SAAT, as well as Depository Receipt Holders, were able to take note of the voting items on the agenda of Triodos Bank's annual general meeting of shareholders (AGM) to be held on 17 May 2024. During the Depository Receipt Holder meeting on 15 April 2024, SAAT gave Depository Receipt Holders the opportunity to ask questions and submit comments on the voting items on the AGM agenda. SAAT used this input to finalise its voting statement at this meeting.
SAAT determines its position on voting items on the agenda of Triodos Bank's AGM based on the interest of Depository Receipt Holders, the interest of Triodos Bank and the interest of the mission. SAAT will only vote at the AGM on behalf of those Depository Receipt Holders who have explicitly given SAAT a proxy to vote for them.
SAAT's meeting took place over a month before Triodos Bank's AGM on 17 May 2024 to ensure that Depository Receipt Holders can have a real influence on SAAT's vote at the AGM. This also means that, based on this voting statement, Depository Receipt Holders have ample time to give SAAT a voting proxy or choose to speak and vote themselves at the AGM.
The voting items on the AGM agenda were grouped together for discussion during the Depository Receipt Holder meeting. The groups of agenda items were as follows: results agenda items, legal agenda items and governance issues agenda items. SAAT outlined its voting intention for each voting item in the group and the reason for each voting intention. Then there was an opportunity for questions and input during the meeting. These questions and comments have been incorporated into this voting explanation where appropriate.
Agenda item grouping "Results"
Agenda item: 2d. Adoption of the annual accounts 2023
SAAT took note of the annual report and its notes. In the context of discharge (agenda items 4a. and 4b.), SAAT discussed the bank's policy more broadly as described in the annual accounts. The annual report and accounts provide insight into Triodos Bank's results in 2023. They are the starting point for the future. SAAT assesses the annual report and accounts from the threefold perspective: the interest of Depository Receipt Holders, the interest of Triodos Bank and the interest of the bank’s mission
The report sets out the bank's strategy with the three themes of 'One bank', 'Unlocking our purpose' and 'Frontrunner in responsible finance'. The bank must offer all its stakeholders the opportunity to contribute positively to social sustainability: as a borrower, as an employee, as an investor, as a supplier, as a business partner and certainly also as a Depository Receipt Holder. Positive energy is needed more than ever. This coincides with frontrunner position in the financial sector. The bank has made a formidable contribution to the breakthrough of sustainability thinking in financial services. That battle is far from over and is more topical than ever. But it is precisely Triodos Bank's interim success, and with it the bank’s declining exceptionality, that at some point calls for a rethink of this role and its solidity as a foundation for the future.
Triodos Bank's financial results for 2023 were more than satisfactory. As Triodos Bank focuses on lending to the real economy, its performance will always be significantly determined by interest margins. Due to changes in the international and monetary environment, interest margins were exceptionally high in 2023. This led to a sharp increase in Triodos Bank's net interest income. At the same time, there was a controlled increase in costs. Together, these factors ensured that 2023 was a record year in terms of profitability, with the Cost-to-Income Ratio falling sharply to 73% and a return on equity of 6.1%.
In light of ongoing discussions with Depository Receipt Holders, it is satisfying that Triodos Bank has decided to return 75% of this profit to Depository Receipt Holders in the form of dividends. However, much of these good results are due to improved interest margins, which are largely out of the bank's control. The bank has made cost savings and efficiency improvements that will improve profitability in the long run. These improvements were overshadowed by increased compliance and legal costs in 2023, but still provide a good basis for structurally better financial performance in the longer term.
Using money to make a positive impact on people and the planet is Triodos Bank's core mission. Assets under management with which impact can be made have grown from EUR 22.6 billion to EUR 23.2 billion. The five transition themes provide a solid foundation. On these five themes: energy transition, resource transition, food transition, societal transition and wellbeing transition, the bank this year not only provides figures, but the annual report also contains compelling client stories.
The prism tool, which the bank uses to map the impact of projects, is now also available on an app for customers. This gives them better insight into their positive and negative impact. This development is also important for "AsOneToZero"; the bank's target of net zero for its own operations and those of customers by 2035. The annual report shows that the bank is well within the intermediate target for net zero. Triodos Bank will measure its impact even more thoroughly through collaboration with the Impact Institute. Triodos Bank started with its renewable energy portfolio in 2023.
Triodos Bank is committed to active lobbying both internationally in Europe and in the Netherlands. This is important because opposing forces are growing. Triodos Bank is the first bank to join the global campaign for a fossil fuel non-proliferation treaty. Triodos Bank is number 3 in the global sustainable banks ranking.
SAAT indicated at the meeting that it lacks detailed information on investment performance, making it difficult to compare results with the rest of the market. During the AGM, SAAT will address this.
In order to remain a frontrunner, Triodos Bank has also spent the past year redesigning its Triodos Operating Model. This is to become a more effective and efficient organisation across the five different countries. The aim is to create 'One bank, one team, one mission'. The outcome of this redesign is that Triodos Bank will continue to focus on continuous improvement, efficiency and development and expects the same from its co-workers.
In addition, Equity, Diversity and Inclusion (EDI) is a major focus of the human resources policy within the annual report. Triodos Bank's ambition is to be a diverse organisation, reflecting the 'communities' in which it operates as well as its customers. An important step was taken last year by developing an EDI policy. With this, Triodos Bank aims to achieve three objectives, namely in the area of gender, creating awareness about this topic and inclusive recruitment and appointments. According to SAAT these valuable objectives can still be made more concrete.
Triodos Bank has an international remuneration and appointment policy for its co-workers. This policy assumes a fair, modest remuneration that facilitates co-workers to maintain good way of life and make a social contribution on the one hand, and to act within the financial sector on the other. The ratio between the highest full-time salary and the average salary was 4.9 in 2023, well below the maximum of 7.
Finally, despite the turbulent times, employee engagement remains high at 7.4 and 83.5% are proud of the bank. Quite an achievement, but above all very valuable to note that employees remain unabatedly committed to their bank's mission.
SAAT intends to vote in favour of adoption of the annual accounts.
Agenda item: 3b. Dividend for 2023
Triodos Bank's proposed dividend is EUR 2.84 per share or depository receipt. The total dividend for 2023 is EUR 4.07 per (depository receipt for an) ordinary share, including the previously paid interim dividend of EUR 1.23 per (depository receipt for an) ordinary share or 75% of the profit available for distribution. The total dividend for 2023 therefore also far exceeds what has been paid in the previous years. SAAT sees this as a welcome gesture towards the Depository Receipt Holders who have experienced such difficult years.
SAAT intends to vote in favour of the dividend proposal.
Agenda item: 4a. Discharge of members of the Executive Board in office during the financial year 2023 for the performance of their duties during 2023
and
Agenda item 4b. Discharge of the members of the Supervisory Board in office during the financial year 2023 for the performance of their duties during 2023
The next item on the agenda is the discharge of Executive Board (EB) and the Supervisory Board (SB) for the policies pursued and supervision exercised respectively in 2023, as reflected in the 2023 financial statements and announcements made at the General Meeting. The discharge relates only to 2023 not to acts or omissions from previous years.
SAAT, as mentioned above, is generally positive about the bank's business performance over the past year. It is therefore all the more regrettable that the introduction of the new trading platform in 2023 was so disappointing in terms of transaction volume and price performance, and that the platform also leaves much to be desired in terms of accessibility.
The bank's EB, partly at SAAT's insistence, has initiated a detailed quantitative and qualitative evaluation of these experiences. SAAT is counting on the EB to report on its findings and conclusions no later than the AGM, including a convincing action plan with clear timelines.
On that basis, SAAT intends to vote in favour of discharge of EB and SB.
Agenda item grouping "Legal"
Agenda item 6. Authorisation of the Executive Board to acquire shares and depository receipts for shares in Triodos Bank N.V.
An authorisation to the Triodos Bank board to acquire shares or depository receipts for a period of 18 months is a common decision for companies like Triodos Bank. Granting this is in line with policy in recent years. To use this power, Triodos needs prior approval from the DNB. and must make public announcement. As a result, after SAAT's consent, the use of the power is still subject to supervision and safeguards.
SAAT intends to vote in favour of granting the authorisation.
Agenda item grouping “Governance”
Agenda item 7: Multilateral Trading Facility: evaluation
Although not a voting item, this is obviously an important and topical issue. Described above is what we expect from the Executive Board on this point. After discussing the groups of agenda items with Depository Receipt Holders, SAAT concluded to vote in favour of all items on Triodos Bank's AGM agenda.
SAAT’s voting statement regarding voting items on Triodos Bank's AGM agenda
This is a translation of the Dutch voting statement
