Triodos Bank actively challenges companies to improve their social, environmental and corporate governance performance. Find out how we do it and what the results have been.

Pre-investment engagement

Many responsible investors make investment decisions based on external research or exclusion lists. Triodos however conducts its’ own in-depth assessments to determine whether a company meets the Triodos sustainability requirements. More and more companies are prepared to take immediate action if non-compliance with the Triodos standards is signalled. Recently several financial companies decided to sell their investments in companies that produce controversial arms. For example, insurance company Achmea blacklisted an arms producer in order to fulfil the sustainable investment criteria of the Triodos SRI funds. A number of other companies have also announced that they would develop or expand policies on issues such as animal testing, deforestation and human rights. As a result of Triodos dialogue with American SunOpta, the food producer recently developed its product safety policy to include a strict policy to minimize the use of animal testing, and has expanded its environmental principles to include the prevention of deforestation. 

Strength in numbers

Triodos is not the only investor to apply pressure about sustainability issues. We can often cooperate with other investors, which strengthens our impact. In the Netherlands, Triodos engages jointly with VBDO, the Dutch association of investors for sustainable development, and Eumedion, the Dutch platform for institutional investors in the field of corporate governance and sustainability. The topics of engagement vary but have included supply chain monitoring, remuneration and tax. Initiated by Triodos, Eumedion has stimulated Philips Electronics to review its sourcing of tin from the Indonesian islands of Bangka and Belitung. These islands suffer from the associated pollution and human rights abuse.

International cooperation

At an international level, Triodos is signatory to the United Nations Principles for Responsible Investment (UNPRI). This initiative brings together institutional investors allowing them to collectively raise sustainability concerns with multinational companies and governments. This has generated many successful outcomes. Examples include substantial improvements in sustainable sourcing of fish by leading food retailers such as Metro, and stimulating companies such as Adidas to sign the Accord on Fire and Building Safety in Bangladesh. Triodos is also one of the 722 institutional investor signatories to the Carbon Disclosure Project. The Carbon Disclosure Project is an independent organisation that distributes an annual questionnaire on behalf of its’ signatories to large global companies. The questionnaire is a call for standardised information about climate change, water and forest management, and encourages companies to take account of and be transparent about their environmental risks.

Ongoing commitment

Triodos sees that its’ engagement activities, be they either independent or as part of a collective, are generating real impact. Several studies confirm that engagement from investors works, and even more encouragingly, it also appears that the companies experience themselves that suggestions made by investors lead to improvements in profitability and efficiency. More and more companies will seek these improvements and that opens up more scope for growth in sustainability.

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.