Could you tell us a bit about Triodos Investment Management?
Triodos Investment Management is a globally active impact investor and a wholly-owned subsidiary of Triodos Bank NV. Through impact investing we act as a catalyst for sectors that are crucial for the transition to a more sustainable and humane world.
There are many investors out there who want to make their money work for lasting, positive change. Equally, we work with lots of innovative entrepreneurs and sustainable businesses having a positive impact. We work hard to connect these two groups.
We have 25 years’ experience in impact investing. Our investment teams have in-depth knowledge of key sectors such as Energy & Climate, Inclusive Finance, Sustainable Food & Agriculture, Arts & Culture, and Sustainable Real Estate. In addition to our direct impact investments in these areas, we also invest in listed companies with an above-average environmental, social and governance (ESG) performance. At the June 2018, our assets under management were EUR 4.2 billion.
What gets you out of bed in the morning?
Knowing that my role with Triodos Investment Management has a direct impact is a huge motivation, but sometimes it’s also helpful that my 3-year-old daughter acts as a very effective alarm clock! I’m also a GBR Age Group duathlete, so will often be up at the crack of dawn either cycling or running – I find that training is an amazing way to start the day and clears my mind allowing me to focus on work from the get-go.
What makes your funds distinctive?
Positive impact is embedded in everything we do, not just a mere add-on. You might say our funds differentiate on the level of focus and dedication. For instance, we have a team of eight researchers who solely investigate stock listed companies that might be eligible for our Socially Responsible Investment (SRI) proposition. We engage with companies during the selection process and continue to do so once they have been selected, encouraging them to keep improving their sustainability activities. It is important to remember even just small changes in big companies can make a big difference.
What are the positive social and environmental impacts of your funds and how do you measure them?
As an impact investor, we know that finance is transformational, so we direct money to where it can benefit people and the environment over the long-term. Accordingly, the impact we are interested in is the effect of our investment on society and the environment. We realise that our role and efforts in this complex web of change can only be captured in quantitative metrics to a limited extent. Achieving our goals means moving beyond providing capital and requires a strong intention and a holistic, long term approach. To fully communicate our vision and how we’re delivering it, we share stories that provide the essential context and background for our activities. For that purpose, we have developed impact reports that assess the impact of our investments in a transparent and meaningful way.
How do you engage with the companies in which you invest?
A major factor in Triodos’ SRI strategy is active engagement and dialogue with the companies we invest in. This activity raises awareness of sustainability, stimulates action within these enterprises, and ultimately creates lasting positive change. When Triodos Research considers a company for investment, we assess all aspects of a their sustainability performance. As with all engagement activities, Triodos Research uses the selection phase to push the sustainability agenda within companies. Last year, we had dialogue with a total of 176 companies on 270 occasions, as highlighted in our 2017 Engagement Report. We’re very proud that our response rate to these engagements was 88 per cent. For example, one area of concern for us is remuneration policies, especially C-suite compensation. As a result, we voted against 79 percent of AGM resolutions related to executive pay. We’ve seen positive results for this strategy.
What’s your biggest concern for the next year?
The urgency regarding the shortfall in attaining the Sustainable Development Goals (SDG). The SDGs can only be achieved if impact capital flows to the right sectors. We know that investors want this to happen: the annual Triodos Bank UK Impact Investing survey reveals that more than half of people would like their investments to support companies that contribute to a more positive society and sustainable environment, and yet 73% of investors say that they have never been offered ethical investment opportunities. This is a major disconnect – people want their investments to be making a positive difference. It’s imperative that as an industry we work to grow the assets being placed in Impact Investment so that the SDGs can be achieved. With the timeframe ever shrinking, this needs to be top of everyone’s agenda for 2019.
Why should an investor buy the Triodos funds in preference to other sustainable funds?
Ultimately, that decision sits with the individual investor – someone may have a broad range of reasons for investing. But an important indicator is the experience and track record of an investment manager. Triodos Investment Management has a strong track record in impact investing. It’s the only thing we do, and we’ve been doing it well for a long time. We’re fully compliant with the UNPRI (United Nations Principles for Responsible Investment) and fulfil the transparency code as set by the European Sustainable Investment Forum (EUROSIF). We’re a global leader in impact investment, as evidenced by being a founding member of the Global Impact Investing Network.
Is there a distinctive culture at Triodos and how is this reflected in the funds?
The culture within the entire Triodos Group is very distinctive, and unlike anywhere I have worked previously. It’s amazing to work within an organisation with so many genuinely like-minded people whose values are so closely aligned. Our investment philosophy is very closely matched with Triodos Bank’s mission of using money to bring about positive change. As such, our funds, whether direct Impact Investment funds or SRI funds made up of traded shares, only support companies or projects that deliver social or environmental benefits.
More information on the Triodos SRI funds available at: www.triodos.co.uk/SRI
The Triodos Socially Responsible Investment (SRI) funds and the Triodos Ethical Stocks & Shares ISA are offered to UK residents who are aged 18 years or over. Your capital is at risk as the value of your investment can go down as well as up and you may get back less than originally invested. Income is variable and not guaranteed.
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