A year of transition

In April 2018, Triodos Investment Management brought the asset management of the Triodos SICAV I sub-funds inhouse. At the same time, it launched an integrated investment approach centered around seven transition themes. These themes provide a comprehensive overview of the transitions the world needs to undergo to solve our most urgent sustainability challenges.

“It was an important year”, Hüsken says. “The portfolio composition changed quite a lot as we moved our selection approach away from best-in-class and towards our seven transition themes. We had around 60 companies in the portfolio and we trimmed 27 of them.”

Defensive positioning

Pieter-Jan Husken, fund manager Triodos Sustainable Equity Fund

While implementing the new transition theme strategy, Hüsken had to contend with market and sector volatility and a weakening global economy. That coupled with negative earnings forecasts, he took the strategic decision to reposition the portfolio more defensively. The move paid off with the portfolio outperforming in relative terms by 1.5 to 2.0% points.

Hüsken also chose to increase the portfolio’s exposure in Japanese stocks. When asked why he tells: “Japanese companies’ balance sheet quality is far superior. They’re resetting their strategy with more consideration for corporate governance, and many of them are reframing their strategies to focus on the Sustainable Development Goals. They’re really putting a lot of effort into stewardship and there’s a lot of ESG momentum too.”

Engaging for impact

Engagement with potential investee company Yamaha during the year resulted in a significant outcome. “It took some effort to get Yamaha across the line”, Hüsken says. “For the production of some of its instruments the company uses wood that has not been certified as sustainable. So formally, the company therefore did not fulfil our minimum standards on sustainable sourcing. However, Yamaha uses several unusual types of wood, for which there is no certification available. We had a lot of meetings, including a one-on-one with the CEO. We were told we were the first investor to ask these types of questions.”

Yamaha, which earns 91% of its revenues are from musical instruments, music schools, and music related audio equipment, was eventually selected for investment in the theme of Prosperous & Healthy People. Significantly, at an investor briefing in November it announced that it had established a sustainable wood procurement initiative in a joint research agreement with Kyoto University. The R&D project is intended to focus on the cultivation and use of sustainable forestry resources. “Our engagement undoubtedly contributed to this positive development”, says Hüsken.


Hüsken expects the market to remain volatile for some time and is likely to maintain the defensive position, but it doesn’t stop him from having clear and ambitious goals for the year ahead. “I want to phase out the last companies that do not have a thematic fit”, he says. “I would also like to see more diversification in the portfolio in terms of the spread between themes, sectors and countries, and I want to reduce the overlap with Triodos Pioneer Impact Fund so that the two funds can be more complementary in their investor base.”

Regarding engagement strategy, Hüsken tells that he wants to ramp up thematically based engagement: “Engagement will become an even more important focus going forward. We want to engage and challenge companies on issues and topics where we can make a real difference; those where our efforts can create significant material impact.”

For more information about the fund’s financial performance, please download the annual report. The new impact report Moving the Needle presents a more detailed overview of the fund’s impact.

About the fund

Triodos Global Equities Impact Fund aims to generate positive impact and competitive returns from a concentrated portfolio of equities issued by large-cap companies offering sustainable solutions. In 2018, the fund achieved a return of -1.9% (I-cap). Assets under Management rose to EUR 652.2 million.