triodos Bank.
Triodos Investment Management is responsible for 17 funds, for both individual and professional investors. The funds invest in sustainable themes, such as Social Inclusion, Food and Agriculture, Energy and Climate, and in listed companies that materially contribute to the transition toward a sustainable society. The investment funds publish separate annual reports and most of them have their own Annual General Meeting.
EUR 6.4 billion
In 2021, Triodos Investment Management's total assets under management increased to EUR 6.4 billion, a 17% increase (2020: 10% increase)
Like the year before, 2021 was dominated by the influence of the COVID-19 pandemic. While the worldwide vaccination programme has made strong progress in 2021 and restrictions were gradually being lifted during the year, the last quarter demonstrated that the pandemic continues to have an impact on people's health and human lives. Measures to contain the virus and its effects continue.
In 2021, Triodos Investment Management maintained an intensified monitoring of its investments to mitigate any potential increased risks or volatility resulting from the pandemic. In general, Triodos Investment Management navigated the COVID-19 challenges relatively well.
The funds that invest directly in sustainable projects and companies, such as renewable energy projects, organic farming or microfinance, were able to realise stable results in the past year. This is for a large part a result of the high quality of the funds’ underlying portfolios. Especially in emerging markets, the impact of the pandemic is still very substantial, and as such it is impressive to see that the portfolio companies of the financial inclusion funds have been able to withstand the challenges resulting from COVID-19 as well as they did. At the same time, these challenges underline again why our work as an impact investor is now more important than ever. The funds that invest in listed equities and bonds benefitted from the stock all-time highs in the past year, resulting in strong inflows in the funds. On the performance side, the funds performed well, especially taking into account that the funds did not benefit from the outperformance of oil and gas and some big tech stock, such as American tech companies, as they are excluded from investments due to Triodos’ investment beliefs.
From an organisational perspective, Triodos Investment Management was mainly impacted with respect to travel restrictions and the need to work remotely for a very large part of the year. The latter has, however, not only presented challenges, but also opportunities. Overall, Triodos Investment Management is very satisfied with the way in which employees have adapted to the new way of working and how they are able to guarantee the continuity of its funds under management in all circumstances. Therefore, moving forward, working remotely will continue to be part of its new normal.
As a result of the mitigating measures and continued confidence among its investor base, Triodos Investment Management was able to realise an overall growth of assets under management by 17% (2020: 10%) to EUR 6.4 billion, despite the challenging circumstances our global economy and society are facing. The net inflow of funds was 11%. The investment funds overall gained 7% of their value following stock exchange movements in 2021.
Triodos Investment Management retained its focus on strategy execution, more specifically on implementing the strategic goal to be the asset manager of choice for investors seeking solutions for building impact investment portfolios.
Triodos Investment Management expanded its activities in existing and new markets by, for example, increasing its exposure and sales capacity in France. It also launched the Triodos Emerging Markets Renewable Energy Fund, an alternative investment fund that invests in the much-needed energy transition in emerging markets by providing long-term senior debt to utility-scale wind, solar and run-of-the-river hydro projects.
In 2021, the EU Sustainable Finance Disclosure Regulation (SFDR) came into force. All Triodos IM funds available for investors have sustainable investments as their objective as set out in Article 9 of SFDR. As such, they have been designated as Article 9 investment products.
Triodos Investment Management experienced a change in leadership in 2021. Jacco Minnaar was appointed as Chief Commercial Officer and member of the Executive Board at Triodos Bank. Dick van Ommeren, Managing Director, followed in his footsteps as Chair of the Management Board at Triodos Investment Management. In addition, Hadewych Kuiper was appointed as Managing Director per 1 February 2022, to further strengthen the Management Board alongside Dick van Ommeren and Kor Bosscher.
The COVID-19 pandemic has sparked a clear and undeniable demand among investors to invest with positive impact. This is an encouraging development given the fact that the pandemic was a major setback for the global sustainability agenda as articulated in the UN Sustainable Development Goals (SDGs). Private investors are needed more than ever to help to realise those goals.
Within this context Triodos Investment Management will continue to build on over 25 years’ experience in bringing together values, vision, and financial returns on investment, helping to meet the European demand for values-based investment solutions that are key in the transition to a more sustainable society. Through its funds, Triodos Investment Management aims to further increase its impact in key areas related to its mission and the SDGs.
In 2022, Triodos Investment Management’s strategic focus will continue to be on retail investors through distributors, high-net-worth individuals, family offices and (semi-) institutional investors. After the preparatory work done in 2021, resulting in having all preconditions in place, impact mandates that accommodate institutional investors seeking investment opportunities with positive impact will have a stronger focus in 2022.
Triodos Investment Management will continue to pursue development and growth, through expansion, by further developing existing funds and by creating new impact investment products.