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Triodos Investment Management B.V.

PRI reporting framework 2018

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You are in Direct - Inclusive Finance » PIIF Principle 6: Balanced returns

PIIF Principle 6: Balanced returns

IFD 28. How social performance of investees affects decision making and portfolio management

Possible action:

Strive for a balanced long-term social and financial risk-adjusted return that recognises the interests of clients, retail providers and investors.

28.1. Indicate if the social performance of investees affects your:

Investment decision making

28.2. Explain how social performance of investees affects investment decision making.

We first check the investees' commitment to social and environmental goals and GABV Principles of Values-Based Banking, through desktop review. During the following site visit and due diligence process we further analyze their performance on social and environmental issues, using our in house developed Sustainable Banking Assessment tool (SBA tool). This tool helps us in assessing how the investees have embedded their mission and goals in the organization, and the extent to which the investees targets sustainable and responsible financing.

Our tool takes into account the diverse range of institutions, from ‘traditional’ MFIs to larger banks targeting SMEs. It also challenges us and our clients to dive deeper into the role of governance to better determine the transparency, board efficiency, and policy setting of the companies we’re evaluating. A number of important topics are also addressed such as fair pricing, balanced returns, and executive compensation. These themes are grouped in three ESG dimensions: Environment, Social (HR practices, product range, and responsible finance), and Governance.

The result of this analysis is taken into account when making investment decisions, and included in our ongoing monitoring and annual review process.

Portfolio management

28.3. Explain how social performance of investees affects portfolio management.

See IFD 28.2

28.4. Additional information. [Optional]


IFD 29. Staff incentives linked to social performance measures

Possible action:

Strive for a balanced long-term social and financial risk-adjusted return that recognises the interests of clients, retail providers and investors.

29.1. Indicate if your staff have monetary incentives or performance objectives related to responsible investment in inclusive finance.

29.2. Additional information.

Staff has no financial incentives, only fixed base salary. As part of the semi-annual and annual review process we take a broader look at staff performance, including how the employee translates Triodos Investment Management's triple bottom line approach into his/her responsibilities.


IFD 30. Collecting data regarding social outcomes of investees work

Possible action:

Strive for a balanced long-term social and financial risk-adjusted return that recognises the interests of clients, retail providers and investors.

30.1. Indicate if you collect data regarding the social outcomes of your investees’ work.

30.2. Additional information.

We request our investees to regularly (quarterly and yearly) report on their outreach to female and rural clients, the types of financial and non-financial services they offer, the client segment and the sectors they served.


IFD 31. Incentivise investees to track social performance

Possible action:

Strive for a balanced long-term social and financial risk-adjusted return that recognises the interests of clients, retail providers and investors.

31.1. Indicate if you incentivise investees to track social performance.

31.2. Explain how you incentivise investees to track social performance.

As part of our relationship management, we have a continuous dialogue with all our investees and monitor the implementation of social performance management in their daily operations during follow up and review visits. We also require our investees to submit their social performance outreach at a quarter basis as part of our investment agreement.

If we believe there is a need for improvement in this area, we include this in our relationship management, offer assistance using our internal resources, and monitor progress over time.

With our equity investees, we make sure to include these discussions in board and shareholder meetings.

31.3. Additional information.


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