Small and sustainable: Triodos Bank

Main Image Detail123532390 / Emma Gutteridge / Photolibrary


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The first thing you notice about Triodos Bank’s quarterly publication, The Colour of Money, is the cover. An extreme close-up of a green-eyed freckle-faced woman, so close you can see the pores on her skin; her green eye casts an inescapable gaze.

This image is about transparency, connectivity and being close. Most of all, it’s about self-belief. And Triodos have plenty of self-belief as history seems to be on their side, or at least a certain historical trend. Triodos was established in 1980 to foster social, sustainable banking and in 1990 set up Europe’s first Green fund. By 2012 this idea of sustainable banking seemed like a sensible idea in the wake of the bursting of the financial bubble and its consequences.

The bank’s communications highlight ideas that have a great deal of currency such as responsibility, and a big idea that sits easily with the bank, its ethos and the current social climate around ‘the small’. The selection and use of the cover image on The Colour of Money marries the advertising buzzword of the moment –authenticity – with the conceptual, the extreme close-up as a moment of intimacy. In a multinational bank this could feel creepy but in a smaller financial institution it hints at the kind of relationship that is appropriate.

We asked Huw Davies, Head of Personal Banking, Sales and Marketing at Triodos to expand on the key concepts which are driving the ethos of the bank – sustainability, small and connection.

Curve: When was Triodos set up and what was is its philosophy?
Huw Davies: Triodos was set up in the Netherlands in 1980 and we’ve been in the UK for about 15 years. We are now in Belgium, Germany and Spain so we’re a European bank with a simple mission – we believe that we should be making money work for positive social, environmental and cultural change. One of the analogies we use is if you imagine society as a body then you could say the health of that body depends on the blood that makes it work and the heart that pumps it around. You could see blood as the money and banks as the heart that should be pumping that money around to keep the body functioning. It’s quite a basic mission and outlook on the role of banks. We think they should be there to lend money and provide place for savers to put money. And maybe they’ve lost track of this a bit in terms of making money for the sake of making money and investing in investments.

Curve: What kinds of companies and investments do you make?
HD: It’s become very opaque and complicated and that has been demonstrated over the past five years in what’s gone wrong. We’re in business to help create a society that promotes a quality of life. We only lend the money that we’ve got so we can basically say if you want to save with us, we hold your savings we pay you a competitive return and we will only lend that money to businesses and organisations in certain sectors which we feel are adding to that positive change to various parts of society and the economy. That could be anything from wind farms, to cultural art centres, to social housing, a huge range of enterprises. But they all have a common thread, which is they are contributing to positive change and making the world a better place to be. We then provide the link back to our savers, showing on our website every place that we lend to in the UK. Showing clearly to our savers that if they put their money with us you will know all the places that we lend to and what your money is doing.

Curve: It’s a very concrete, transparent relationship between saving and investment?
HD: That is the difference with us as an ethical bank, we show where our savings money is being used and for good but in a completely business-like way. We have strict business relationship managers to ensure that before we make any loans they are experts in the areas that we are lending to, so our bad debts are very low when you compare to a lot of the financial sector - that is proof of a positive lending approach.

Curve: You’ve noted what has gone wrong in the FS sector in the last five years, and one of the observations often made is that investment, and management, in companies in general has been driven by short-termism, which proved not to be ‘sustainable’. Is that a fair characterization?
HD: If you compare it to other places it probably is different and that comes back to a longer-term view of what we are here for and the longer-term change that we want to bring about. Rather than sitting here as a business with shareholders and trying to maximise short term profits and returns I think our model is very different. We want to maximise our profits, without returns we wouldn’t get investors, profit has to be there but not for profit’s sake.

It’s to enable the growth of a bank with a mission, and that’s the crucial point. We look outwards from Triodos and ask “How do we fit in society”, “What are the things that we are trying to encourage and facilitate and help?” It’s not about making as much money as possible and giving it back to shareholders. There is a debate about the role of businesses in society and who the stakeholders are and I have heard a phrase used, which we have always used, about ‘social return’. At the moment we offer really quite competitive rates for our savers in terms of actual cash but we also offer a ‘social return’.


Curve: How do you measure ‘social return’?
HD: It’s harder to measure than your savings rate. If you know how the business is run and types of businesses that we are lending to then I suppose that is a social return.  And then we do our best to measure the impact of where we lend. So for example, this might include the number of houses across Europe that are powered by green electricity, or the number of organic meals that have been produced on farms that we have lent to. We can go into the statistics to demonstrate if you put your ISA allowance with Triodos this is what it could do.

Curve: There are lots of different definitions of what is sustainable. How would you define it for your bank?
HD: I am really keen that all businesses including the banking sector become more sustainable.  There is a cynical part of me that worries that if you don’t change the mentality of why you are in business then to my mind, it can become a greenwash. You put some pictures of polar bears on melting ice caps and you donate a small proportion of your profits to a charity and then say everything is ok. I struggle with that because on the one hand you can argue that something is better than nothing but you have got to be careful that token gestures don’t make people think that we’ve done enough. There needs to be a more fundamental cultural change about why we are here and what we want to achieve to be genuinely sustainable.

I would think that we look at ‘People, Planet and Profit’ as a triple bottom line. It sounds clichéd but what it means is that in order to be sustainable we need a sustainable level of profit. In addition to that, we want to be sustainable in terms of the planet. That’s an important role for businesses and consumers and their role in encouraging consumer behaviour to change. If big businesses use some of their power to offer more sustainable products and behaviours then they do have a role to lead the way and they do have a responsibility to do that.

‘People’ is the last aspect and it’s about being sustainable internally in terms of how we do our business and the mutual sense of mission. Sustainable in terms of the people we lend to and their role in the communities, and sustainable in terms of the fact that the places that we lend to need to be credible and viable. Operating and growing in a way that isn’t to the detriment of other areas. Mining or tobacco might be an example of short term sustainability but not so in the long term in the sense of people’s health. When you acknowledge that you do have a role in society there is more of a drive to be sustainable if you genuinely see yourself as part of that system.

Curve: Connectivity feels like an important idea in what you do? The connectivity with the future and connecting up a community of savers with the people and businesses they are lending to.
HD: We offer customer days, I went to one in Edinburgh [Scotland] where you have a room with maybe 50 to 100 savers from the region, people from Triodos talking and lunching with the savers in a building that we had lent to. In this case an Arts and Cultural building that we had lent to. The savers were shown around this really quite inspiring building and then various artists and performers and people who were working there. You felt there are so few places you can do this to have the three core groups – the bank, the savers, and the place that you lend to. It makes you realise that it’s not the bank’s money, it’s the savers money and we can’t forget that. If the savers removed their money, it doesn’t operate! We are custodians for this money. To see them enthusiastic about how their money is being used makes that link clear.

We did a survey about a year ago which is quite terrifying really because it showed that about a third of people thought, when they put their money into an account on the High Street, that the bank actually keeps the money in the building. You think that’s crazy but then you think why wouldn’t they think that? The system is so opaque and we don’t talk about how the money system works. The reality is that it goes around the world gets invested and lent and never really stops. That’s what we mean by the conscious use of money, where you put your money is a conscious choice and what you do will have a bearing on how that money is used while you’re not actually using it yourself.

Curve: In your communications you are currently talking about is the concept of ‘small’. That of people thinking that the money is held physically in their bank does suggest a desire for money to feel more tangible, to have a place, that it’s a response to globalization. And it links to Schumacher’s idea that small is beautiful. How are you unpacking that idea of small?
HD: We recently produced a video called “Small is the new Big”. What we were trying to get across there was just that the financial services thing can feel quite inaccessible and it feels so big, and on the news they are talking “trillions” and at one level it becomes meaningless as it’s so far away from people’s daily life.

We are trying to say that all of these numbers are made up of individuals. There’s a huge amount of personal savings in UK.  If you look at that in the context of what different sectors are trying to borrow to lend and the amount of money needed to make fundamental changes, such as social housing or transport, I find it quite inspiring to say, and that’s what we do in this campaign – “Look no one can fix this. The regulator talks about it but ultimately there are 30 millions savers in the UK. If just 10% were prepared to move a proportion of the savings that they hold then the amount of money that gives to Triodos or similar banks to lend to sectors that aren’t currently being lent to, that could have real change.”

Don’t be put off, join other people who are doing this even if you move £10 or £100 it does have an impact and sends a message to the bigger institutions who quite honestly because of their turnovers might be looking at what’s going on and not seeing it as a huge deal. But if 100s of thousands of people start to vote with their feet they might realise that there is something that people want and that could lead to change for good as well.

Returning to the idea of small, just because a business is small doesn’t mean it’s sustainable or viable. There are plenty of small businesses that go out of business. And there are plenty of big businesses that well run. However when you get to a certai size I do wonder how they can be run effectively and how you can bring about change given their scale. I would focus on the mission and values of the organisation first before the size per se.

Curve: “Small” as a concept and value connecting to ideas such as ‘visibility’ and ‘transparency’, the relationship between businesses and savers, there‘s stuff you can do on a certain scale which makes everything visible.  Small in that sense is an idea, a value as much as it’s a practical size.
HD: Yes, that’s a nice way of talking actually, small in the sense with how we interact with our lending customers. As you scale up you face costs in terms of overheads but yes there’s a lot in that. If small is a mentality it becomes amore bout your relationships, with savers, with lenders with people in the business, if you hold onto that and understand what that actually is you should be able to find a way of replicating that in a larger way. Whether you can replicate in a global multinational company I don’t know.

View a selection of images relating to the themes of 'small' and 'sustainable' for business

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