These ideas raise questions about the kind of bank Triodos wants to be. Do we help businesses that want to become more sustainable, and not just reward the ones that already are? New Resource Bank in the US, in which Triodos Bank is a cornerstone investor, supports enterprises that want to become more sustainable but don’t know how, for example. It has developed a very practical ‘sustainability toolkit’, designed to move conventional businesses to a more sustainable future.
All our efforts aim to deliver our mission to improve people’s quality of life. To do this means continually increasing our impact. So in 2010 we focused on lending more of the savings and investments that have been entrusted to the bank in ever-larger volumes. This led to a marked increase in our impact, as lending in particular grew in all our branches. However, we need to get the balance right between savings and loans, ensuring a healthy balance between the deposits we attract and the proportion of them that we lend out.
This is particularly important in a period where we have successfully attracted high volumes of deposits in some countries. We are fortunate that we can take advantage of a European network where a surplus of deposits in one country can be used productively in another. But we also want to finance more projects than before, including the breakthrough sustainable businesses of the future. We actively manage this process to make sure that we continue to grow in a balanced way.
We know that our impact is of most interest to our stakeholders, from customers and depository receipt holders to our co-workers. So this year’s annual report focuses more closely on the themes that run as threads through all our work, regardless of where in the world they happen. While why and how we do what we do is of fundamental importance, what we do also matters a great deal. We want to make this more visible.
For instance, Triodos Bank’s work in energy and climate allows us to play our part in dealing with the challenge of climate change, energy security and access to energy in the developing world. Given existing and emerging technologies, and the availability of capital despite the financial downturn, transitioning towards a low carbon economy is possible. But it requires a concerted effort from many organisations, businesses, producers and consumers. The financial sector is one and should play a central role. Investment decisions must not be guided anymore by short-term financial interests. Instead, they should combine long-term financial, environmental and social considerations. For us that means financing sustainable projects through our energy and climate funds, and lending across all our European branches.
In 2010, that meant our combined lending and investments in renewable energy projects generated 4,136,000 MWh of clean green energy, or enough energy to meet the energy needs of the equivalent of 1,181,600 European households, avoiding 1,624,373 tonnes of CO2 emissions.
We are also active in other areas such as arts and culture because personal creative expression is a fundamental human need, and can create and safeguard human dignity.
Art can express things that can’t be put into words. There are many powerful examples of people who live in difficult circumstances, whose freedom is restricted for instance, finding other forms of self-expression. On a personal level, art can inspire and encourage change. At the level of society as a whole, art can bridge divisions and establish links between individuals and groups.
A lively cultural sector cannot be fully dependent on government subsidies but must find a range of forms of finance. Triodos Bank wants to be a catalyst for developing cultural entrepreneurship. We want to invest in artists, institutions and cultural entrepreneurs that build bridges with society and that are socially relevant. And we want this work to reach people and influence their quality of life. The number of people who experience arts and culture is not the only measure of its value but, it says something about its impact. In 2010 3.3 million people attended events and cultural events and venues financed by Triodos Bank.
We also work actively and extensively on the world stage and, since 1994, in microfinance in particular. Microfinance is the provision of financial services to low-income households and small and medium-sized enterprises in developing countries. Access to these services has a fundamental impact on the lives of millions of people.
It enables them to build their assets gradually, develop microenterprises, enhance their income earning capacity, and provide a cushion against unforeseen circumstances in the future. As microfinance becomes integrated into mainstream financial systems, it also faces problems found in the finance industry in general. In some countries strong, even aggressive growth and increased competition has led to overheating and to over-indebtedness of clients. In some cases the focus on serving clients is no longer the priority.
We started investing in developing countries because we recognized that sustainable development, and addressing poverty issues in particular, was a global issue. We believe that the key to sustainable development in developing countries is an all-inclusive financial sector that improves lives by providing transparent, financial services in a responsible way. And we firmly believe that focusing on the interests of clients is the only way to achieve long-term sustainable financial results.
In 2010 through specialised microfinance funds we provided finance to over 85 upcoming and well-established microfinance institutions in 43 countries. We also held equity stakes in 19 leading and innovative microfinance institutions. The microfinance institutions in our portfolio reach 7.4 million loan clients – of which 67% are women and 54% of whom live in rural areas – as well as 5.2 million savings clients.
As well as direct impact through our finance we developed a number of new tools in 2010 to help us increase our customer numbers and serve them better when they join us. These included the launch of a new website across the group, and a new visual identity which meant changes to all our communications, from our magazine to the way people manage their money online with us. We backed this up with improvements to our systems behind the scenes, ensuring we continue to have a robust and professional infrastructure as we grow.
We continued to increase our role influencing public debate about sustainability, speaking at a large number of international, regional and local events, from the Club of Rome to bespoke events for local organic farmers. Our profile in the on and offline media continues to grow in all the countries and sectors where we work, providing an important platform to share our opinion and engage in debate about the sustainability agenda.
We opened new regional offices in Spain, grew our new office in Germany rapidly, moved to a bigger office in the Netherlands and made preparations to do the same in the UK; all as part of efforts to stimulate and professionally manage growing demand for our work across Europe.