This month, world leaders have gathered at the COP26 conference in Glasgow to discuss what steps can and must be taken to reduce greenhouse gas emissions worldwide. Coinciding with this, Triodos Bank has announced an ambitious target of reaching net zero emissions as early as possible, and at the latest by 2035.
Our goal is to significantly reduce greenhouse gas emissions from all of our loans and investments, using a science-based targets approach. The remaining emissions will be balanced or ‘inset’ by investing in nature-based projects that remove greenhouse gases from the air. With this target, Triodos Bank’s portfolio of loans and investments will be aligned with a maximum global temperature rise of 1.5 degrees Celsius.
As one to zero
In formulating our target, we have adopted a holistic approach which supports our mission to create positive impact on people and nature. We want to reduce emissions, whilst also considering biodiversity and social inclusion of all people. We will do this by collaborating with clients, customers and other stakeholders to help ensure the transition is fair and inclusive. By setting a target for 2035, we show our appreciation for the urgency of the situation in which we find ourselves. However, by reaching out to all our stakeholders, we acknowledge that this is a collective challenge – a race that we can only ‘win’ if we all work together.
“In setting out a target by 2035 we are challenging the financial sector,” explains Bevis Watts, chief executive of Triodos Bank UK. “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.”
How we’re going to get there
Our strategy for balancing emissions throughout our entire business ecosystem lies across four pillars.
We will make the places we all live and work in, work for us
We will aim for a significant reduction in emissions from our business lending, primarily property-based emissions, and in countries where we offer mortgages we will support mortgage customers to make their homes more energy efficient and net zero.
We will grow our natural resources
A substantial amount of our future portfolio will consist of new natural capital finance and regenerative organic agriculture – sequestering carbon and supporting biodiversity.
We will invest in green power
We’re going to finance new green energy infrastructure – generation, storage, green jobs and a path to a fully sustainable renewable energy sector.
We will move as a movement
We aim for all our investments (listed and private debt and equity) to reduce in carbon intensity so that we can be net zero by 2035. We will build a movement of likeminded people. We want an inclusive transition; it is about getting the real change in society.
Case study: University of Winchester
Founded in 1840, the University of Winchester is a leading university in the UK offering study on a wide range of subjects – from arts and humanities, to business and education. It is home to around 7,800 undergraduate and postgraduate students and founded on the core values of compassion, spirituality and that individuals matter. A £30m loan from Triodos Bank was used to complete a landmark new building development at the West Downs Quarter campus, with a BREEAM Excellent sustainability rating and one of the first university projects in the UK to pursue WELL Certification. The building also brings a range of social benefits for both students and local residents, with a multi-use space that features an art gallery, zero waste shop and vegan café.
The bank has analysed its loan portfolio by sector to look at how decarbonisation can be achieved. In the coming months, we will continue to work on the roadmap for reaching our target of net zero in 2035. We will work on getting its plans reviewed by its external auditor; and submit targets for validation by the Science Based Targets initiative.
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 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.
The next steps in our path to net zero involve reaching out to our wider network, and bringing our community along with us on the journey.
Bevis Watts adds: “To make the planet whole again, we have to look at the whole picture. It takes more than just cutting carbon. We can’t just reduce emissions, only to find out that we’ve used all our natural resources to get there. We can’t stop using fossil fuels, only to find out we’ve exploited people to get there. We need holistic solutions. An approach that works for all living species. Where renewable energy, massive investments in regenerating nature and a fully sustainable built environment go hand in hand.”
Interested in finding out more?
More details of our approach to reaching net zero greenhouse gas emissions can be found here.