Triodos, an ethical bank

A. The main facts about the activities of the company.

Although the year of the bank foundation was 1980, the Triodos project started some years before. In 1968, four economists and jurists joined and created Triodos Foundation, which was aimed to use money in social responsible way, lending it to good social initiatives, which had refused by traditional banks. Before Chernovil’s disaster, Triodos started to invest in the first wind power projects in Netherlands and created the Wind Fund and, some years later, at 2006, Triodos starts to offer its first investment fund, Triodos Renewables Europe Fund. At 2013, Triodos Bank is one of the most important Ethical Banks in Europe, where is many countries. Triodos recently joined to Global Alliance for Banking on Values, which include most of world’s ethical banking sector.

As a bank, it offers products and services for particulars and entities who want to invest and save money, but only financing businesses and projects of sustainable sectors of the real economy that add social, cultural and environmental values. Transparency is the most important base of its business model, so customers know exactly what kind of activities are financed with their money.

How do they do it?

- Facilitating a responsible and conscious use of money
Its customers know which businesses and projects it finances with their savings. In this way, they know the impact of their financial decisions on other people’s life and on environment.

- Investing only in projects and initiatives that add value to society
It supports the development of businesses and projects in which the added social value is as important as the financial value.
Moreover, the interests earned from loans are reinvested accordingly to some financing criteria, taking into account the added social value and the official certification systems in the areas which they exist, as in the case of organic farming and fair trade.
In overview, those criteria are the following:

Nature and environment
• Organic farming and biodynamics
• Energy saving and renewable energy
• Sustainable building
• Environmental industry and technology (recycling, transport, air, water, etc.)
• Environmental protection and biodiversity conservation

Social sector
Initiatives that promote justice principles and equal rights in areas such as:
• Creation of opportunities for the most vulnerable people and with special care needs.
• Development cooperation
• Fair trade
• Health

Culture
• Cultural and artistic activities (music, dance, theatre, film, literature, etc.)
• Education
• Research
• Personal development, based on human freedom
• Tourism and leisure sustainable activities

- Through a partnership strategy
They develop partnerships with similar institutions and social agents who, like them, work to improve the quality of life and promote respect for the environment.
They belong to these networks:
• Global Alliance for Banking on Values
• Eurosif (European Social Investment Forum)
• Red emprendeverde
• deSOLaSOL
• INAISE (International Association of Investors in the Social Economy)
• Wood Fair
• Social Venture Network

Also, they collaborate with some organizations as Amnesty International, Greenpeace, Intermon Oxfam, Unicef, WWF, etc.

B. The Ethical challenges this company is addressing.

Triodos bank is facing, in our opinion, one of the most difficult challenges for the financial sector nowadays: gain the people trust and have profits acting in an ethical way. This is reflected in its main goals, which are the following ones: Help creating a society that promotes quality of life and focus on human dignity, enable individuals, business and organizations a responsible use of money and encourage with that a sustainable growth. The last one is to provide their customers with a sustainable financial products and quality service.

That’s why Triodos Bank is redefining the financial sector with the purpose of basing the financial system in two concepts; the sustainable finance policy and the transparent policy.

Triodos bank is now changing the idea that a financial firm can only have profits without an ethical behaviour. The people trust in this company and a proof of that is the increasing profits they are having right now, contrarily on the traditional financial sector tendency.

We have looked for the net income of the main financial firms in Spain, and we have calculated the increase/decrease rate per year to make a comparison with Triodos. We are not able to insert graphics in this project, but we have seen that Triodos is the unique financial firm (in comparison with CaixaBank, Banco Santander and BBVA) in Spain that has positive growth trend in the last years (from 2008 since now)

C. What makes you believe this company is really ethical and why you trust it?

Inspiration

The firm we choose for the WeDreamBusiness is Triodos, one of the most important banks of the new emergent financial sector, the “ethical bank”. This business sector differs from the traditional financial sector in the sense that they have full transparency about their investments, and they do not need to hide anything because they invest in ethical firms such as social foundations or organizations, sustainable energetic firms and this kind of ethical business.

We choose this firm that operates in this sector because we think that this type of firm demonstrate to the world that is possible to be profitable and ethical at the same time. We think those types of business are the future of the world, and that is important to see how the financial sector is changing and adapting to a new better world.

We also think that is very interesting to go far than the typical Social responsibility, which consists in give money to some ethical foundation while the firm is getting profits. In our opinion, is so much interesting this firm because their business model consists in being ethical, so they must have a good behaviour getting as much profits as they can.

We think that investing a part of the profits in Social Responsibility is a good start, but the future of a sustainable and ethical business model is much deeper than this. In any other firm, if the profits start to decrease, this will be the first thing they are going to cut. In contrast of this, if Triodos do not have enough profits performing in an ethical way, they would have to close the firm, but it will never start to operate unethically.

Trust

We trust in Triodos because its actions speak for themselves. If you take a look on its website, you are able to look at all the investments they are doing. So, they have full transparency of the actions they take. We think that being transparent is the best way to get the trust of the society.

For example, they are one of the founders of the Global Alliance for Banking on Values, a network of leaders in sustainability. It is currently made up of twenty two worldwide banks that promote a renewal of the financial system from a sustainable approach.

To conclude, we could say that we trust them because being ethical is part of its business model.

D.The possible challenges facing the company in the future and how you think this company may improve.

The main challenge that Triodos has to face is to survive in a really hard sector as financial, and it has to do this without leaving its main principles and ways to act accordingly with its ethics and social constraints.

Normally, traditional banks offers to their customers’ high profits, but to get those, banks invest in so many speculative and unethical companies and projects. Triodos has to try to be as much competitive as its values allow in order to get the interest of the customers.

It seems that financial profits are directly linked with unethical and speculative investments, so Triodos is challenged to demonstrate that that’s not the only way to operate in the financial sector. An indicator that it’s reaching this objective is that Triodos is one of the few banks that’s expanding since crisis started. Triodos has taken advantage of the values and financial crises, because many people started to realize that they prefer a stable and ethical bank, which takes care of society, than traditional and speculative banks.

We think that Triodos could improve if it expands its products offer. For example, Triodos is not offering at this moment’s retirement plans and it would be really good if it does, because the same people that now are interested about the banking accounts probably would be interested in a good and ethical retirement plan.

One of the best things about Triodos is its high transparency in its investments. It’s really good for a user to know where their money is going but, there’s no possibility to chose where the customer wants to invest its money. It would be really interesting if every customer, at the time to open an account or get any product, could propose where the most of his funds are invested. This suggestion goes in order to solve some critics about the criteria of investment. If people can chose them, the transparency will be even more evident and people will feel more committed with the bank.