Keep in mind that our commentary on the fund, as well as its past performance, is not a guarantee of what will happen in the future. The value of investments, unlike cash, will go up and down over time. Depending on the value of your investments when you sell, you may not get back as much as you invested.

We’ve tried to explain any technical terms where possible and included expandable segments for more information. You may also want to view our A–Z of Impact Investing (PDF download).

Investment approach

The Triodos Pioneer Impact Fund aims to generate positive impact and competitive financial returns from a concentrated portfolio of small and medium sized (mid-cap) companies pioneering the transition to a more sustainable society. We select companies for their contribution to our sustainable transition themes. In an integrated financial and sustainability analysis we identify the impact of material environmental, social and governance (ESG) issues on a company's ability to create value.

Market outlook

Adam Robbins, senior investor relationship manager, Triodos Investment Management
Adam Robbins, senior investor relationship manager, Triodos Investment Management

In 2022, we have seen what happens when the monetary policy rug gets pulled out from under financial markets. That is to say the sharp rise in interest rates saw bond and equity markets rapidly falling in tandem from their record highs. The painful conclusion is that these record highs were manufactured as a by-product of the lack of resilience of our current economic system.

Looking ahead into 2023, we believe a global recession will be avoided, but inflation in advanced economies will not fall below central bank targets (generally about 2%). This means central bankers may keep interest rates on hold after ending the rate hike cycle in Q1 (January to March). We think that initial investor relief due to the rate hike pause will gradually make way for concern about the rocky fundamentals and geopolitical risks. However, towards the end of the year, central bank forward guidance will likely hint at a pivot to lower rates early 2024, which should be enough to further boost investor sentiment.

We continue to see opportunities in the sustainable investment landscape. The European Green Deal, the EU’s roadmap for making its economy sustainable, will continue to gain momentum. The related green taxonomy will enable investors to steer their investments towards more sustainable technologies and businesses, and the creation of an EU Green Bond Standard will deliver a uniform tool to assess green bonds.

The Sustainable Financial Disclosure Regulation (SFDR), part of the EU’s Green Deal, also makes investors more aware of financial risks related to sustainability, and to some extent limits the options for greenwashing. The Green Deal will also force companies to become more transparent.

Besides Europe, we expect to continue to find sustainable investment opportunities in Japan, where corporate governance continues to improve due to top-down governance initiatives while bottom up the Sustainable Development Goals are high on companies’ agenda. In the US, the Inflation Reduction Act will spur the green transition with over EUR 350 billion of green subsidies.

Overall, we will continue to contribute to the envisioned transition by focussing on investments that support climate mitigation and adaption and the fulfilment of the Sustainable Development Goals in this decade.

How the fund has performed

The Triodos Pioneer Impact Fund provided a positive absolute return in the fourth quarter of 2022 (that is, the period from October to December) with a return of 4.1%, outperforming its benchmark.

The fund benefitted from currency movements, the result of the weakening of the US Dollar (USD) and, to a lesser extent, the strengthening of the Yen. This was the opposite of the movements seen in the first nine months of the year. Due to valuation and impact reasons, the fund has less exposure to North America and more exposure to Japan compared to the benchmark. Our investments in Industrials and Consumer Discretionary (non-essential goods and services) detracted from the performance. The fund benefited from strong performances in Materials and Consumer Staples.



As of 31/12/22


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Please remember that past performance isn't a guide to future returns.

Stocks in focus

Contributors to performance

DS Smith

DS Smith’s core business is the manufacturing of corrugated packaging that is largely made of recycled material, which contributes to the global sustainability challenge of resource scarcity. In addition, the company manufactures paper packaging and provides recycling services.

In the last quarter of the year, the company updated its full-year guidance for operating profit and exceeded expectations twice. The company can pass on most cost increases to clients and has also hedged its energy needs for next year.

Chr. Hansen

Chr. Hansen leverages the natural properties of probiotics, which can help limit food waste, antibiotic overuse, reduce the need for pesticides in farming, and increase yield. These sustainability goals fit Triodos’ Sustainable Food & Agriculture theme. 

In December they received a take-over bid from their peer Novozymes. Novozymes will pay in shares and although the premium was huge (+49%), Chr. Hansen traded below that levels, so Novozymes shares fell due to the take-over bid.

Detractors from performance


Wolfspeed look to maximise energy efficiency use in applications such as charging infrastructure and solar inverters. They produce a silicon carbide (SiC) based solution, which has lower resistance than traditional silicon alternatives, significantly increasing power devices' energy efficiency use. 

The shares fell in the quarter as the company announced it will need more cash than initially expected for all its investments. However, its end markets are still very strong and growing (mainly electric vehicles), and we retain our confidence in the business.

Freyr Battery

Freyr will produce semi-solid batteries. These are projected to have higher energy density than conventional li-ion batteries, reaching 350 Wh/kg in tests compared to Tesla's which is seen as the best conventional li-ion battery and currently get to 250-260 Wh/kg. In addition, material costs are expected to be around 40% lower.

The company announced an underwritten stock offering to finance the continued construction of its Giga Artic facilities in Norway which caused the share price to drop, although we believe this new facility will be positive for the business in the long-term.