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Engagement for emission reduction

Triodos’ Bank’s As One to Zero commitment

In November 2021, we set a very ambitious target

The target year 2035 is one of the earliest in the industry

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Triodos Bank has set the ambition to be net zero by 2035 in line with limiting global warming to 1.5˚C degrees

In scope: our entire portfolio, including all

our listed and non-listed funds’ investments

As one: Decarbonization must happen in an equitable, inclusive way

We have been focused on mitigating climate change since 1980

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1986

1989

1980

1990

1993-2006

2012

2016

2020

2018

2021

First wind turbines financed

First bank to finance wind turbines in the Netherlands (1986) and in Belgium (1989).

International growth

Offers green finance in 5 European countries

First green mortgage

Interest linked to energy label

First green fund

Biogrond Beleggingsfonds: first green fund in Europe

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PCAF

Founding member of the Partnership Carbon Accounting Financials

Sector commitment to climate goals

Supported by Triodos Bank in the Netherlands, Spain and Germany.

# 1 Renewable Energy Bank

Most active bank, globally, based on # clean energy deals for the 5^th consecutive year.

Net Zero 2035 Commitment to be carbon neutral (full scope) by 2035

First biobased mortgage

in the Netherlands

2022

Triodos Bank issued its first bond under the Green Bond Framework.

Net zero by 2035

Investing in nature to sequester carbon

Reducing emissions with all our clients and investees

What does it mean?

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Financed emissions are measured following the PCAF method |

100% lending & funds’ investment activities (scope 1-2 of clients) are covered |

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Figures relative to future CO₂e emissions are based upon plausible projections set as on date of report

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Improving insights into emissions

‘Tough’ choices…

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When we set this ambition

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• We assumed a ‘new role’ towards clients and investees
• We only had estimates for most emissions
• We committed to growing into a new market
• And we had no clear strategy…. yet

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BUT

• Board, management and staff were committed
• Shareholders are with Triodos for long-term impact and expect us to be ambitious on impact
• Stakeholders are generally impact-minded

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Programme set-up

• Organisation-wide project team
• 15 colleagues
• Across countries
• Across functions
• Next to ‘day job’
• Split into workstreams

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• We spent 2022 exclusively on making a strategy, getting systems ready, and coordinating this group-wide

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Our actions in 2023

1 Reduction engagement

• Investing in nature

3 Improving Products

To stimulate a just transition, engagement with clients and investees is the key instrument. All engagement we do focuses on reducing actual emissions. We want to be there every step of the way, from raising awareness about the importance of reducing emissions and gathering insight into current emissions, to financing reduction measures.

We need to strengthen the natural systems that life depends on. A side-benefit of nature regeneration is that it goes hand-in-hand with carbon sequestration, which is the capturing of carbon dioxide in biomass. Across our financial instruments, we want to enable investments in holistic, nature-based solutions. We have appointed someone full-time to coordinate learnings, written an approach to these investments and have a pilot envelope for investment.

To support and incentivize emission reduction as much as possible, we aim to review and improve our products continuously. We will take our clients and investees needs as a starting point, building on the lessons learned through our engagement efforts.

How we plan to achieve our ambitious goal

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Reduction engagement

• 2023 KPI’s approved by upper management
• # of engagements
• # of reduction actions
• Data improvement
• Our belief: we don’t need perfect data to start engagement and impact
• Even in personal life…

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1. Share whether you use electricity from the grid, gas, fuel or wood at home

2. Share one action you have taken to reduce greenhouse gas emissions at home in 2022

3. Share how much greenhouse gas emissions happen exactly at your house

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Reduction engagement - client example

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• This client owner and operator of two care elderly homes and his group offering a whole range of inpatient and outpatient services (e.g. day care; dementia care; palliative care; service living; assisted living apartments)
• We finance the two care homes

Company Description

Carbon footprint & data quality

Engagement

Action

• The two care homes and the head office are heated with gas and electricity supply is based on the German electricity mix.
• The fleet for outpatient care consists of cars with combustion engines
• We have not yet received actual consumption data for electricity and heat from the customer

• We are in regular and close exchange with the customer and have already discussed the topics of energy self-sufficiency and reducing his carbon footprint last year.

• The client decided to convert its fleet to electric cars. The electricity for the charging stations will come from a new photovoltaic system on top of the head office.
• TBDE financed the project and used the InvestEU guarantee
• We have received the actual electricity and heat consumption data for all properties to fill our new CAALA tool and thus improveour advice and the data quality.

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Investing in nature

• Some local experience within banking branches
• Finalizing ‘approach’ document across group
• Setting targets and coordinating learning through nature-based solutions specialist

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Flood Protection

Triodos Bank supported an innovative Natural Flood Management project that will reduce flood risk to communities in Lancashire (UK). This project is the first to use a new green investment financial model, which will see multiple beneficiary organisations repay the upfront investment through the sale of ecosystem services.

The money raised in the project will be used to deliver over 1,000 highly targeted Natural Flood Management measures over nine years:

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• Wetland creation - temporarily storing water: this could include leaky dams, earth bunds, bunded hedgerows, peatland restoration, floodplain reconnection etc.

• Grassland creation - increasing catchment roughness to help slow overland flow. This could include land use change (intensive grassland to rough pasture), riparian buffer strips etc.
• Woodland Creation - to intercept and transpire water. This could include large native woodland blocks or riparian tree planting.

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Improving products

Energylabel-related pricing

Energy-savings advice

Energy-savings loan

Bio-based Mortgage

Sustainable Mortgage Proposition as a model

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Improving our engagement for 2024

Selecting new business consciously

Emission targets?

Tracking our efforts

Tooling for advising clients

Incentives for clients

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Strategic questions

• What new clients do we take on?
• Do we exclude sectors or companies if they do not reduce emissions?
• Do we expect the same results from all types of investees?
• Do we give business units a ‘carbon budget’?

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Questions to you

• What would you recommend us?
• What would you do different?

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Partners and commitments in our climate engagement

Founding member of

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We keep working together to strengthen the movement towards net zero

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Founding signatory of

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Member of

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Net-Zero Banking Alliance

Industry-led, UN-convened

Signatory of

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