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Socially Responsible Investments (SRI)

Smart investors invest in better.

Here at Triodos Bank, we’re seeing a growing awareness amongst investors that their money has an impact on the world. Money can play an important role in the transition of society to one that’s fairer, more humane and safeguards our planet from the impacts of climate change.

At the beginning of October, we asked 2000 people about their investing habits*. The results of this survey reveals there’s clear demand for more responsible and impactful investments – ones which don’t negatively impact people, society and the environment. Over 60% of UK investors would like their money to make a positive contribution to society and the environment. However many people struggle to find options for socially responsible investments, and our survey revealed that over half say they aren’t even offered the choice in the first place.

Where you choose to save and invest, and what your bank chooses to do with your money has an impact. Banks and financial service providers should have a responsibility to be transparent about where money goes.

So what are Socially Responsible Investments?

If you don’t know what a socially responsible investment is, don’t worry: you’re not alone. The socially responsible investment (SRI) market in the UK is still fairly small. Although it’s now worth over £15 billion**, it only represents 0.26% of the total investment market***. It’s a bit of a wake-up call when you consider almost all UK adults invest in some way or form. But whether that’s through a workplace pension, directly in a fund, or via company stocks and shares, nearly half (47%) of those we surveyed don’t know where their money is actually invested. Because of this, a similar percentage of investors (48%) want banks to be more transparent about where their money is being invested. Triodos Bank is 100% transparent. Our investors and savers can see where their money goes via this website, and the benefits it brings to society and the environment.

Socially Responsible Investment (SRI) funds provide an opportunity for people to invest in things like healthcare, renewable energy, sustainable businesses, organic farming, and more. Our research shows that over 60% of UK investors would like their money to support companies that are both profitable and ethical. However, the majority (51%) have never been offered the option of investing in an SRI. Furthermore, 46% would not know where to go to find out more information. Clearly, there is a demand in the market that the financial industry is not currently responsive to.


"I want to know that my money is invested in companies that are working for a healthy sustainable future." Caroline from Bristol

Triodos SRI funds – a unique opportunity

Triodos Bank wants to see the SRI market grow - the more people invest in SRIs, the more resources are available for socially and environmentally sustainable projects. Triodos Investment Management (TIM) – a wholly owned subsidiary of Triodos Bank in the Netherlands – has developed four SRI funds that amount to €1.3 billion in managed assets. Through SRIs, TIM invests in listed companies with an above-average environmental, social and governance performance. Two of these funds are available in the UK: the Triodos Sustainable Equity fund and the Triodos Sustainable Pioneer fund, both of which are available via a Stocks & Shares Individual Savings Account (ISA).

The Triodos SRI funds  and the Triodos Ethical Stocks & Shares ISA are available to UK residents who are aged 18 years or older.

It’s important to remember that capital is at risk and the value of an investment can go down as well as up: investors may get back less than they originally invested. Dividend income is variable and not guaranteed.

Both funds have an initial charge of 1.5% until 30 December 2016 and have additional ongoing management fees of 0.75% (Equity Fund) and 0.95% (Pioneer Fund). These funds should be invested in for the long-term which we view as five to ten years.

Prices are quoted in sterling, however when funds are purchased or sold, sterling is converted from sterling into euros or back from euros into sterling. Because of this, the total return is dependent on the euro-sterling exchange rate. Any dividend income will also be converted from euros to sterling. Keep in mind that the investor is also exposed to currency fluctuations in the regions in which the fund invests.

To those who think that multinational corporations are rarely driven by ethical or sustainable motives, buying shares in publicly listed companies might seem counter-productive. However, through stringent criteria, TIM makes a very deliberate choice to find and invest in companies that are more responsible than others – companies that are driving the whole sustainability agenda forward.

Through TIM, we maintain an investment position that is much more active than simply buying shares on the stock market. With many of the investee companies, TIM develops proactive relationships, creating the framework for engagement through dialogue to motivate them to be more sustainable.

"Large companies are influential and are in a position to contribute to positive change. For example, clothing retailer H&M is making serious investments in improving the labour conditions in factories in Asia and setting a positive example for the rest of the textile industry."

Active Engagement – mutually beneficial

Engagement is about influence and applying pressure on companies in a way that wouldn’t be possible if Triodos didn’t invest in them. The TIM Research team is committed to exerting the strongest possible positive influence on the companies in the portfolio through active engagement.

Through these engagement activities, they’re able to identify specific topics to focus on. For instance, the fund managers continue assessing companies in terms of how far they are limiting their CO2 emissions, as laid out by the Paris Agreement. They also are talking to companies about ensuring a more balanced gender distribution in higher management positions. They encourage companies to take a more proactive approach to animal welfare. And finally, it’s important for investee companies, especially in the textile industry, to make rapid progress when it comes to paying fair wages in developing countries.

"Car manufacturers have to become more sustainable and we want to contribute to that process. BMW has made a great deal of progress in reducing the CO2 emission of its vehicles". Rosl Meltmeijer, Triodos Research

This active position is not only beneficial to our investors, but also to the invested companies. The Triodos Sustainable Pioneer Fund invests in leading innovative and pioneering companies worldwide, many that are committed to the ideals of sustainability. Wessanen, a leading company in the European organic and natural food market, offers well-known food brands such as Clipper tea and Whole Earth peanut butter and is part of this fund portfolio. CEO Christophe Barnouin says that their business strategy relies on like-minded investors: "Because we are in the business of changing the world of food, it is important for us to have investors on board that support our vision and strategy. Being part of the Triodos Sustainable Pioneer Fund means that we are supported by investors that want to be with us on the journey for the long term, which is key to our success now and in the future."


"I want to be sure that my money is being used for good causes." Cat from London

Smarter investors really are investing in better

SRI funds are one of the ways that Triodos Bank is making it easier for us all to bring our money and our values together. Find out more about the Socially Responsible Investment (SRI) funds .

This information is not financial advice. Remember, if you are unsure if either fund is the right investment for you, please seek independent financial advice. Investments are not covered by the Dutch deposit guarantee scheme, however they may be covered by the Investor compensation scheme. For more information on these schemes please read the deposit guarantee scheme and investor compensation scheme page .

*Triodos Bank UK Consumer Survey, conducted by Opinium Research LLP on 5 to 7 October 2016. The survey was an online interview of a nationally representative sample of 2,003 UK adults.



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