This is the view that he expresses during an interview with Investment Officer, a day after the publication of the results of Triodos Bank's asset management branch. In 2021 Triodos Investment Management's assets under management expanded to EUR 6.4 billion.
Van Ommeren, who took over as chair of the management board from Jacco Minnaar in November, admits that the war in Ukraine and the shortage of commodities have intensified the debate about the energy transition. “Because we have come to realise that we have created a system with huge dependencies. We are being approached from various quarters with requests to join the discussion about how we may accelerate the transition.”
However, an acceleration of the transition does not imply that people who are planning to start investing sustainably will also do this at an accelerated pace, adds Van Ommeren. “I do believe that they will eventually come and find us, but they may first want to wait and see what is going to happen on the financial markets. Due to the current price rises, it has also become more challenging for many people to balance their household budgets at the end of the month. In the short term this can have an impact on our growth, but I believe that in the long term we will certainly be able to keep the upward curve intact.”
Triodos IM only offers sustainable and impact funds, which, because of their sustainability targets, all meet the requirements of article 9 of the SFDR. The fund house is no longer the only one that offers these types of funds. Various other fund houses are now introducing such products. Impact investing is increasingly becoming mainstream.
Van Ommeren: “Mainstream? That remains to be seen. If you look at all the funds that have some reference to sustainability in their titles, very few are Article 9 funds. I wonder what it will be like in a few years’ time, when SFDR has gained more traction. To qualify as ‘a 9’, your fund proposition must indicate explicitly what you want to achieve with your sustainability targets. Fulfilling this promise asks a lot from an organisation. It is not easy for us either, although we do have the advantage that we have been selecting investments in this manner and have been engaging with companies for two decades now. At the same time, we would very much welcome impact investing becoming more mainstream and being fully embraced by the financial sector.”
At first glance, these two ambitions appear to clash: for the financial sector to become more sustainable and at the same time wanting to be a front-runner. Van Ommeren’s response is that it is in fact this clash that keeps Triodos IM on its toes. “Essentially, we want to ensure that the world that we live in remains livable or maybe even becomes a little more livable. When lobbying other stakeholders, we encourage financial institutions to intensify their focus on the environment and social issues. Does that cause a clash? Yes, but that is part of what we are."
“At the same time, we can distinguish ourselves by the fact that through our funds we continue to monitor the innovations that are occurring as we consider the next steps towards creating greater sustainability. The energy transition is one example. We are still involved in wind and solar power generation, but generation is only one element of the energy transition. How can buildings be made more energy efficient or how can we store generated power? It is in fact by also focusing on follow-up steps that are not yet mainstream, that we are still able to stand out.”
In his new role, Van Ommeren sees it as his personal objective to focus his efforts on reaching the net zero target that Triodos has set for 2035. “That is still not plain sailing, as we do not yet know exactly how we are going to achieve this. But it is a clear point that we feel we need to arrive at. You just have to go for it.”
“Funds are a means of achieving something. With the fund investors on the one hand and companies on the other hand, you try to create and leave behind a livable world for future generations. If you don’t reach that objective in one particular year, you will simply have to work even harder.”
Inflow Last year, Triodos Investment Management, which is based in Driebergen, in the Netherlands, owed the increase in its assets under management mainly to “effective mitigating measures as a response to the pandemic and continued confidence among Triodos Investment Management‘s investor base”, as the fund house stated last week in the press release about its annual results.
“Of course our results were boosted to some extent by market growth, because of the strong performance of the financial markets, but the net inflow was also considerable,” explains Dick Van Ommeren, who worked for ABN AMRO MeesPierson until 2015 and recently retired as chairman of the Dutch Fund and Asset Management Association (Dufas). “Sustainable and impact investing are enjoying strong growth. This expansion is broadly based in the market. But we have the added benefit of being appropriately positioned within the sector. All our funds meet the requirements of Article 9 of the SFDR. As a result, the market does recognise us as a party that you should definitely consider if you are looking at sustainable or impact investing.”
The Triodos Impact Equities & Bonds funds (Triodos SICAV l), which invest in listed companies, last year grew almost 25% to just over EUR 3 billion. Furthermore, there as a great deal of interest in sustainable private equity and private debt funds in 2021. The fund house has a total of seven funds in these categories. Triodos Food Transition Europe Fund, which includes private equity investments focusing on sustainable food provision, achieved the highest return of the private funds in 2021, at almost 29%. Triodos Groenfonds, which totals EUR 1.2 billion, had the lowest return, at 0.1%. Furthermore, the global equity impact fund managed by Triodos IM achieved a return of 14% in 2021, while the European bond impact fund returned -3.4%.
This is a translation of an interview originally published on Investment Officer.
Find out more about impact investing and Triodos Investment Management.