Triodos Bank believes that growth is more than what a financial figure communicates. Yet it is encouraging to note that the financial figures for Socially Responsible Investment are growing. 22% of total global assets under management (USD 13.6 trillion) are currently influenced by some kind of responsible investment strategy. And the market continues to grow.

European SRI market growth

The European SRI Study 2012 conducted by socially responsible investment (SRI) think-tank Eurosif, describes that SRI strategies are outgrowing the traditional investment market. Investors are now more willing to take non-financial factors into account in their investment decisions. The differences vary considerably per European country. For example in the Netherlands, the SRI market grew by more than 25%.

The main drivers for growth

Investors have two good reasons to invest in SRI funds or services. Firstly, the financial return. A growing number of international studies, amongst which the October 2013 study SRI, Beyond Integration by Societé Generale and Sustainalytics, show that SRI portfolios outperform mainstream portfolios. Secondly, retail investors increasingly seek social return, which Socially Responsible Investments can deliver. Triodos Sustainability Research selects companies along a number of indicators. When we compare the performance of stock listed companies we select for the Triodos Sustainable Investment Universe with the performance of all large listed companies, we note that our portfolio outperforms on Environmental, Social and Governance indicators by respectively 25, 15 and 19 percent. This shows that the companies we select for sustainable investment deliver a relatively higher positive contribution to quality of life. SRI funds influence the behaviour of companies that seek investments through the stock-exchange positively too, especially now that interest in these funds is increasing.

SRI growth visible at Triodos

The four Triodos SRI funds – Triodos Sustainable Equity Fund, Triodos Sustainable Mixed Fund, Triodos Sustainable Bond Fund and Triodos Sustainable Pioneer Fund – grew by more than 30% to EUR 670 million in 2013. This growth is partly due to an increase of the share price, and to a larger extent due to the growth in outstanding shares. This strong growth can also be found in the Triodos Bank Private Banking services, where the assets under management have grown from EUR 80 million in 2005 to EUR 900 million in 2013.

Future expectations

There is optimism in the SRI market and there is no sign that growth is slowing down. Triodos predicts that institutional investors and private bankers will continue to demand socially responsible investment. In fact, we foresee a future where the sustainability performance of companies will become a natural part of the investment decision for fund managers.

Note: The issues explored in this article are relevant for sustainable investments on the stock market. Triodos Bank believes that our socially responsible investments are a powerful means of promoting our values and working for greater sustainability, while enabling us to offer a complete range of attractive investment options to customers who choose to invest on the stock market.