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Economy

Triodos head of SRI: invest sustainably to ‘change the world’

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Do you know what your money is doing and is it doing good? Alex Blackburne speaks with Eric Holterhues from Triodos Investment Management about how sustainable investment can provide an answer to those crucial questions.

In 1980, a bank was formed that would go on to become a European leader in sustainable finance. Triodos Bank was set up with transparency at its heart and a very clear mission to show customers how their returns were being made.

It invests across three defined themes – the environment, society and culture – and has retail banking operations in its native Netherlands, as well as Belgium, Spain, France, Germany and the UK.

While its place as a leader in the European sustainable banking arena is well-documented, readers may be less aware of its investment arm. But it has significant weight in this area too, with 17 investment funds covering both retail and institutional investors.

Eric Holterhues is head of socially responsible investing (SRI) at Triodos Investment Management in the Netherlands. Speaking to Blue & Green Tomorrow, he recalls how a 2007 investigation that revealed a Dutch cancer foundation was, unknowingly, investing in tobacco companies had brought the need for sustainable and ethical investment into sharp focus.

Holterhues says that in the beginning, Triodos was simply a bank that used their clients’ savings to provide loans to smaller, non-listed companies – those that didn’t appear on stock exchanges. But as demand grew, it became clear that customers also wanted impact by investing in non- listed and listed companies via the investment funds provided by Triodos.

Triodos decided to start with impact investing – and the results have been impressive. Its investment arm grew 27% in 2013, with €2.5 billion (£2.07 billion) in assets under management. Holterhues says he has seen “massive traction” in the take-up of the sustainable funds on offer. These are either impact investing funds, which invest in non-listed companies,  or SRI funds, which invest in stock-listed companies.

Interface, the carpet maufacturer, is aiming to be environmentally neutral by 2020

The investment team managing the SRI funds can only invest in companies from a defined sustainability universe. It can select companies that derive more than 50% of their annual income from a sustainable product or service – such as renewable energy providers. It also looks at best-in-class firms – those who may derive less than 50% from a sustainable product or service, but are going to great lengths to be more sustainable.

Holterhues picks out carpet manufacturer Interface as a good example. It has a strategy called Interface Mission Zero and a goal to be environmentally neutral by 2020.

There is a lot of pollution in our seas, especially nylon nets that are put there by fishermen”, Holterhues explains.

Interface thought that maybe they could change this, so it is now actually paying fishermen to catch the nylon nets, which it then makes carpets out of it.”

The advantage of working with bigger firms like Interface (Dutch technology company Philips is another example) is the sheer potential for sustainable change. Because of the size of listed firms, even small steps forward can be ground-breaking.

Holterhues says, “We work closely with sustainability departments at these companies and they are actually very glad that we ask questions about their approach to sustainability. They say it gives them an opportunity to have an increasing conversation within their company. The other thing is that we also engage with these companies through their annual meetings and talk about their sustainability performances.”

Triodos’ SRI strategy seems to be paying off, too. One of its two UK-based SRI funds is benchmarked against the MSCI World Index. Comparing the two over the long run, the Triodos fund has performed better. Holterhues backs this up by pointing towards a 2012 study by Deutsche Bank, which said companies that factor sustainability into their investments perform better on the stock market and offer investors less risk.

Despite this, there is still some trepidation towards sustainable investment – particularly around risk and volatility.

I think people are unfamiliar about sustainability and there’s still this myth of it being about sustainability and not about performance”, Holterhues says.

But Triodos Bank grows around 20 to 25% every year; our SRI investment funds grew by 33% in the last year. It’s ridiculous to say that sustainability is not worthwhile, because otherwise we wouldn’t have been here since 1980.”

While the social, environmental or cultural argument is compelling, Triodos is firmly of the opinion that people want to know – at the most basic level – what their money is doing. It comes back to the reason the bank was set up in the first place all those years ago.

Holterhues concludes, “People find that very important. I also think people have a responsibility in investing. It’s not about the world changing because of others; you can change the world yourself by investing.”

Further reading:

Triodos invests in Cambridgeshire wind farm to boost renewable energy portfolio

Sustainable bank Triodos sees 20% growth in assets in 2013

Triodos expands renewable portfolio with potato packaging plant project

Triodos survey says 3m may consider social investment in next year

The Guide to Sustainable Investment 2014

Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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