Making the world more sustainable, by investing in the energy transition, a more sustainable food system and better protection of our natural resources. This is the mission of Triodos Groenfonds, one of the oldest and most sustainable funds in the Netherlands. And Bulsink says he feels very much at home here. The investment expert - who took an unusual sidestep in his career as a bamboo bikes entrepreneur in Asia - has worked at Triodos Investment Management since 2020. "Sustainability through finance is a powerful force for change."
Bulsink has found a fund fully committed to that change, one that puts capital to work to accelerate the energy transition and make the economy more sustainable. “As a fund manager, I quickly noticed how many stakeholders you are dealing with, including the numerous projects we invest in, the fund's distributors and investors. The scope of the projects is also wide, from sustainable district heating and cooperative wind farms to organic farming."
The fund manager also faced immediate economic headwinds. After years of stable returns, the value of the loan portfolio has come under pressure due to rising market interest rates. This is not unique to Triodos Groenfonds and plays out across all investment funds with a fixed interest loan portfolio. Conversely, new loans can be issued at higher interest rates. Bulsink: "Our message to investors is to keep looking at long-term impact, risk and return. Then you'll see a success story of innovation and transition, with stable returns over the long term. In this regard, our projects are performing very well. Around 70% are in renewable energy, and they are seeing the increase in energy prices reflected in their results."
Investing in sustainable innovation through the Green Projects scheme
Triodos Groenfonds provides loans on favourable terms within the Dutch Green Projects scheme. Bulsink: “We help sustainable and innovative entrepreneurs to raise capital to achieve growth. That's how we make a difference." The Netherlands' oldest green fund has invested assets of EUR 900 million, spread over 370 sustainable projects.
Triodos Groenfonds invests at least 70% of that capital in projects within the Green Projects scheme. The government selects sustainable sectors in energy, mobility, the circular economy and agriculture for this purpose. The green scheme helps to boost projects in these sectors, driving sustainable transitions. Depending on individual circumstances, investors in the fund may be eligible for a tax benefit in return: an exemption in Box 3 in which investments are taxed, plus an additional tax credit of 0.7% of the amount invested. In 2022, investors are allowed to make green savings or investments of up to EUR 61,215.
Sustainable projects are now attracting more mainstream capital, so is the Green Projects Scheme still necessary? Bulsink: "The scheme is still doing a good job by encouraging sustainable innovation. The tax benefit will remain in place for at least the next three years. However, I expect that the government will continue to support the sustainable transition with this scheme beyond that point. And the tax benefit is not the only reason why customers invest with us. They invest due to the impact we achieve together, at the forefront of the sustainable transition."
How Triodos Groenfonds maintains its pioneering role
Bulsink sees it as his mission to maintain Triodos Groenfonds' pioneering role. "You want to operate where you bring the greatest added value and truly accelerate the sustainable transition. We played a clear leading role in funding wind and solar energy. These projects are now being embraced by major financial institutions and are therefore ensuring capital."
The fund prefers to invest in the new vanguard of the sustainable transition, such as in the circular economy, batteries for large-scale energy storage, biodiversity and sustainable district heating. These are mostly new markets that a lot of parties are not yet willing to invest in, partly because they are driven by smaller innovative companies. By investing, Triodos Groenfonds encourages progress and sets the expectation that others will follow. "Consider things like batteries with greater storage capacity. They allow us to store renewable energy for when there is no sun. The circular economy is also often linked to technological solutions, such as the reuse of appliances, raw materials and waste," says Bulsink.
Triodos Groenfonds now invests around 5% to 10% of its assets outside the Netherlands, based mainly on a list of countries where support is most needed. Bulsink: "After all, climate change does not end at the Dutch border. These projects often offer attractive returns, and one euro in Africa can have a greater impact than one euro in the Netherlands. Imagine the social and economic impact when a remote village in Africa gets access to renewable electricity. The village no longer needs to cook on charcoal or wood which is safer and protects the forests. It is a privilege that we can achieve this impact together with our investors."