Triodos Bank supports the sustainable and inclusive transition of our economies and society in line with the Paris target of 1.5 degrees Celsius. We believe this transition is a shared responsibility of governments, business, finance, NGOs and citizens.

In this context, in 2015, at the landmark Paris Climate Conference, Triodos Bank co-signed a Dutch Carbon Pledge to measure and disclose its carbon emissions and to ensure these emissions are in line with the ambitions of the Paris Agreement. The initiative launched the Dutch Platform Carbon Accounting Financials (PCAF), a collaboration between Dutch financial institutions which has produced, we believe, the only carbon accounting methodology developed by financial institutions, for financial institutions, in the world. The methodology was first launched in November 2017. Triodos Bank has implemented the PCAF methodology in 2018 and will continue to collaborate with the PCAF partners, as well as others specialising in this field, in future years in order to refine the models used.

As our main impact in the economy and society stems from our loans and investments, this harmonised approach on carbon accounting focuses on measuring the climate impact or carbon footprint of loans and investments. By accounting for the carbon emissions of our loans and investments, institutions can be transparent about the climate impact of their loans and investments and use this information, ultimately, to set climate targets and steer investments towards a low-carbon economy. In this way banks and the sector more broadly can monitor the GHG emissions, create opportunities for comparison between institutions and deliver more accountability and transparency for their stakeholders. 

During the year a similar initiative was announced in North America, led by Amalgamated Bank. Our fellow Global Alliance for Banking on Values (GABV) member is bringing North American-based financial institutions together to adapt the PCAF methodology to the North American context. And further internationalisation of the approach took place early in 2019 with 25 members of the GABV committing to assess and disclose their greenhouse gas (GHG) emissions within three years. The group intends to align its activities with the Paris Climate Agreement which aims to strengthen the global response to climate change by keeping a global temperature increase to 1.5 degrees Celsius from pre-industrial levels. Triodos Bank also initiated the Dutch financial sector’s commitment to a national climate agreement to substantially cut emissions to help meet the same goals.

985

Avoided emissions
in kilotonnes of CO2

Climate impact of our loans and investments

In our first year of applying the PCAF methodology to our outstanding loans and investments portfolio we have started with the loans and investments that are most material to GHG emissions. We have collaborated with Navigant, a leading energy and climate management consultancy, to execute this work. We have assessed around 68% of our loans and funds’ investments using the PCAF methodology (see graph; portfolio coverage). The main sectors excluded from this analysis are the cultural, health, social projects, development cooperation, retail and fair trade (food and non-food) sectors, as well as sovereign debts. 

Portfolio assessed using PCAF methodology

in millions of EUR

Portfolio assessed using PCAF methodology (pie chart)

For readers with a more detailed interest, a separate methodology report on how the PCAF standard was applied to this portfolio is available on our website (‘Triodos Bank Greenhouse Gas accounting methodology’ is available from the Downloads centre here, click on ‘Positions and other publications’). We have also scored the quality of the carbon footprint data of our lending and investment sectors. Over time, we hope to improve the quality of this data, the methodology that underpins it and, therefore, the accuracy and relevance of our reporting.

Data quality is scored from 1 to 5 per sector.

Data quality from 1 to 5 per sector (graphic)

We calculated the following carbon footprint applying the PCAF methodology to our covered portfolio. We also applied an attribution approach. This means that we calculated the emissions as they relate to the proportion of our finance in a project or customers’ balance sheet. GHG emissions are measured in tonnes CO2 eq. and categorised by:

  • Generated emissions: GHG emissions arising from various economic activities. This refers to carbon that is emitted into the atmosphere.
  • Avoided emissions: GHG emissions that are avoided from fossil-fuel power generation due to renewable energy. While this is very important avoided emissions do not remove existing carbon from the atmosphere.
  • Sequestered, or absorbed, emissions: GHG emissions stored in carbon sinks, such as trees, plants and soil etc. This refers to the actual removal of carbon from the atmosphere.

The following graph shows the greenhouse gas emissions that can be attributed to Triodos’ loans and investments, using the PCAF methodology, in 2018. Although these are our first and early results, they already clearly indicate that financing a sustainable economy for many years has resulted in substantial avoided emissions relative to our generated and sequestered emissions.

Our actual emissions provide a baseline, which means we can start to improve and monitor our progress in working with our customers to reduce their emissions.  The level of sequestered emissions provides insight on how we can reduce our emissions in the future, effectively ‘cancelling out’ our actual emissions.

Climate impact of our loans & investments

in ktonne CO2 eq. 2018

Climate impact of our loans & investments (bar chart)

The graph below shows the intensity of Triodos’ greenhouse gas emissions, per billion euro lent and invested using the PCAF methodology. It provides stakeholders with an indication of the impact of our finance on generated, sequestered and avoided emissions. This is important information, but it should be remembered that limiting, and then reducing, absolute greenhouse gas emissions is what’s required to enable us to live within the planet’s environmental limits.

Climate impact in emission intensity 2018

(ktonne CO2 eq./billion EUR financed)

Climate impact in emission intensity 2018 (bar chart)

As one of the first banks to report in this way, the next step in this work is to collaborate with our partners to encourage others to do the same. Because ultimately stakeholders should be able to compare the GHG emissions of one bank with another.

Crucially, we will develop science-based targets. These targets will describe the trajectory we need to follow to make sure that our activities and associated emissions contribute to, at most, a 1.5 degree global increase in temperature. Clearly that also requires other financial institutions to do the same if we are to play our part as an industry in keeping the global increase in temperature within safe limits.

The next table provides more detail about which sectors we finance and details our absolute, avoided and GHG intensity emissions.

The first column describes the different sectors that have been assessed using the PCAF methodology and highlights whether they are responsible for generated, sequestered or avoided emissions. The second column further details the total emissions from each of these sectors. The third details the intensity of the emissions in relation to each sector, as we describe in the graph above.

The reporting of the GHG emissions of financial institutions’ loans and investments is still in its infancy. This is the first time we have translated the PCAF methodology to our reporting. Our goal is to share our approach with others with a view to creating harmonised, comparable reporting approaches so that stakeholders can easily compare one institution with another.

Impact sector

Total out­standing loans & funds invest­ments covered
(in 1,000 EUR)

Attributed emissions
(ktonne CO2 eq.)

Emission intensity (ktonne CO2 eq./billion EUR)

Data quality score
high quality = 1
low quality = 5

1

Avoided emissions should not be summarised because their absolute emission is zero.

Generated emissions

 

 

 

 

Environment:

 

 

 

 

 

Organic farming

 

290,919

27

93

3.2

Sustainable property

 

903,361

22

24

3.4

Residential mortgages

 

1,679,827

30

18

4.0

Social:

 

 

 

 

 

Care for the elderly

 

578,298

25

43

4.0

Social housing

 

455,639

19

42

4.0

SRI funds

 

1,073,196

53

49

2.0

 

 

4,981,240

176

35

3.4

Sequestered emissions

 

 

 

 

Nature development & Forestry

 

69,536

–24

–345

3.1

 

 

 

 

 

 

Net emissions

 

5,050,776

152

30

3.4

 

 

 

 

 

 

Avoided emissions

 

 

 

 

Renewable energy

 

2,250,801

–985

–438

1.8

 

 

 

 

 

 

Total1

 

7,301,577

 

 

2.9

Coverage rate

 

68%

 

 

 

In 2018 Triodos Bank and its investment funds financed renewable energy projects and energy saving projects that avoided over 985 ktonne of CO2 eq. emissions compared to fossil-fuel power generation, equal to the avoidance of emissions of over 5.4 billion kilometres travelled by car.

Next to investing in renewable energy, Triodos Bank also financed forestry and nature development projects. This resulted in the sequestration of approximately 24 ktonne CO2 eq., equal to at least 367,000 mature trees.

Together the sequestered and avoided emissions largely outweigh the emissions that were generated by the other loans and investments covered in this climate impact measurement of approximately 176 ktonne CO2 eq.

We will continue to report the climate impact of our own operations and loans and investments. We will explore improving the accuracy of our measurements and will investigate whether to extend our climate impact assessment to other sectors in our portfolio.

Climate impact of our operations

We have measured the climate impact of our operations since 2013. In addition to efforts to reduce this impact, each year, we have also compensated these emissions, via "Gold standard" projects from the Climate Neutral Group.

in thousands of kg

2018

2017

2016

2015

2014

1

Due to changes in the method of calculation, the CO2 emission of energy has fluctuated in previous years.

Electricity1

7

13

22

1

100

Gas consumption (heating)

73

72

73

90

124

 

 

 

 

 

 

Paper

143

140

203

293

314

Public Transport

105

268

243

214

260

Car

1,487

1,489

1,499

1,324

1,145

Flights

997

1,082

1,083

1,119

1,141

Total

2,812

3,064

3,123

3,041

3,084

 

 

 

 

 

 

Minus: Compensation for CO2 credits

–2,812

–3,064

–3,123

–3,041

–3,084

CO2 balance (neutral)

 

CO2 compensation costs per tonne (EUR)

8.40

8.40

8.40

8.40

8.40