The GABV Scorecard
The Global Alliance for Banking on Values (GABV) has developed the scorecard with a view to providing stakeholders with a comprehensive view of an individual institution’s sustainability performance and to allow them ultimately to compare the sustainability performance of different banks.
Triodos Bank is publishing it’s scorecard for a second year. In the future the intention is that all GABV members and other banks will use it, to increase the transparency around sustainability performance of banks for a wider variety of stakeholders.
Explore Triodos Bank’s sustainability performance in the GABV Scorecard, using the tabs below:
The scorecard is divided between basic requirements, quantitative factors supplemented with brief explanations, and qualitative elements. These sections provide details of a bank’s mission and transparency; builds on this with carefully selected data that highlights the extent to which a bank is engaging in sustainability as its core activity; and explains how a sustainability agenda translates into the everyday work of a bank and its co-workers.
Regulated Financial Institution
Triodos Bank is a regulated financial institution with branches in The Netherlands, where its head office is based, Belgium, United Kingdom, Spain, Germany and a representative office in France.
Triodos Bank N.V. falls under the regulatory framework of the Dutch Central Bank (DNB). All Triodos Bank entities, including all its branches are supervised by the DNB. Triodos Bank falls under the Dutch deposit guarantee scheme, effectively protecting savings and deposits up to EUR 100,000.
Triodos Bank offers a full set of banking services in most of the countries where it operates and, in all of them, takes deposits, makes loans and provides cash payment services.
Triodos Bank is in business to:
- Help create a society that promotes people’s quality of life and that has human dignity at its core,
- Enable individuals, institutions and businesses to use money more consciously in ways that benefit people and the environment, and promote sustainable development,
- Provide customers with sustainable financial products and high quality service.
Triodos Bank is Europe’s only pan-European values-based bank.
There is more on Triodos Bank’s mission statement on our website.
Triodos Bank publishes details of all its loans in every country where it operates in a range of ways: including via ‘Know Where Your Money Goes’, an online resource on all its websites, via a mobile app in The Netherlands (the first app in the world to connect a bank’s customers with the enterprises their savings finance), and through various on and offline communications.
Stories and data are reported in Triodos Bank’s annual report, including interviews with entrepreneurs borrowing from Triodos Bank and senior co-workers, detailing the impact of its work.
As an institution that starts with the positive impact it can make Triodos Bank has always produced a report which integrates its financial and non-financial impact. Its impact data was reviewed and assured by auditors, for the second time, in this year’s report. Triodos Bank played a significant role in developing the GRI reporting guidelines, has reported to an A+ level in its annual report in previous years, and has embraced the GRI’s G4 guidelines which put material issues at the heart of reporting.
It has co-created and is an active stakeholder in the Principles for Investors in Inclusive Finance, part of the United Nations Principles for Responsible Investment (UNPRI). It also sits on the Investors Council of the Global Impact Investing Network, among other organisations.
Triodos Investment Management’s funds publish annual reports and host AGMs for their investors, providing open access to the organisation’s co-workers.
Customers are connected directly with the enterprises financed by Triodos Bank through special events and visits in all of its countries, in addition to its Annual General Meeting.
These numbers provide insights into three key elements of a bank’s activity that are all closely linked to how sustainable it is;
- the financial viability of an institution,
- its focus on the real economy (the part of the economy concerned with producing ‘real’ goods and services, as opposed to the part of the economy concerned with buying and selling on the financial markets),
- and the extent to which it focuses on a triple bottom of line of people, planet and prosperity, in its activities.
These measures are derived from the sustainable banking principles, which describe the key pillars of what makes a values-based bank.
Bank Resiliency through Earnings – 3 year Average Return on Assets 0.48%*
(2014: 0.45%*; 2013: 0.41%)
Return on Assets figures tell you how profitable a bank is and are a good measure of a bank’s operating performance. This is important because sustainable banks need to be resilient financially, in order to deliver long term, positive impact.
It’s also reasonable to assume that if a bank’s profits are excessively high they may be taking inappropriate risks and may be enjoying unreasonable profits at the expense of their customers.
* The figure has been adjusted, excluding an one-off bank levy of EUR 8.3 million contributing to the rescue of the Dutch SNS Bank in 2014.
Market Comparison – 3 Year Average Return on Assets 0.34%
(2014: 0.28%; 2013: 0.29%)
To really understand how profitable a bank is, and to avoid comparing ‘apples with pears’, it’s important to compare a bank’s profitability with other banks in the same market.
While Triodos Bank has offices in five countries, as a market comparison we have considered other banks domiciled in The Netherlands. Average ratios have been weighted by balance sheet size (giving greater weight to larger banks). We have only used year end assets data (and not a daily, monthly or quarterly average of assets because these figures are not available). The figure for 2015 is not available currently, but we will update it as soon as it is.
Bank Resiliency through Capital – Equity to Total Assets 9.5%
(2014: 9.8%; 2013: 10.1%)
The Equity to Total Assets ratio tells you how strong a bank is. It includes the total balance sheet, which means it provides a transparent and conservative measure of a bank’s resiliency. This is important for values-based banks which are focused on lasting benefits to society, and so want to develop strong capital positions that make them stronger over the long-term.
Other measures, such as risk weighted assets, are used for the same purpose but they are both more complex and less transparent, so the scorecard has chosen to use Equity to Total Assets instead.
As a guide, a benchmark figure of 8% is significantly higher than regulatory requirements. Triodos Bank’s equity to total assets figure has consistently been well above this level.
Bank Resiliency through Asset Quality – Low-quality Assets to Total Assets 2.5%
(2014: 3.0%; 2013: 2.8%)
Low quality assets (such as loans to enterprises that struggle to repay them), at levels significantly above the market average, are generally a bad thing for banks because they represent the risk of financial losses in the future.
Values-based banks should have strong customer relationships, and have a deep understanding of their activities and the sectors they work in. Together this will limit the chances of loans and investments going wrong in the first place, and should make working through challenges with clients easier when problems do occur. Meaningful relationships with customers and precisely this expertise, is at the core of Triodos Bank’s approach to banking.
Triodos Bank’s low-quality assets to total assets ratio is below the market average in all the countries where it operates.
Market Comparison – Low-quality Assets to Total Assets 2.16%
(2014: 2.20%; 2013: 2.26%)
The quality of a bank’s assets should be compared with banks in the same market to understand how it is really doing.
Triodos Bank’s low-quality assets to total assets ratio compares favourably with the market average.
The figure for 2015 is not available currently. We will update it as soon as it is.
Bank Resiliency through Client Based Liquidity – Client Deposits to Total Assets 88.7%
(2014: 87.9%; 2013: 87.6%)
Banks finance their assets (such as loans, investments and their wider activities) with money that’s either:
- deposited with them by customers,
- and/or borrowed from others (mostly other banks) and then lent on to clients,
- or sourced from investors.
A large amount of borrowing from the markets to finance a bank’s activity is, by definition, riskier because markets are more volatile. Banks are both stronger and more values-based when more of the money they use to finance their activity comes from customers.
High levels of funding from customer’s deposits suggests a strong connection with clients and the real economy – both important elements of a values-based bank.
Triodos Bank funds all of its lending from customer’s deposits.
Assets Committed to the Real Economy to Total Assets 63.5%
(2014: 59.6%; 2013: 55.0%)
Values-based banks are strongly and directly connected to financing the real economy because that’s where they can have a positive impact on people’s lives and safeguard the environment. Triodos Bank only lends and invests in the real economy for this reason.
Real economy assets in a values-based bank should, therefore, be relatively high. By the same token financial economy assets should be relatively low because their impact on people’s lives is, at best, indirect.
Triodos Bank targets a ratio of loans (all of which are in the real economy) to deposits of 65 to 70% to make sure it always has enough money available (or liquidity) to support its clients in case of disruptions in the market. Where this excess liquidity is invested is subject to an ethical screen. In 2015 it was deposited with ‘neutral’ organisations, like Dutch municipalities.
Revenues from the Real Economy to Total Income 83.9%
(2014: 81.6%; 2013: 75.0%)
If a bank is earning more of its revenues from the real economy, it is both making more of a difference to people’s lives and is a more resilient institution.
Revenues from the financial economy tend to be more volatile, are more removed from most people’s lives, are highly unlikely to be sustainable and mean a bank is less resilient over the long term.
Assets Committed to the Triple Bottom Line to Total Assets 63.5%
(2014: 59.6%; 2013: 55.0%)
This figure provides the best indication of a bank’s commitment to sustainability. Triple Bottom line assets don’t just mean assets in the real economy. They specifically refer to assets focused on positive social, environmental and economic benefits.
Triodos Bank only finances these types of enterprises. As such, 100% of Triodos Bank’s real economy assets are triple bottom line assets.
Not all assets will be committed, however, because some liquidity needs to be available for the bank to support its clients in case of disruptions in the market such as repaying savings deposited with it, for example. This figure currently relates to assets on the balance sheet only.
The bank’s leadership and governance is focused on sustainability, and the diversity of its leaders reflect this culture.
A triple bottom line (People, Planet, and Prosperity) approach at the core of the organisation, determines everything it does, including its approach to leadership and governance.
All Triodos Bank co-workers, especially individuals in leadership positions, are recruited because of an affinity with the sustainable values that underpin the banks’ work, as well as their professional expertise. The organisation believes that more diverse management creates a healthier culture and will have a positive impact on its achievements.
The Supervisory Board and Board of SAAT members are appointed on the basis of the extent to which they combine professional expertise and a connection with the values that underpin the bank. If it’s necessary to prioritise one of these two elements, in the case of recruiting a Chair of the Supervisory Board for example, values take priority.
All Triodos Bank’s Boards aim to be well-diversified, with an adequate balance of nationalities, age, experience, background and gender.
The bank chooses not to be listed and a Board (the Board of SAAT) is entrusted with the bank’s share capital with a clear mandate to protect the mission, continuity and financial interests of investors to whom it issues depository receipts.
The performance of co-workers is measured on the extent to which the bank’s mission is delivered. Recruitment and performance monitoring of senior co-workers also has sustainability integrated in it.
Information about the Board’s composition, including the Supervisory Board’s skills and experience in a competency matrix, are published annually. Members of Triodos Bank’s Boards regularly meet Triodos Bank’s stakeholders in person.
The Supervisory Board’s objective is for no more than 70% of its seats to be held by either gender.
CEO and Managing Directors regularly speak as thought leaders on values-based banking at events and via extensive media coverage in their countries. In 2015, this included:
- The CEO was interviewed as part of a special webcast in Bristol to mark the GABV’s International Day of Values-Based Banking
- We had dialogue with European bodies, such as the EIB and European Commission, including responding to a consultation on Capital Markets Union to promote the opportunities for impact investment and values based banking
- Triodos Bank co-founded and the CEO Chairs the GABV
- Triodos Bank co-founded the Dutch Sustainable Finance Lab in 2010, an initiative of scientists from different disciplines focused on building a more sustainable and resilient banking sector, delivering various papers and events during 2014.
The Executive Board is comprised of one woman and two men.
From May 2015 there were five male and one female member of the Supervisory Board respectively, reflecting an international perspective with Dutch, German, British and Belgian representation and representing a breadth of expertise.
Board of SAAT has five members made up of three women and two men (a 60/40% ratio), with broad expertise. The Board has Dutch, British, Belgian, Spanish and US representation.
The Supervisory Board and Board of SAAT participates in a permanent education programme. In 2015 that included addressing the core values of Triodos Bank and their personal and professional relevance.
The bank is organised to support its mission focus
Triodos Bank’s organisational structure was developed from the start on the basis of its mission and sustainability considerations.
Triodos Bank’s business model is focused on delivering its mission via a resilient and entrepreneurial institution.
In addition to a Supervisory Board that monitors the bank’s business operations and advises the Executive Board to benefit its business Triodos Bank has a structure to safeguard its mission and the interests of its investors. As a result, all Triodos Bank's shares are held in trust by SAAT – the Foundation for the Administration of Triodos Bank Shares. SAAT then issues depository receipts for Triodos Bank shares to the public and to institutions. These depository receipts embody the economic aspects of the shares of Triodos Bank NV. In addition, it exercises the voting rights for the Triodos Bank NV shares. SAAT's Board of Management's voting decisions are guided by the Bank's ethical goals and mission, its business interests, and the interests of the depository receipt holders. Triodos Bank depository receipts are not listed on any stock exchange. Instead, it maintains an internal market.
Branches have national and sectoral expertise allowing them to build relationships and finance sustainable enterprise in the long-term interests of entrepreneurs and the sustainable sectors they operate in.
Triodos Investment Management, a 100% subsidiary of Triodos bank, has 17 Funds. These independent legal entities only serve sustainable sectors including arts and culture, inclusive finance, sustainable trade, food and agriculture, energy and climate, sustainable real estate and listed companies with above average sustainable performance.
Private Banking provides advice for wealthier individuals, family offices and organisations taking responsibility for the sustainable impact of their finance.
Triodos Bank’s organisational structure, and , encourages participation. A survey for depository receipt holders (the bank’s investors) was completed by 4,500 of 32,500 investors for example during the year. In addition to Annual General Meetings for Triodos Bank and its investment funds, events which enable customers to meet co-workers and clients financed by Triodos Bank took place throughout the year in all the countries where Triodos Bank is active. Triodos Bank organised a stakeholder engagement session, including representatives from all of its stakeholder groups, at its head office in The Netherlands as well as moderated interviews in Belgium and a survey distributed in all countries. The results were used as the basis for this report’s .
Triodos Bank continued to lend exclusively in sustainable sectors: Environment (37%, 2014: 44%, 2013: 49%), Social (24%, 2014: 26%, 2013: 29%) and Culture (14%, 2014: 14%, 2013: 15%). In addition an ‘Other’ category (25%) includes ethically screened loans to neutral organisations such as residential sustainable mortgages, municipalities and private loans.
In 2015, 389 organisations (2014: 403) received total donations of EUR 0.2 million (2014: EUR 0.3 million) in this way from the Triodos Foundation.
Products and Services
The bank’s core products and services are fair, transparent and directly contribute to its sustainability mission.
Triodos Bank’s core products and services reflect its mission. Products and services are only designed to link savers and investors with 100% sustainable enterprises. High quality service is considered consistent with these goals. All strategic and policy efforts, regardless of the specific discipline within the bank, reflect this focus.
Gift money is also viewed as an important part of the role money can play in improving quality of life through finance, and the Triodos Foundation is active in all the countries where Triodos Bank operates as a result.
Sustainability criteria is articulated in published positive and negative screening criteria documents, which determine lending and investment decisions. In practice, sustainability criteria inform the development of all new products as an explicit part of the innovation process. A number of new policies were developed during 2015, making the approach Triodos Bank has always taken more explicit.
All co-workers are responsible for ensuring that suppliers meet sustainability priorities. A vendor management department has oversight for larger supplier relationships to make sure that sustainability considerations are paramount.
Triodos Bank offers products including:
- Funds in sectors such as inclusive finance, sustainable real estate, culture, food and agriculture and energy allow individuals and institutions to invest in sustainable sectors
- Deposits that are only used to finance sustainable enterprise across all Triodos Bank’s branches
- Savers, in some countries, can donate part of their interest to a charity
- Customers have full transparency over the way their finance is mobilised via a website detailing all the bank’s loans in all the countries where it operates.
- The world’s first banking app to link customers with the sustainable impact of their money in The Netherlands (available in The Netherlands only currently)
- Sustainable mortgages that incentivise more environmentally sound homes by reducing interest on the basis of improved environmental performance. EUR 616 million lent in 2015 (2014: EUR 404 million)
- Growth in customer numbers to 607,000 customers (up by 15% on 2014).
The bank’s management systems are transparent, include sustainability criteria and exist to increase the institution’s positive impact.
Triodos Bank’s management systems, including risk evaluation and management, liquidity and asset/liability management and resource allocation are all designed to underpin Triodos Bank’s mission.
Triodos Bank’s activity is also bolstered by Business Principles which detail the bank’s mission, vision and values and what they mean in practice.
Triodos Bank has a positive approach to lending and investments, which is further supported by minimum standards, or negative criteria. Credit risk is assessed locally, in branches, and decisions on larger loans are shared with a central risk department who are responsible for ensuring the financial viability and sustainable impact of loans.
Triodos Bank’s lending strategy is built on identifying and understanding sustainable sectors, and close and meaningful relationships with its clients. Similarly, Triodos Investment Management’s strategic approach to Impact Investment takes the same 100% mission driven approach to investment. Details can be found using the links above.
In addition detailed processes are in place to ensure Triodos Bank's resources deliver its mission. An active and audited Environmental Management System (EMS) monitors and reduces the adverse environmental impact of all Triodos Bank’s activities. Policies in procurement, buildings infrastructure and products and services also monitor and improve performance.
The results of Triodos Bank’s management approach are in its impact. These are recorded in this and Know Where Your Money Goes, listing all the loans that Triodos Bank makes.
Triodos Bank is a climate neutral business. Published environmental impact data includes details of energy consumption, co-worker travel, commuting, paper usage, and CO2 emissions per FTE and by building. Triodos Bank purchases 100% renewable electricity and offsets 100% of its CO2 emissions. More details can be found in the and the .
- Flights – 8% decrease per fte (2014: 20% decrease)
- The use of video conferencing, connecting all the offices, was launched in 2013 to reduce co-workers air travel and usage was up by 13% in 2015.
- Office paper – 26% increased per full-time equivalent (FTE) co-worker. Printed paper, which accounts for 86% of all paper used (in marketing materials, for example) decreased by 22% per customer, while the number of customers grew by 15%.
Human Resources Tools
The bank’s sustainability mission is the starting point for its incentive, compensation, and performance structure.
Triodos Bank’s human resources approach is geared towards supporting new and existing co-workers to understand its mission, and goals equipping them to translate this sustainability focus into daily practice.
Co-workers’ connection with Triodos Bank’s values are enhanced through weekly meetings in all branches, and a thorough induction process focusing on Triodos Bank's mission, values and practice.
Various training modules and courses provide both an international and local focus, for example via the Triodos Academy, including a values seminar, management development programme and visionary leadership programme. In 2015, a special study programme was piloted in The Netherlands to provide an extended and in depth introduction programme for managers in leading positions at Triodos Bank’s Head Office. The programme explores Triodos Bank’s background, history and related topics. It will be evaluated with a view to rolling it out further in 2016.
Triodos Bank has a moderate remuneration policy without bonuses, to create a healthy and simple system.
Triodos Bank chooses not to offer bonus or share option schemes to either its Board members or co-workers. Financial incentives are not considered an appropriate way to motivate and reward co-workers. Sustainability is, by definition, the result of a combined effort of team members aimed at both the short and long term.
Active ‘Works Councils’ in The Netherlands, Belgium, Spain and a co-worker’s forum in the UK, provide an addition voice for co-workers at all levels.
- The ratio of the highest full-time salary to the median full-time salary in 2015 was 5.7 (2014: 5.6)
- Co-workers numbers increased by 10.2% in 2015, from 1,017 to 1,121
- The number of women in management positions is stable at 38% (2014: 40%)
- Absence in 2015 was 2.7% (2013: 2.6%) below a target of 3%
- 88 co-workers participated in the different programmes of the Triodos Academy (2014: 118)
- The annual Co-worker Conference took place in Bristol (115 attendees) under a theme of Greening ‘Capital’
- Co-workers participated in three Value Seminars and a management development programme during the year
- An equal award to all co-workers, regardless of their role, of EUR 500 was shared for their performance in 2015 as a positive alternative to a bonus structure.
The bank reports on the impact of what it does, not just its financial performance in an honest, transparent and accessible way.
Tracking and reporting financial and non-financial performance is a core part of the Triodos Bank’s ‘business as usual’.
Triodos Bank provides detailed and accessible reporting on both its financial and non-financial performance so its stakeholders have a true picture of its impact at different levels, from the perspective of customers and investors to regulators, partners and wider society. It also reports in order to understand and improve what it is doing well and where it can improve internally.
Triodos Bank intends to become the banking industry’s leading reporter of impact within five years, as an outcome of these efforts.
All the loans Triodos Bank makes are published in all the countries where it operates.
Its annual report details the sectors where Triodos Bank is active on its websites.
Non-financial impact is reported with a bias for story-telling. Data is used to support this qualitative information.
Evidence of impact is integrated with more conventional banking figures, such as capital ratios which reflect the resilience of the bank and its commitment to financing sustainable enterprise in the real economy.
A comprehensive impact manual was developed in 2015 providing co-workers with everything they need to know about what and how to report non-financial impact data. This is a living document that will develop further over time and in response to emerging issues in the wider world.
All non-financial impact data is related back to people reflecting Triodos Bank’s mission. This data was assured by external auditors in 2014 and 2015 to help improve the systems for gathering and reporting this information.
Triodos Bank and Triodos Investment Management integrates the reporting on its non-financial and financial performance, in this annual report in particular. It ensures that both types of data are externally audited.
Loans and investments (Social Responsible Investments in Triodos Sicav I Fund are excluded) are only made to sustainable businesses and increased by 20% in 2015 (2014: 12%; 2013: 8%). Readers should note that the 2014 and 2013 figures do not always include Triodos Investment Management data.
- By the end of 2014, Triodos Bank and its investment funds were financing 358 renewable energy projects across Europe (2014: 362, restated), contributing to a generating capacity of 2,100 MW of energy (2014: 2,100 MW) and 1.5 million tonnes of CO2 reduction during the year, while generating green energy equivalent to the electricity needs of 1 million European households (2014: 0.9 million, restated).
- Organics: organically managed land on the farms financed by Triodos Bank could produce the equivalent of over 33.6 million meals in 2015; enough food to provide a sustainable diet for 30,700 people during the year (2014: 27,700, restated).
- Triodos Bank and Triodos Investment Management also finance 24,000 hectares of nature and conservation land.
- In 2015 Triodos Bank and Triodos Investment Management financed directly, and via sustainable property, approximately 4,500 homes and apartments and about 310 commercial properties comprising approximately 280,000m2 of office and other commercial space.
- Care for the elderly: 25,000 individuals (2014: 20,000) used facilities offered at 341 elderly care homes (2014: 249).
- In 2015 Triodos Bank and Triodos Investment Management financed 316 community projects, and 169 social housing projects, which directly and indirectly provide accommodation for approximately 12,400 people.
- Triodos Investment Management’s specialized microfinance funds provided finance to 100 microfinance institutions (2014: 102) in 45 countries (2014: 44); these organisations reached approximately 10.2 million savers (2014: 8.2 million) and 15.5 million borrowing clients in 2015 (2014: 11 million).
- Culture: 14.3 million visitors enjoyed cultural events including films, theatres and museums across Europe (2014: 7.2 million, restated). Triodos Bank and Triodos Investment Management finance also helped approximately 3,000 artists and people active in the cultural sector as well as financing a number of organisations providing spaces for cultural activities such as workshops and music courses.
- Approximately 986,000 individuals benefited from the work of educational establishments financed by Triodos Bank in 2015 (2014: 822,000)
- Customer numbers increased by 15% to 607,000