Dialogue with companies

Dialogue with companies is important to Triodos Bank – it’s one of the ways we differentiate our investment fund activities from other investment funds and we want to help stimulate companies’ contribution to a sustainable society. Not all companies with whom we have dialogue are selected for inclusion in our funds, however being committed to sustainable development means also helping companies less sustainable become more so.

Our dialogue can occur in various ways, the most common being when we are near to completing a sector study. The companies being investigated are often questioned regarding their sustainability performance. Other ways we have dialogue with companies include:

• Participation at AGMs & follow up meetings
• Sustainability performance feedback
• Proxy voting
• Pushing the sustainability agenda

Participation at AGMS & follow up meetings

Arcadis
15 October 2009 - Meeting with Arcadis. After Triodos raised the topic of linking remuneration to sustainability targets at the Arcadis AGM in April, a more in depth discussion took place with the Chief Executive Officer (CEO) and the Director Investor Relations of the company. According to the CEO, Arcadis employees usually don't need incentives to commit to environmentally and socially responsible behaviour. Triodos acknowledges this to some extent, but also observes that Arcadis stimulates its senior management via a variable component of its remuneration policy, without clear linkage to sustainability targets. Arcadis explained that the variable component depends on progress made on its so-called ‘Balance Score Card’. For the scores, sustainability issues also matter. Triodos explained that this link is not visible to the outside world, nor is a credible relative weight of sustainability indicators proven, and we challenged Arcadis to do so. Additionally, Triodos suggested other diversified indicators that could be used for remuneration linkage to sustainability, such as CO2 emissions, incident rate, customer satisfaction and environmental effects of the projects that Arcadis carries out. The company will take our suggestions into consideration. 

Vodafone
10 September 2009 - Vodafone requested a teleconference with Triodos to follow up on the questions raised at the AGM. Vodafone recognises the need for clear interim targets and they are incorporating them in 2009 and 2010. Other targets in the Environment Area this year include increasing the number of machine to machine connections that reduce CO2 emissions, developing joint CO2 measures along the supply chain, engaging with the CDP on supply chain initiatives and getting suppliers to disclose targets and engage in joint CO2 reduction strategies. Vodafone gave more details on its climate change and handset recycling programmes, and requested input on best practice for creating a more formal link between remuneration and sustainability performance. Triodos and Vodafone will continue to communicate on these issues. 

Vodafone
28 July 2009 - Triodos attended the Vodafone AGM in London on the 28th of July. The company is already a sustainability leader in the telecoms/wireless sector, and Triodos raised questions about areas that Vodafone could further improve on. First, Triodos asked about the obsolescence of electronic products and how Vodafone is working with suppliers to reduce the waste caused by frequently replacing handsets. Second, Triodos asked about Vodafone's short term targets for reducing CO2, CFC and HCFC emissions, and for increasing renewable energy use - the company already has relatively strong climate change programmes, but it does not publish short term goals to monitor feasibility and accountability in this area. Third, Triodos asked about linking remuneration to sustainability performance. The company already includes a 15% 'customer delight' component in its remuneration strategy, but Triodos encouraged Vodafone to increase this to 50% and establish clearer links with sustainbility issues, such as emissions and energy use. 

TomTom
1 July 2009 - Meeting with TomTom. Following the comments that Triodos had made at the AGM of 28 April, a meeting took place at TomTom's headquarters in Amsterdam with the CSR responsible board member and the corporate CSR director. The company focuses on three sustainability areas: safety, environment and supply chain management. By the character of the company's main products, personal navigation devices, TomTom directly contributes to better safety for its clients (no distraction by paper maps, less time spenditure in traffic) and reduction of CO2 emissions (16% less energy use). Triodos values these effects but challenged the company to extend the green character of its products to a more corporate green branding. By implementing sustainability in all its processes TomTom can distinguish itself from its peers and create long-term value for its shareholders. Triodos repeated its suggestions made at the AGM: clear targets and reporting about CO2 emissions, green energy use at corporate and suppliers' facilities and a linkage between long term incentives of the management and the sustainability performance of the company. The company's representatives showed interest in Triodos approach and promised to come back on the issues that were raised.

Arcadis
7 May 2009 – Questions were put to the board of Arcadis about its environmental programmes and remuneration. Considering that Arcadis has been operating in the environmental consultancy market for years, we stressed already some years ago that it is important for the company to have strong environmental programmes for its own operations. Therefore, Triodos Bank welcomes the environmental programme that Arcadis introduced in 2008. With this programme, Arcadis sets an example for its clients.  But we think that the programme can still be improved by including more targets. One of these targets could be on the use of renewable energy. Furthermore, we asked the company to link management remuneration to long-term sustainability targets.

Wolters Kluwer
6 November 2008 -  As a follow up of the questions we raised at the Annual General Shareholder Meeting of Wolters Kluwer, Triodos representative Rosl Veltmeijer met with the Project Manager of Wolters Kluwer to discuss progress on environmental performance and more specifically on the use of recycled and/or certified paper. Also the general sustainability performance of Wolters Kluwer was discussed. When starting with sustainability Wolters Kluwer focused almost exclusively on social topics. The ambitions and performance of these social issues are reflected in the sustainability key performance indicators of Wolters Kluwer. The company's ambitions in this field are also reflected by its appraisal system, which is based on business values. During the meeting it became clear that Wolters Kluwer has now started to look more in detail into the environmental performance of the company, particularly the environmental performance of suppliers. The company is gathering data about paper suppliers and paper use for its printed products, and looking at energy, water, chemicals (a.o. for coatings) and ink used by suppliers. As part of this process the company will also develop a global environmental policy. It will take time for Wolters Kluwer to gather all data, to streamline its procurement process and to set quantitative targets. In the meantime Triodos will maintain contact with the company and will closely follow progress made.

KPN
28 October 2008 - Triodos was invited for a stakeholder dialogue at KPN, about the company’s new CSR approach and its 2007 sustainability report. Representatives from financers, NGO’s and other companies discussed the new CSR policy and the report in small groups. In its new approach, KPN chose three key themes that are considered relevant for the telecommunication sector: People Connected, about social exclusion or isolation; Keeping the Netherlands on the Move, which focuses on balance between work and home as well as mobility; and Responsible Energy Use. Triodos welcomes this new approach and considers the new themes very relevant. Triodos recommended KPN to implement the key themes group wide, and make them more concrete instead of translating them in single projects as described in the 2007 sustainability report. Triodos is confident that KPN will take the CSR approach to a higher level.

Tesco
27 June 2008 - Triodos takes aim at Animal Welfare. For the first time ever, Triodos has undersigned a shareholder resolution aiming at increasing the accountability of companies towards sustainable business. At the Tesco Annual General Meeting of Shareholders, a shareholder resolution requested that the company set a commitment within a fair time frame to take appropriate measures to ensure that chickens purchased for the sale by the company are produced in systems capable of providing the 'Five Freedoms'. The 'Five Freedoms' are a principles-based standard laid down by the Farm Animal Welfare Council and endorsed by Tesco in its Animal Welfare Policy. We had an impressive result from shareholders - almost one fifth of voting shareholders voted against Tesco. The combination of shareholders who voted for and those who abstained was 19% - representing almost 1 billion shares. This means that we have gained the support of some of Tesco's biggest institutional shareholders. At the AGM, Tesco said that they would be happy to participate in an industry-wide forum to consider new welfare standards for poultry.