However, the industry’s mainstream growth has also brought with it a raft of investments which many are concerned do not warrant the term ‘impact’. While the industry is without a standardised term for ‘impact investment’, Triodos IM takes impact seriously and goes further by delivering opportunities to invest in companies that are delivering solutions to the global sustainable challenges of today. 

Triodos IM believes in addressing today’s global challenges by investing in companies that are supporting the transition towards a sustainable economy, and identifies these companies using seven sustainable transition themes.

Companies are selected for their vision and commitment to sustainability through an in-depth research process. The strategy is also aligned to the core characteristics of impact investing outlined in 2018 by the GIIN (Global Impact Investing Network).

The good news is that the range of funds Triodos IM manages is growing in the UK and the recent launch of Triodos Sterling Bond Impact Fund brings added diversification to its offering.

“We believe that investing in bonds, when done consciously and with purpose, can have meaningful impact on society and the planet,” said William de Vries, Fund Manager of the Triodos Sterling Bond Impact Fund.

The Bond Fund will invest in corporate, green and social bonds alongside UK government gilts and has a risk rating 3/7 with 7 being the highest risk. The Fund sits alongside two existing equity focused funds – the Triodos Global Equity and Pioneer Impact funds. Bond funds are generally considered to be lower risk and less volatile than equity funds. It will also be operated and priced in sterling (different to the existing equity funds that are Euro-based).  

William de Vries, director of Impact Equities & Bonds at Triodos IM, says: “We wanted to design a product for the UK market that could offer an impactful investment, but at a slightly lower risk than our existing UK fund options for those looking to diversify their portfolio.”

The Fund will include themes such as supporting the evolution of electric vehicles and investing in car manufacturers that are making significant inroads into reducing CO2 emissions in their fleets. It will also be supporting utilities that are producing clean water and investing in businesses that have meaningful social inclusion programmes and are excelling as role models in workplace equality.

Examples of businesses in the portfolio

  • Deutsche Telekom is one of the world’s leading integrated telecommunications companies. It offers smart city and smart home solutions to reduce traffic and energy consumption.
  • Prologis is a real estate company based in the US that leads the pack in terms of environmental stewardship, social responsibility, ethics and governance. The company provides industry-leading energy-efficient buildings.
  • United Utilities provides water and wastewater treatment services in the UK, delivering clean drinking water and sanitary services. The company generates renewable energy from solar sources and sewage sludge for consumption in treatment processes.

Examples of companies outlined above are provided for illustrative purposes are not guaranteed to form part of the portfolio of the Triodos Sterling Bond Impact Fund.

The growing popularity of impact investing is helping to fuel the growth and diversification of investment funds, such as those provided by Triodos IM. The latest Triodos Bank Annual Impact Investing Survey reported that awareness of impact investing is higher than in any year since the survey was started in 2016, with 66% of investors saying they would like to support companies that contribute positively to society and environment.²

“By providing these investments we hope to go that step further towards helping to address the global sustainability challenges and offer solutions which will continue to deliver impact for years to come. Being at the forefront of sustainable banking and finance in Europe gives us an added advantage as does our ability to understand the chain reactions prompted by global sustainability challenges and identify what will help, most sustainably to solve them,” said William.

¹ This figure is an estimate from GIIN. More information is available here.

² 2019 was the fourth year that Triodos had completed a survey looking at impact investing – first conducted in 2016.

Important information

Your capital is at risk and you may not get back the amount you originally invested. The benefits of an ISA depend on your individual circumstances and tax rules may change in the future.

About the Triodos Sterling Bond Impact Fund

Visit the Triodos Sterling Bond Impact Fund page to find out more about the fund.