For a second year we have collaborated with Navigant, a leading energy and climate management consultancy, to assess Triodos Bank’s carbon emissions. We have increased the assets assessed using the PCAF methodology, from around 68% of our loans and direct funds’ investments in 2018 to all of them in 2019. However, a consequence of including all sectors is an overall decline in data quality. Nevertheless, some sectors’ data quality levels have increased from year to year.

For readers with a more detailed interest, a separate methodology report on how the PCAF standard was applied to this portfolio is available on our website. We have also scored the quality of the carbon footprint data of our lending and funds' investment sectors. 

The data quality is scored from 1 to 5 per sector:

Data quality from 1 to 5 per sector (graphic)

We calculated the following carbon footprint applying the PCAF methodology to our covered portfolio. We also applied an attribution approach. This means that we calculated the emissions as they relate to the proportion of our finance in a project or customers’ balance sheet. GHG emissions are measured in tonnes CO2 eq. and categorised by:

  • Generated emissions: GHG emissions arising from various economic activities. This refers to carbon that is emitted into the atmosphere.
  • Avoided emissions: GHG emissions that are avoided from fossil-fuel power generation due to renewable energy. While this is very important, avoided emissions do not remove existing carbon from the atmosphere. It’s important to note that our avoided emissions figures will, eventually, start to decline even as the amount of energy generated by the renewable energy projects we finance increases. That’s because the wider energy system is becoming less carbon intensive, overall. Energy from fossil fuel sources is, and will, continue to decline and energy from renewable sources is increasing, creating a more sustainable energy system.
  • Sequestered, or absorbed, emissions: GHG emissions stored in carbon sinks, such as trees, plants and soil etc. This refers to the actual removal of carbon from the atmosphere.

The following graph shows the greenhouse gas emissions that can be attributed to Triodos’ loans and direct fund investments, using the PCAF methodology, in 2019. These results clearly indicate that financing a sustainable economy for many years has resulted in substantial avoided emissions relative to our generated and sequestered emissions.

Our actual emissions provide a baseline, which means we can start to improve and monitor our progress in working with our customers to reduce their emissions. The level of sequestered emissions provides insight on how we can reduce our emissions in the future, effectively ‘cancelling out’ our actual emissions.

Climate impact of our loans & investments

in ktonne CO2 eq. 2019

Climate impact of our loans & investments (bar chart)

This year we have presented avoided emissions beneath actual emissions, unlike in 2018. We consider this an improvement to more accurately describe the influence of renewable energy generation, which helps to reduce the carbon intensity of the energy system. This way of presenting this information also helps to emphasise that while avoided emissions play a very positive role, they do not compensate for actual emissions. We want to play a positive part in contributing to discussions in the future about how best to present carbon emissions data.

The graph that follows shows the intensity of Triodos Bank’s greenhouse gas emissions, per billion euro lent and invested using the PCAF methodology. It provides stakeholders with an indication of the impact of our finance on generated, sequestered and avoided emissions. This is important information, but it should be remembered that limiting, and then reducing, absolute greenhouse gas emissions is what’s required to enable us to live within the planet’s environmental limits.

Climate impact in emission intensity 2019

in ktonne CO2 eq./billion EUR financed

Climate impact in emission intensity 2019 (bar chart)

As one of the first banks to report in this way, we actively collaborate with our partners to encourage others to do the same. Because ultimately stakeholders should be able to compare the GHG emissions of one bank with another.

We are working on the development of science-based targets. These targets will describe the trajectory we need to follow to make sure that our activities and associated emissions contribute to, at most, a 1.5 degree global increase in temperature. Clearly that also requires other financial institutions to do the same if we are to play our part as an industry in keeping the global increase in temperature within safe limits.

The next table provides more detail about which sectors we finance and details our absolute, avoided and GHG intensity emissions.

The first column describes the different sectors that have been assessed using the PCAF methodology and highlights whether they are responsible for generated, sequestered or avoided emissions. The second column further details the total emissions from each of these sectors. The third details the intensity of the emissions in relation to each sector, as we describe in the graph above. The last column describes levels of data quality, as defined in the table below, per sector financed.

2019 – Climate impact of our loans and funds’ investments

1

Avoided emissions should not be summarized because their absolute emission is zero.

Impact sector

Total outstanding loans & funds investments covered (in 1,000 EUR)

Attributed emissions
(in ktonne CO2 eq.)

Emission intensity (in ktonne CO2 eq./billion EUR)

Data quality score
high quality = 1
low quality = 5

Generated emissions

 

 

 

 

Environment:

 

 

 

 

 

Organic farming

 

327,548

15

46

2.9

Sustainable property

 

1,046,640

34

32

3.1

Residential mortgages

 

2,192,019

35

16

2.3

Environmental – other

 

239,128

10

42

5.0

Social:

 

 

 

 

 

Care for the elderly

 

652,871

24

37

3.8

Healthcare – other

 

419,541

16

38

5.0

Social housing

 

535,901

22

41

4.0

Inclusive finance & development

 

838,140

9

11

5.0

Social other & municipalities

 

677,377

15

22

5.0

Culture:

 

 

 

 

 

Arts and culture

 

458,911

33

72

4.7

Education

 

287,909

7

24

4.2

Culture – other

 

255,683

16

63

5.0

IEB funds

 

1,883,105

53

28

2.3

 

 

9,814,773

289

29

3.4

 

 

 

 

 

 

Sequestered emissions

 

 

 

 

Nature development & Forestry

 

84,769

-24

-283

2.9

 

 

 

 

 

 

Net emissions

 

9,899,542

265

27

3.4

 

 

 

 

 

 

Avoided emissions

 

 

 

 

Renewable energy

 

2,391,993

962

402

1.6

 

 

 

 

 

 

Total1

 

12,291,535

 

 

3.1

2018 – Climate impact of our loans and funds’ investments

1

Avoided emissions should not be summarised because their absolute emission is zero.

Impact sector

Total outstanding loans & funds investments covered (in 1,000 EUR)

Attributed emissions
(in ktonne CO2 eq.)

Emission intensity (in ktonne CO2 eq./billion EUR)

Data quality score
high quality = 1
low quality = 5

Generated emissions

 

 

 

 

Environment:

 

 

 

 

 

Organic farming

 

290,919

27

93

3.2

Sustainable property

 

903,361

22

24

3.4

Residential mortgages

 

1,679,827

30

18

4.0

Social:

 

 

 

 

 

Care for the elderly

 

578,298

25

43

4.0

Social housing

 

455,639

19

42

4.0

SRI funds

 

1,073,196

53

49

2.0

 

 

4,981,240

176

35

3.4

Sequestered emissions

 

 

 

 

Nature development & Forestry

 

69,536

–24

–345

3.1

 

 

 

 

 

 

Net emissions

 

5,050,776

152

30

3.4

 

 

 

 

 

 

Avoided emissions

 

 

 

 

Renewable energy

 

2,250,801

–985

–438

1.8

 

 

 

 

 

 

Total1

 

7,301,577

 

 

2.9

Coverage rate

 

68%

 

 

 

In 2019 Triodos Bank and its investment funds financed renewable energy projects and energy saving projects that avoided over 962 ktonne of CO2 eq. emissions compared to fossil-fuel power generation, equal to the avoidance of emissions of over 5.9 billion kilometres travelled by car.

Next to investing in renewable energy, Triodos Bank also financed forestry and nature development projects. This resulted in the sequestration of approximately 24 ktonne CO2 eq., equal to at least 361,000 mature trees.

The emissions that were generated by the other loans and investments covered in this climate impact measurement are approximately 289 ktonne CO2 eq. The increase of generated emissions compared with last year is mainly due to including all sectors in this year’s assessment.

Extending the scope of our overall assessment to 100% resulted in a lower overall data quality score. However, we were able to improve the data quality in some sectors. For example, using actual energy consumption data for the Dutch part of our mortgage portfolio, improved the data quality of the mortgage portfolio from a score of 4, to 2.3. This follows a collaboration with other financial institutions in the Dutch chapter of PCAF and the Dutch Central Bureau of Statistics.

We will continue to report the climate impact of our own operations and of our loans and funds’ investments in the future. We hope to further improve the quality of this data, the methodology that underpins it and, therefore, the accuracy and relevance of our reporting.

962

Avoided emissions
in kilotonnes of CO2