The climate emergency and need for greater social inclusion dominated much of government, civil society and business discourse in 2019. Despite the continuing backdrop of a polarized political environment, in many countries where Triodos Bank operates dialogue about the role of business and finance in society, continued to be prominent throughout 2019. This resulted, in the banking sector, in broad international agreements, like the UN Principles for Responsible Banking. By the year end banks representing half of the world’s banking assets had signed up to the agreement.

This has also led many banks to promote themselves more prominently as more ethical and transparent and to compete more actively for sustainable loans and investments. This continues to create more competition for Triodos Bank in all the countries where it operates. This provides more motivation for Triodos Bank to promote itself as an authentic pioneer of responsible banking offering products with a purpose that deliver real and lasting change.

Large numbers of people continue to choose Triodos Bank as their bank because it meets their financial needs and is aligned with their values. Savings, lending and investments again grew during the year on the strength of this continuing interest in using money more consciously.

During 2019, in December, Triodos Bank announced its decision not to establish a banking entity in France. A low interest rate environment and growing regulatory demands are expected to continue for a longer period of time. In this context Triodos Bank N.V. has decided not to make the large investment required to establish a banking entity in France.

Higher costs, lower margins and greater impact: the challenge for the banking sector.

Historically low central bank interest rates continued throughout 2019, in part because of the oversupply of money from quantitative easing – the authorities monetary answer to a lack of economic growth during the year. While low interest rates are good for borrowers they are generally bad news for ordinary depositors.

The higher costs of meeting regulation and lower margins because of low interest rates and competition for personal and business customers (either solely on price or from banks eager to lend to attractive ‘sustainable’ loans) continued during the year. Collectively, these issues continue to put pressure on Triodos Bank’s profitability. For many banks, including on occasion Triodos Bank, this has meant increasing fees to their customers for products and services.

Despite a challenging environment for lending Triodos Bank grew the loan book, which is critical to increasing Triodos Bank’s impact. Ensuring a sound balance between the growth of the loan portfolio and a healthy inflow of deposits continues to be an important point of attention.

How we did

Triodos Bank continued to extend its impact during the year.

Offering sustainable products and services with a purpose, a fair return and high-quality customer service to personal and business customers, and increasing the volume of our transactions with them, is crucial for Triodos Bank to increase its impact and fulfil its mission.

Triodos Bank provides a broad range of services which vary between countries. Sales of third party funds in addition to Triodos Investment Management funds took place for the first time in a Triodos Bank country operation during the year, in Germany. This development provides customers with a broader choice of sustainable investment opportunities.

Triodos Bank wants to grow its capital so it can continue to develop and expand its impact, particularly via its lending activity. In 2019 a total of EUR million in new capital was raised across Triodos Bank’s European network (2018: EUR 83 million), attracting over ** net new depository receipt holders. This growth is mainly via retail investors, although a Belgian university was among new depository receipt holders during the year.

Triodos was granted a UK banking licence to operate Triodos Bank UK as a subsidiary company, effective from 1 May 2019. The changes were made in preparation for the United Kingdom’s expected withdrawal from the European Union and ensures continuity of services to UK customers. It remains wholly owned by Triodos Bank N.V. and a very important part of the UK’s banking landscape.

In Spain, Triodos Bank supplements its ‘mortgage with purpose’ with additional opportunities to create positive impact beyond normal banking services. For example, it has developed an online initiative with the support of sustainable energy partners to promote the use of green energy (www.reducetusemisiones.es), as well as Ecómetro Uso Vivienda (https://uso.ecometro.org/). The latter site enables users to assess the sustainability level of their home and find advice to improve it.

In Germany Triodos Bank was ranked in the top three of a prestigious customer satisfaction awards; the Banking Check, n-tv and the Fair Finance Guide.

While in The Netherlands, Triodos Bank was top of the Vertrouwensmonitor Banken 2019, an annual survey under the auspices of the Dutch Banking Association into how much confidence consumers have in the banking sector and their own bank.

Being a learning organisation

Triodos Bank fosters a co-creative culture rooted in its values-based mission. Process improvement training, enabling co-workers to work in more efficient and joined-up ways, took place across the organisation to underpin Triodos Bank’s work during the year.

During 2019, it continued to send participants to work with colleagues from other sustainable banks across Europe, under the auspices of the Institute of Social Banking.

Triodos Bank Spain carried out a training programme integrating management skills and values for all senior and middle management managerial positions. As part of our group-wide effort towards becoming a more efficient organization, it also delivered introductory agile and lean training for over 90 co-workers.

In Germany several colleagues joined a specialist course from the Massachusetts Institute of Technology to learn more about the ‘theory U’ process and to develop prototypes to improve their daily work.

In Belgium a comprehensive three year vision and 2020 year plan process, actively involving all managers, was developed and rolled out. Triodos Bank in um chose its 25th anniversary as the occasion to renew and deepen the connection with Triodos Bank‘s mission. It brought new and longer-standing co-workers together in an interactive reflection workshop about the organisation‘s essence over three days. This initiative will serve as a pilot for the future. It also invested extra effort in personal development plans, knowledge management and internal mobility.

All Triodos Bank co-workers from Triodos Bank in The Netherlands, spent two days on a working visit to social, creative and inspiring entrepreneurs in the city of Utrecht. Together they experienced how money works for positive social, environmental and cultural change.

To support broader work on diversity and inclusion, several co-workers in the UK joined in support of local PRIDE events. This reflects Triodos Bank’s human rights policy that focuses on respecting human rights of individuals.