The table that follows provides Triodos Bank’s key strategic objectives for 2019 and progress against them in some detail. A ‘progress at-a-glance’ indicator also provides an estimation of our progress against each goal in 2019. This assessment is based on professional judgement and the opinion of co-workers with an overview of these topics.

The table is followed by strategic objectives for 2020. The information reflects some of the key issues raised in the materiality analysis that are priorities for Triodos Bank and our stakeholders.

One bank: redesigned, responsive and robust

Our key objectives for 2019

How we did

Progress at a glance

● ● ● Met     ● ● ○ Mostly met     ● ○ ○ Partially met     ○ ○ ○ Not met

Improve customer satisfaction via simpler and quicker processes, including better Net Promoter Scores (NPS). Improve efficiency by redesigning how we do business within domains relating to digitalising key areas of our core business.

We further digitalised our core customer processes to make them fully straight-through, compliant by design and more customer-focused. Outside of these investments, we are further building on and extending our continuous process improvement activities, with a focus on embedding end-to-end steering on core processes in the organisation, using ’Lean’ methodologies. We expect these developments to contribute to our Net Promoter Scores (reported in more detail below) in future years.

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Become more adaptive to change in our business via agile ways of working: shorter time-to-market to address emerging risks and opportunities.

Since the beginning of 2019, most of the change in the business has been delivered by group-wide, multi-disciplinary teams and executed in new and agile ways of working around specific areas of improvement. We started the transition to the new way of working with seven domains, which represent approximately 80% of our overall change portfolio.

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Improve underlying profitability via financial and commercial optimisation: improving income generation, steering on more profitable lending growth, cost-neutral transaction services and more diversified capital and funding sources.

We reviewed the potential growth in more profitable sectors. Controlled steering and planning have been put in place to obtain more insight in the profitability and the use of capital. At a group level we are decreasing the dependency on interest income by enhancing the distribution of investment funds. We have started in Germany with the distribution of third-party investment funds that meet our criteria. We have created a retained RMBS (Retained Residential Mortgage-Backed Security), based on the mortgage portfolio of Triodos Bank Netherlands. This structure allows us to be more flexible in our liquidity funding strategy.

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Remain evidently ‘in-control’ through reduced complexity and greater attention paid to key risk areas.

The ‘In Control Statement’ was signed off at a business unit and Group level. Key control deficiencies have been identified and (partly) mitigated. Compliance-related governance improvements have been identified and implemented. Specific to the areas of financial crime, we have started to increase our efforts to prevent this risk. We focus on uniform controls and a better oversight on the first line activities. Finally, our core processes are being simplified and standardised to reduce our compliance risk and stay in-control.

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Empower co-workers and senior management: create baseline data for 2019 so higher levels of satisfaction of co-workers regarding efficiency and empowerment can be assessed in future years.

A group-wide co-worker survey was executed. One of the outcomes was that efficiency remains a serious concern for many coworkers. To address this, various projects have been initiated to empower teams to innovate, adapt, and deliver value to improve efficient working. More information on the co-worker survey can be found in the co-worker chapter.

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Unlocking our purpose: enabling customer engagement; activating our communities

Our key objectives for 2019

How we did

Progress at a glance

● ● ● Met     ● ● ○ Mostly met     ● ○ ○ Partially met     ○ ○ ○ Not met

Increase our relevance to customers and society through our suite of ‘products with a purpose’ and focus on our core impact themes of ‘Energy and Climate’, ‘Food and Agriculture’ and ‘Social Inclusion’ – helping our communities better understand and extend their individual, and our collective, positive impact.

Due to the prioritisation of mandatory projects we have not yet conducted a review of our products and services based on the ’products with a purpose’ vision during 2019.

However, on our core impact themes, we published vision papers relating to Energy and Climate and Food and Agriculture, to support and enhance relevant content information, to guide our commercial activities and provide a clear reference for the assessment and development of products with a purpose.

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Implement our new impact assessment methodology across our loan portfolio, further improving the understanding of impact within the organisation and amongst our loan clients, savings clients and wider stakeholders. We aim to assess all loans, currently subject to an annual review, by the year end and be reporting on impact performance and further develop our carbon accounting within Triodos Bank and promote its wider adoption outside the bank.

We have developed and implemented the ‘Triodos Impact Prism’, a tool to understand in a more coherent way about impact. The Prism provides specific information about the sustainability value of a loan or investment and its capacity to deliver impact in the future.
We reported on the carbon footprint of our loans and investments for the first time, in the 2018 annual report (released in the Spring, 2019). During the year we also helped to catalyse the development of carbon accounting globally, co-creating a funded international programme to encourage much wider adoption of carbon accounting around the world.

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Maintain satisfactory profitability of our core businesses through detailed analysis of our business units, commercial and financial optimisation.

In 2019, priority was given to obtaining a more granular insight into the profitability of our lending activities, given our risk appetite on capital.

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Increase the proportion of fee income across the group from investment funds distribution and fund management.

With respect to our sales and distribution of investment funds, we are increasing our sales capacity. During 2019 we expanded to Germany, Italy and Austria. With respect to fund management, we have been working towards making a shift from offering many themes combined in a few funds, towards offering only a few themes via many potential solutions. We have started two new funds based on this strategic choice.

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Frontrunner in responsible finance: leading by example; Innovating finance for impact

Our key objectives for 2019

How we did

Progress at a glance

● ● ● Met     ● ● ○ Mostly met     ● ○ ○ Partially met     ○ ○ ○ Not met

Influence the change of the financial system towards greater sustainability through advocacy and engagement, taking up our role as a frontrunner in responsible finance to motivate others.

We have been active in several countries to promote the connection of the financial industry with societal challenges and economic needs. In Spain we have participated in the COP25, and co-authored the signing of a sector-wide commitment to the Paris Agreement.

In terms of topics, we play among others an active role in promoting methodologies to disclose or measure impact, such as TCFD (Taskforce on Climate-related Financial Disclosures), which provides a framework for climate related financial risk-based assessments. We play a leading role in building the Partnership for Carbon Accounting Financials (PCAF), which is a methodology to allow a carbon assessment of investments and lending portfolios (described above). Furthermore, we have taken a stance on the development of a climate-related impact expression for sectors by participating in the development and sponsoring the international use of a taxonomy.

Finally, we are actively engaging with policy makers on the Capital Requirement Regulation (CRR II) capital rules.

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Increase and leverage our long-term impact; by exploring how to finance new business models, developing new ventures, partnering with third parties and/or external funders, and catalysing emerging sustainability themes through gift money.

Create and scale up group-wide business activities that generate additional impact and potentially contribute to long-term future profitability.

Develop our systemic and external awareness: bringing insights, external partners and future-oriented thinking into our organisation.

In 2019, we launched a new business entity, positioned alongside both Triodos Bank and Triodos Investment Management: Triodos Regenerative Money Centre (TRMC), with total funds under management of almost EUR 80 million. Its objective is to lend, invest or donate money that has as its main goal to make pioneering, transformative initiatives possible in areas where, for different reasons, bank and investment products cannot provide an answer (yet).

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Strategic objectives for 2020

The Strategic Objectives mentioned here are derived from our 2019-2021 strategic plan. Overall our intention is to transform and make progress at three levels, our Strategic Themes:

  • internally, at the level of the organisation: One Bank: redesigned, responsive and robust;
  • through our relationships, at the level of interactions with our clients and stakeholders: Unlocking our purpose: enabling customer engagement; activating our communities;
  • externally and systemically, in terms of how we influence beyond our organisation: The frontrunner in responsible finance: Leading by example; Innovating finance for impact

Within these three Strategic Themes, a total of 10 key objectives have been identified that are supported by a series of initiatives, which build upon the progress made in 2019. Below, the Strategic Themes are further explained, the relevant key objectives are mentioned.

One bank: redesigned, responsive and robust

Improving our operating model by acting as one (bank), enhancing the customer experience and responsiveness to customer needs via unified, digitally supported processes, leading to a step change in efficiency and in-control.

We have identified the following four key objectives in this Theme.

  • Business model enhancement, which includes among others intensified steering on profitable lending growth and decreasing our dependency on interest rates by putting more emphasis on fee income;
  • Operational optimisation, for example by combining initiatives around the customer experience with enhancing efficiency and Know-Your-Customer requirements;
  • Financial optimisation by fine-tuning our liquidity and capital position;
  • To improve Risk Management through reduced complexity in combination with an integral and more complete approach to risk.

Unlocking our purpose: enabling customer engagement; activating our communities

Bringing the purpose into our customer propositions, connecting them more explicitly to impact and by doing so, enabling customers and communities to take action to realise that impact. Becoming the reference sustainable finance platform, offering our own products with a purpose and impact investment solutions but also carefully selected products of other providers.

The three key objectives we have specified are:

  • Becoming a reference sustainable finance platform to enhance our relevance, for example by providing customers with relevant, actionable information related to our impact themes, Energy and Climate, Food and Agriculture, or Social Inclusion;
  • Unlocking our purpose via our products to enhance our relevance and distinctiveness, among others by starting to introduce third party funds alongside our investment management funds;
  • Build towards a more resilient and vibrant co-worker community, among others by continuing to strengthen a culture of change effectiveness, anchoring the required skills throughout the organisation and incorporating them in leadership development.

Frontrunner in responsible finance: leading by example; innovating finance for impact

Taking a leadership role in the transition of the financial system, from being a niche player to a front runner.

We have identified the following three key objectives as part of this Theme:

  • Promoting local and innovative initiatives with the potential to become viable business propositions in the future;
  • Triodos Regenerative Money Centre as the Triodos-hub to increase and leverage our impact by supporting transformative and frontrunning initiatives;
  • Actively take a stance to Change Finance by participating actively and visibly in the public debate to influence financial system change.