After screening companies for positive impact, the selection is further reinforced by the application of our
minimum standards, which are internally developed and regularly updated.
The main objective and rationale of minimum standards is ensuring that we do not invest in companies offering products or adopting behaviours that clash with our vision and beliefs.
Companies that are developing and producing solutions related to renewable resources vary from renewable energy producers to utilities (water utilities), producers of paper and forestry products, specialty chemicals companies (e.g. bioplastics), as well as companies active in related industries including semiconductors, industrial machinery, and electrical equipment. For these companies, we currently apply minimum standards on the following: Triodos IM will only invest in companies that adopt an overall sustainable strategy. Sustainable products can never be a reason to neglect other negative impact for example corporate governance violations or practices that are not respectful of human rights. A few examples will explain this approach further:
Biomass is only acceptable when highly efficient and produced with waste streams. Using food crops or fresh wood for biomass energy is not acceptable for us.
Mining and conflict minerals
Many innovations in electrification, including renewable energy devices like solar panels, contain rare minerals. The mining of those minerals is often conducted under very difficult circumstances and in emerging markets or remote areas. Violations of labour rights (safety issues, child labour and long working hours) are common. In addition, some minerals like Coltan come from DR Congo and neighbouring countries, where profits are used to finance local armed conflicts. Triodos requires companies’ responsibility for safeguarding human rights and labour rights, and the avoidance of conflict minerals.
We do not invest in the production or retailing of energy from fossil fuels nor in the mining of coal and in products and services directly related to energy production and coal mining. We do accept a minor involvement in these activities (representing less than 5% of the company’s total revenues) if the company clearly fits into one of the seven transition themes and meets Triodos Minimum Standards.
Nuclear Power is excluded from investments. It does not come from renewable resources and there are still concerns about safety and nuclear waste. Nuclear power is also a very expensive energy source. Considering the large need for renewable energy finance, we focus on this activity.
Arms are not the first topic that comes in mind when looking at renewable resources. Yet this topic can be relevant for companies active in the related industries important for renewable resources, e.g. semiconductors, electrical equipment, and industrial machinery.
Arms are not the first topic that comes to mind when looking at renewable resources. Yet this topic can be relevant for companies active in the related industries important for renewable resources, e.g. semiconductors, electrical equipment, and industrial machinery. We track controversies related to our minimum standards for all companies we invest in and engage with companies on material controversies that violate our minimum standards or that could lead to a breach of our minimum standards, e.g. following a merger.