Triodos Bank, a frontrunner in sustainable finance for more than 40 years – wants to be net-zero as early as possible, at the latest by 2035. Our ambition is that the greenhouse gas emissions of all Triodos Bank’s loans and funds’ investments will be greatly reduced, using a science-based targets approach. The remaining emissions will be balanced or ‘inset’ by investing considerably in nature projects that remove greenhouse gases from the air. With this target, Triodos Bank’s portfolio of loans and funds’ investments will be aligned with a maximum global temperature rise of 1.5 degrees Celsius.
As one to zero
Jeroen Rijpkema, Chief Executive Officer at Triodos Bank: “The climate emergency is increasingly affecting people’s lives and impacting nature: wildfires, heat waves, heavy flooding, the loss of biodiversity. Concrete proof of the need to urgently reduce greenhouse gas emissions, well before 2050. We are in the decisive decade. That is why Triodos Bank has set the high ambition to be net zero by 2035.”
Bevis Watts, Chief Executive of Triodos Bank UK*: “In setting out a target by 2035 we are challenging the financial sector. As a bank that has led the way on carbon disclosure and already has a low carbon emitting portfolio – we already know our starting point and can see the realities of how difficult achieving net zero will be. We need to see much faster action by the financial sector with disclosure of current emissions, targets and transition plans verified by the Science Based Targets Initiative and regulation mandating this. The financial sector has to lead the economic transition to net zero and ensure everyone is included in a just transition.”
In formulating its target, Triodos Bank has adopted a holistic approach in support of its mission to create positive impact on people and nature. Triodos Bank wants to reduce emissions, whilst also considering for instance biodiversity and social inclusion of all people. It wants to intensify its collaboration with clients, customers and other stakeholders to reach this challenging but realistic target. Jeroen Rijpkema: “We can only get to zero as one.”
How Triodos Bank wants to reach net zero
In achieving its target Triodos Bank will build upon the foundations of financing a sustainable economy since its foundation in 1980. The bank aims for a significant reduction in business lending emissions even as it grows in size.
- With residential mortgages forming 21% of its portfolio Triodos Bank wants to support mortgage customers to make their homes more energy efficient and net zero. In addition, it wants to promote the use of bio-based materials in new construction and renovation.
- With a great heritage of supporting clean energy, Triodos Bank will finance new green energy infrastructure – generation, storage, green jobs and a path to a fully sustainable renewable energy sector.
- Triodos wants all its investments (listed, private debt and equity) to reduce carbon intensity to achieve net-zero in 2035.
- A substantial amount of the future portfolio of Triodos Bank will consist of new natural capital, nature-focused finance and regenerative organic agriculture, sequestering carbon and supporting biodiversity.
The bank has analysed its loan portfolio by sector to look at how decarbonisation can be achieved. In the coming months, Triodos Bank will continue to work on the roadmap for reaching its target of net zero in 2035. Triodos Bank will work on getting its plans reviewed by its external auditor; it will submit its targets for validation by the Science Based Targets initiative. Triodos Bank will review its ambition in 2025 to validate its approach and make any necessary changes to its plans if needed.
Jacco Minnaar, Chief Commercial Officer at Triodos Bank: “In 2015, on the train to Paris Triodos Bank co-founded PCAF, now the main framework for financial institutions to disclose their carbon footprint. We now need ambitious targets and faster action for the ultimate goal: a net zero economy. Even for a bank built with sustainability at its core and boasting an already low carbon intensity portfolio this is not an easy task. Our target will serve as inspiration for our co-workers and all stakeholders that work with us to act faster and develop more robust plans as to how we, and ultimately the financial industry as a whole, will achieve net zero ambitions.”
Triodos Bank’s target setting is informed by a full understanding of current carbon impacts of all loans and funds’ investments. To ensure a robust methodology, Triodos Bank supported the development of the Partnership for Carbon Accounting Financials (PCAF) which has now become a leading standard for financial institutions across the world.
Triodos Bank’s history of climate action
Triodos Bank has always been committed to improving environmental impacts and outcomes using a positive approach for both its banking services as well as its investment management activities. In 2020 alone, Triodos Bank and its investment funds financed renewable energy projects and energy saving projects that avoided the equivalent emissions of over 5.7 billion kilometres travelled by car.
Triodos Bank also finances forestry and nature development projects. This resulted in the sequestration of approximately 14 ktonne CO2 eq., equal to at least 316,000 mature trees and enough to compensate the emissions from the farming sector financed by Triodos Bank. Minimum standards logically follow from the bank’s positive approach, leading to exclusions of areas such as fossil fuels or environmentally destructive industries and businesses.
Triodos Bank was one of the first banks in the world to produce an environmental report and continues to this day to limit its own environmental footprint and the emissions generated by the bank itself from energy consumption and business travel. It registers its footprint in a CO2 management system and compensate for it fully in Gold Standard carbon-offset projects.