Triodos Bank: “Impact is understanding the consequences of the actions that you take”

With the world’s leading climate scientists warning we have just over a decade to ensure that the devastating effects of climate change are kept to a minimum, a paradigm shift is imperative from all sectors of society – from individuals and pressure groups, to banks, businesses, governments and international organisations. As said by Bevis Watts, MD of Triodos UK in an interview by Sustainable Brands, “money is the most powerful tool for change” and are beginning to realise that one of the world’s most powerful systems – the banking system, can have a huge impact on the wider society, depending on where banks are “channeling their finances”.

In this interview, we find out what Triodos’ Edinburgh-based Relationship Manager, Alan Miller, has to say about impact, consumer trends, and the business case for purposeful business. A B Corp since 2015, Triodos has lent to over 700,000 customers worldwide and have supplied over £5.9 billion worth of loans to projects benefiting both people and the planet. The bank is a Scotland CAN B Ecosystem Partner, and Alan is a B Leader. 

1.   What is impact and how do you measure it?

Impact is understanding the consequences of the actions that you take. Traditionally, business has been focused on financial consequences but more and more people are becoming aware of their social and environmental impacts and the consequences of the decisions that they make.

In order to grow as a business, must be aware of these things as it is going to affect how you are able to trade in the future. In terms of how you measure it,  it depends on the purpose of the organisation but ideally, you’ll take the many strands of impact into consideration – you’ll look at environmental impact, the impact of people around you, both within your company and externally within the community that you are operating in.

In terms of Triodos, our bigger impact involves an accumulation of all or customer’s impacts –  we are helping to fund the positive impact that our customers have – whether that’s green energy projects, providing affordable social housing, culture projects, or organic and sustainable food networks. The sum of all our customer’s activities is part of the impact Triodos can make.

2. According to Forbes, investment analysts at All Street found that businesses with social impact generate higher returns than their non-impactful counterparts. Is this something you have found?

Yes. I think it has to be, I think it just makes sense that that would be the case. Measuring and monitoring impact involves planning for the long-term and doing that builds resilience into your business. Equally, people like to feel like they’re doing something good with their work, so again if you’re measuring impact and showing that you are doing something good, you’re going to end up with a more engaged workforce. All these things really push business growth and productivity so I think measuring impact will obviously have that effect.

Image: Triodos customer, Comrie Croft, Perthshire

3. Using examples from organisations that you lend to, what are the things that set them apart from organisations that wouldn’t traditionally bank with Triodos?

I think there are a few things – resilience is key. Our customers really believe in what they’re doing.

Every business has cycles – it’s not always rosy all the time, but there is a real determination in our customer base when things aren’t so good to really stick to their beliefs, dig their heels in and push through what they’re doing and that leads to innovation.

When you are focused on making a positive social, environmental or cultural impact, you must recognise that to continue doing that you need to be generating income, and so you need to think of innovative ways to do that whilst sticking to your values. We have quite a creative customer base in that regard which again helps us with resilience.

We as an organisation like to publicise the businesses that we lend to, helping them to engage with us as we are broadcasting their good news and work. I also think there’s engagement with the local area which is important. There is a lot of good-will from local communities towards organisations that bank with Triodos, as they are often focused on community engagement. I think it’s innovation, resilience, local goodwill, and it’s engagement both with ourselves and with their local communities that sets our customers apart.

4. We are increasingly seeing that consumers are becoming more socially and environmentally conscious than ever before. What do you think is driving this trend and how do you think business can capitalise on it?

There has definitely been a tipping point. I think that certain businesses have pushed things a bit far. People have started to question how things can be made so cheaply, and how environmental damage can appear not to be a problem for certain businesses. I think that’s led to questions being asked about business practice and coupled with that, with new technology and different forms of media it’s becoming easier to learn about business practices, forcing transparency.

It’s quite hard to argue for harming the planet, for causing harm – it’s difficult to make a case for that. So as people better understand what’s happening around them, word spreads, affecting people’s consciousness.

Consumerism is huge and money is a form of democracy – what you do with it drives business behaviour. So if you’re willing to spend in an area that doesn’t have good practice, you’re going to encourage that. If you spend with businesses that are impactful, that creates a demand which can shape business behaviours.

5. The demand for socially responsible business is changing the nature of business more generally, what are your favourite examples of how this is being done?

My favourite example is when money is used as a lever to shape the way that business is done – and that’s what we as a bank like to try and do. We are working with an organisation at the moment who are performing fantastically financially. Initially, they hadn’t thought of sustainability in any detail for their business, then we introduced them to green tourism and now they have a 150-point-checklist on it – the founder seems to be blown away by it and can’t believe he didn’t think of it before! Now it’s going to be written into his loan agreement that he’s got to engage with green tourism and achieve their gold standard. So I love it when Triodos can use money as a lever to shape better business behaviour, and equally as well I love it when businesses do that. If they look through their supply chain and say to other businesses ‘if you want to continue to get my business, you need to look at these things” – it’s great when that’s taken on board. And again, it’s great when consumer demand shapes the way a business thinks. I love that concept – whether it stems from an individual or a business, but certainly when it’s a bank that deals with money all the time and uses that to shape a better economy.

Image: Triodos customer, Coffee Apothecary, Aberdeenshire

6. For some businesses, it may seem as though being socio-environmentally considerate is something to be done ‘after the fact’. What are the incentives for mainstream businesses to incorporate it into their mission statements?

I think businesses have recognised that their customers like working with businesses that care about the environment and local community, but they’ve almost tried to leverage that as a marketing tool, as opposed to actually being sincere about it. I think people are starting to see through that now.

Embedding it into your mission statement if possible helps people to realise that you’re serious about impact, but equally, from the point of view of succession and continuity, it lays down a marker for the business that these are the values that we operate to. So whoever ends up at that business know that this is the framework that they’re working to, and that’s a powerful thing in terms of how the business is managed.

When you really ingrain impact into the fabric of a business, that’s when you really start to see the positives that come from measuring and making a positive impact – employee engagement, resilience innovation, long-term planning – all that good stuff comes.

To learn more about Triodos and their customers, head to their website. To see how your business benchmarks in terms of impact, be sure to take our 30-minute Quick Impact Assessment today.

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