Triodos Bank has set an ambitious goal to achieve net-zero emissions by 2035. Founded in 1980 as an independent banking institution, Triodos has been a frontrunner in sustainable banking for four decades.
On the second day of COP26’s World Leaders’ Summit, the bank declared its commitment to this target. Utilizing a science-based targets approach, Triodos plans to significantly lower the greenhouse gas (GHG) emissions associated with its loans and investments. Any remaining emissions will be offset through investments in nature-based projects that actively remove GHGs from the atmosphere.
This initiative aligns with the Partnership for Carbon Accounting Financials (PCAF) methodology and supports the Paris Agreement’s aim to limit global temperature increases to 1.5 degrees Celsius.
In an exclusive interview at COP26, Bevis Watts, CEO of Triodos Bank UK, emphasized the thorough review of their decarbonization strategy: “We meticulously analyzed our challenges sector by sector. Our pathway is being verified by the Science-Based Targets initiative (SBTi), and we will methodically assess our plans and progress. Our impact reporting already adheres to the United Nations’ Sustainable Development Goals (SDGs), and the PCAF methodology, recognized by TCFD, will serve as the backbone for our net-zero reporting.”
Strategic Initiatives for Achieving Net Zero
To realize its aim, Triodos Bank will implement several key strategies:
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Enhancing Energy Efficiency for Mortgage Clients
As residential mortgages account for 21% of the bank’s portfolio, Triodos will assist clients in making their homes more energy-efficient and promote the use of sustainable materials in construction and renovation. -
Promoting Biodiversity Through Investments
The bank aims to ensure its future portfolio fosters biodiversity, focusing on natural capital, nature-centered finance, regenerative agriculture, and carbon sequestration. -
Investment in Renewable Energy Infrastructure
Triodos will finance projects related to energy generation, storage, and green jobs, steering towards a fully renewable energy sector. - Reducing Carbon Intensity in Investments
This encompasses all forms of listed and private debt and equity investments, aiming to limit carbon emissions.
Triodos plans to evaluate its progress in 2025 to determine the effectiveness of its strategies and make adjustments as needed.
Watts stated, “Our target is ambitious. The fact that we believe achieving net-zero by 2035 is possible—even after eliminating fossil fuel exposure—highlights the broader challenges the financial industry is facing today.”
A Proven Commitment to Climate Action
This announcement reinforces Triodos Bank’s dedication to enhancing environmental outcomes. In the previous year alone, the bank financed renewable energy and energy-saving initiatives, avoiding emissions equivalent to 5.7 billion kilometers driven by car.
Additionally, it supports forestry and ecological development projects, which have sequestered about 14,000 tonnes of CO2, equivalent to the impact of around 316,000 mature trees. The bank deliberately excludes fossil fuels and environmentally harmful businesses from its investment strategy.
Watts concluded, “We hope the finance sector recognizes that achieving net zero, even from a low carbon baseline, is challenging and demands swifter action. Transparency is crucial, though we don’t have all the answers. Addressing climate risk within financial regulation is too slow; we need mandatory, science-based targets aligned with the 1.5C goal, along with mandatory transition plans for a rapid and equitable transition.”