How does Triodos define impact, and how do you evidence that you’re making an impact?
About six years ago, we started looking at the biggest trends in society – for example, demographic changes, climate change, loss of biodiversity and developments in the tech industry – and what challenges those trends may bring. From these, we identified seven investable transition themes that are needed for a future that benefits both planet and society.
Each bond instrument must contribute to one or more of these transition themes to generate positive impact, so that is an important starting point for us in terms of how we define impact. But they must also meet our minimum standards, which provide a safeguard to make sure investments with a social benefit do not jeopardise the environment and the other way around. For example, if there is a company that produces windmills but is also susceptible to corruption, then we would not invest in it.
See also: – Biodiversity, social impact and innovation: A 2024 ESG wishlist
In terms of measurement, we assess each investment based on how they contribute to the UN’s Sustainable Development Goals, focusing mainly on the products and services of a company.
How do you support companies on their transition journey?
We are quite a small investor in the grand scheme of things, so we don’t engage with power, we engage on content. Engagement is something anybody can do, as long as they ask meaningful questions, but what is helpful for us is that we are a long-term investor with a concentrated portfolio, which means we can build relationships with these companies over time and show consistency in what our objectives are.
Read the full article in ESG Clarity’s November 2023 digital magazine.
