In 2021, we set an ambitious goal: achieving net-zero by 2035 factoring in greenhouse gas emissions of all Triodos Bank's loans and funds’ investments. Since 2020, the greenhouse gas emissions financed by our loans and investments has reduced significantly by 28%. This means that we are well ahead on our emission reduction targets.
We are leading the way, but also value transparency and integrity
Keep calm and carry on, one could say. But as transparency and integrity are key business principles for Triodos Bank, we have come to the conclusion that we cannot make a claim that is not fully aligned with the current direction of standards and regulation.
Here is what is happening. The rules regarding what net zero means have changed since our net zero target was set in 2021. The most important difference for us is that it is now uncertain to what extent the CO2 captured in nature projects that we finance can be used to balance the greenhouse gas emissions of our loans and investments.
Want to learn more about net-zero and the terms mentioned in this article? Visit the Science Based Targets initiative (SBTI) jargon buster
So, while we are well ahead of our reduction targets, we believe that we cannot stick to our claim to be net-zero 2035, for now. We have always said it was an ambitious goal, being open and sharing our learnings is also part of being a frontrunner. We need to act on progressive insights with our climate strategy and wider developments in climate science and not be afraid to take bold actions to stay on course.
For banks, it is working on the reduction of financed emissions that is most significant. For Triodos Bank, financed emissions currently make up more than 99% of our total emissions. Operational net zero goals are important – such as reduction of business flights, emissions from buildings and computing – however no financial institution should be shying away from their financed emissions.
Is net-zero the real hero? We believe the world needs more...
No longer making a net-zero claim does not change anything about our commitment to climate action. In fact, we think more is needed, because the lack of climate action has led to raging wildfires, extreme heat, and devastating floods— impacting communities, ecosystems, and economies worldwide. Change needs to happen now, so instead of just postponing our net-zero claim, we are doubling down on absolute emission reduction of our entire portfolio and intensifying our financing of real climate solutions in the coming 5 years.
Here’s how we are stepping up our game, short-term
We are choosing to act now, rather than aiming for a distant ambition in 2050. For 2030, we aim to reduce our emissions by at least 42% instead of the 32% we previously announced. These reduction targets are in line with a Paris-aligned 1,5 degrees-scenario. Secondly, we have committed to financing €500 million in Nature-based Solutions by the end of 2030, supporting climate, nature and communities. Thirdly, we will be stepping up our game by financing more innovative solutions to accelerate the energy transition before 2030.
As part of achieving some of these targets we will push for regulatory change, improved government policy and new frameworks that will support the growth of these sectors. The nature-based solutions market in particular is still nascent and emerging but it must scale quickly. Market standards are required that help projects to thrive with bankable income streams.
In short: let’s prioritise real emissions reduction and meaningful climate action, together
We will continue to actively advocate for meaningful climate action in the financial sector, for which the key is to phase-out fossil fuels such as oil, coal and gas. We believe there is a moral responsibility for banks to stop the financing of climate destruction. We invite everyone to join us in prioritising real reduction and real climate action now.
Triodos Bank remains steadfast in its commitment to climate action. While we are no longer making a net-zero claim, our dedication to reducing emissions and financing real climate solutions is stronger than ever. We believe that immediate and substantial action is necessary to combat the devastating effects of climate change now and in the future.
By intensifying our efforts and setting ambitious targets for the coming years, we aim to lead by example and inspire others in the financial sector to prioritise real emission reduction and meaningful climate action. Together, we can make a real impact and create a sustainable future for all.