Triodos Bank supports the sustainable and inclusive transition of our economies and society in line with the Paris Agreement target of limiting the temperature increase to – at most –1.5 degrees Celsius above pre-industrial levels. Our ambition is to be net zero on greenhouse gas emissions in 2035 at the latest.

In this context, in 2015, at the landmark Paris Climate Conference, Triodos Bank co-signed the Dutch Carbon Pledge to measure and disclose its greenhouse gas, or carbon emissions, and to ensure these emissions remained in line with the ambitions of the Paris Agreement. The initiative launched the Partnership for Carbon Accounting Financials (PCAF), a collaboration between Dutch financial institutions which has evolved into the Global GHG Accounting and Reporting Standard for the Financial Industry, allowing stakeholders to compare the GHG emissions of banks and other financial institutions.

1,048 ktonnes

CO2 emissions avoided as a result of sustainable energy projects financed by Triodos Bank

The PCAF Standard in practice

As our main impact in the economy and society stems from our loans and investments, PCAF's harmonised approach focuses on measuring the carbon footprint of these asset classes. Triodos Bank implemented and reported on the PCAF methodology for the first time in 2018 and has disclosed the carbon accounting of 100% of our loans and funds’ investments since 2019. In 2022 we have also included the financed emissions of other loans and investments, for example those related to our Treasury activities. By mapping emissions per sector, we can identify current hotspots within our portfolio.

Guided by PCAF's Global GHG Accounting and Reporting Standard for the Financial Industry and in collaboration with the PCAF consulting team from Guidehouse, we defined our reporting and measurement principles as follows:

  • While GHG emissions include other gases besides just carbon, we use the latter as shorthand for GHG emissions in our reporting.

  • GHG emissions are measured in tonnes CO2 equivalent (CO2e) and categorised as three main types:

    • Generated emissions: GHG emissions arising from various economic activities. This refers to carbon that is emitted into the atmosphere.

    • Sequestered, or absorbed, emissions: GHG emissions stored in carbon sinks, such as trees, plants and soil etc. This refers to the actual removal of carbon from the atmosphere.

    • Avoided emissions: GHG emissions that are avoided from fossil-fuel power generation due to renewable energy. While avoided emissions play a very positive role, they do not remove existing carbon from the atmosphere. That is why we present these avoided emissions in our graphs and tables beneath actual emissions. And it is important to note that our avoided emissions figures will, eventually, start to decline, even as the amount of energy generated by the renewable energy projects we finance increases. This is because the wider energy system is in the process of becoming less carbon-intensive overall. Energy from fossil-fuel sources will continue to decline while energy from renewable sources is increasing, creating a more sustainable energy system.

  • In the calculation of our financed emissions we have applied the attribution approach. This means that we calculate the emissions as they relate to the proportion of our finance in a project or on a customer's balance sheet. For example, if we are responsible for half of a project’s finance, we report half of the emissions generated or avoided by that project. This attribution approach is a more accurate reflection of Triodos Bank’s responsibility for the GHG emissions it finances and is consistent with the PCAF methodology.

  • We aim to improve the overall data quality level of our carbon footprint measurements each year to improve our insights and better steer on targets. The data quality levels are defined in the ‘data quality’ table below.
    This year, overall data quality stayed stable on 3.2 (restated, was: 3.5) on a five-point scale, with 1 being considered the highest score. The main cause of the increased data quality score in 2022 and the restated figure in 2021, is the application of the GHG emissions lookup table for residential real estate in the Netherlands for both years. This emission factor table is developed by the PCAF NL working group and uses public energy consumption data from the Central Bureau of Statistics (CBS), together with energy label and house types. As a result, the data quality scoring for the Dutch part of the residential mortgage portfolio improved from 4.0 to 3.0. In other sectors there were some modest improvements in collecting better data to estimate the GHG emissions.

Data quality levels

For readers with a more detailed interest, a separate GHG accounting methodology report on how the PCAF standard was applied to our portfolio is available on our website.