Engagement is key. Our vision on impact stems from understanding that metrics and targets do not tell the whole story. In practice, that means we try and find qualitative evidence of the impact first and foremost, and back it up with numbers when it is relevant to do so. Where we do lean on data, we measure in order to manage and we use this to start the conversation with our stakeholders on how we lead the transition to an even more inclusive and sustainable world. For more information on our approach to stakeholder engagement, see Our stakeholders and material topics.

While meaningful indicators are included in, for example, Impact by sector , we limit the use of ‘hard metrics’ in our impact measurement.

To support this more holistic approach, the Triodos Impact Prism was developed in 2018 and 2019 to understand, monitor and equip the business to steer on impact in service of their goals. Thirty-five questions identify the broader impact and purpose of each loan or investment, ranging from questions on social justice to its exemplary role in sustainability. The main goal is to use the results to discuss opportunities during the relationship to increase the impact of the customers and projects we finance.

We have been integrating the Impact Prism into our daily business processes since 2019. Usage steadily increased during 2021. The tool was used for more new clients and the coverage of the total portfolio improved. By increasing our coverage this year, we also gained more understanding of how clients experience the use of Prism and how relationship managers can use it to foster high-quality relationships with clients.

We have learned that many clients emphasise the uniqueness of having this type of conversation with their bank. For these clients it truly distinguishes Triodos Bank from other banks. (Some) clients do not yet immediately see the added value of Prism; this requires further communication and development of the Prism. Specifically, we have learned that clients see more value in filling in the Prism for their company as a whole, rather than confining themselves to the specific project or part of the organisation being financed. In 2022, we aim to use these insights to develop the Prism further as a tool for stakeholder engagement.

Alongside our Impact Prism, we measure our own (direct and indirect) and financed (indirect) emissions. These results clearly indicate that financing a sustainable economy for many years has resulted in substantial avoided emissions relative to our generated and sequestered emissions. The emissions of our operations are reported in our Environmental report. Our financed emissions are measured through PCAF and reported in ‘Climate impact of our loans and investments’.

Although Triodos Bank believes that the emissions of our loans and funds' investment portfolio are relatively low compared to other financial institutions, the analysis identifies high-emissions sectors in our portfolio that need effective plans to support a sustainable and inclusive transition towards a climate-neutral portfolio. The science-based targets that we have set this year will help develop ambitious but necessary plans.

Impact measurement frameworks

We are careful not to just retrofit our reporting to meet the requirements of benchmarks or initiatives. We believe meaningful sustainable developments contribute to a fairer economy and come from principle-based decision-making and not from rule-based compliance and ‘box ticking’. However, where relevant external organisations provide frameworks or guidelines for impact measurement, Triodos Bank reports against them. We use a number of frameworks to inform our impact activity, both in delivering and reporting. They include the Global Reporting Initiative, International Integrated Reporting Council, the Partnership for Carbon Accounting Financials, the Global Alliance for Banking on Values and B Corps.

Embedding impact in our organisation

In 2020, we embedded impact management explicitly in our governance with the creation of the Triodos Group Impact Committee (TGIC). Since its establishment in September 2020, the TGIC focuses on: target setting (As One to Zero); streamlining our impact data capture; external commitments which are in line with our mission; embedding growing regulatory requirements, resulting from the EU Action Plan on Sustainable Growth (Sustainable Finance Action Plan, SFAP) and further developing our minimum standards.

In 2021, Triodos Investment Management (T-IM) set up a more extensive impact management structure enabling a flexible response to the quickly developing area of managing and measuring impact of investments. An Impact Management and Measurement domain was established in the spring of 2021. This domain functions as a multidisciplinary team, and acts as an interface between internal ambition, external requirements and implementation within the organisation when it comes to impact. During 2021, the domain mainly focused on its ambitions and internal organisation, on further development of impact frameworks of the funds and on the implementation of European legislation. In 2022, we will continue to build on this foundation, with an added focus on internal education and the implementation of our impact management ambitions.

In 2021, we started a Group-wide Impact Strategy and Management project to embed impact management explicitly in our governance. In 2022, we will further improve and develop it, aiming for:

  • a fine-tuned Group-wide impact strategy;

  • more coordination and cooperation between business units on impact management;

  • streamlined monitoring and reporting processes;

  • an even better capacity to implement new impact initiatives and regulatory requirements.