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 policies, programmes and performance. Other ways we have dialogue with companies include:

• Participation at AGMs & follow up meetings
• Performance and reporting feedback
• Proxy voting

Participation at AGMS & follow up meetings

DSM
In July 2007, Triodos Bank representatives Bas Rüter and Ton Rennen met with Dutch chemical giant DSM. The company had invited Triodos Bank after it had raised the issue of renewable energy at the March 2007 Annual General Meeting of Shareholders. According to Triodos, DSM could pay more attention to the use of renewable sources for its huge amount of energy use, which is equivalent to the energy use of one million households. DSM was challenged to set targets, beyond the European Union targets of reducing CO2 emissions by 20% and 20% of energy coming from renewable sources by the year 2020. Reference was made to achievements and targets of sector peer DuPont. At the July meeting, DSM clarified that currently 10% of its energy is derived from renewable sources, 7% of which comes from hydropower. Triodos Bank considers this a good start, and encouraged the company to further extend this percentage. It was also highlighted that caution is needed to avoid controversial hydropower plants, such as the Three Gorges Dam in China. Furthermore, the company showed willingness to explore the purchase of 'green energy', possibly in cooperation with other Dutch chemical companies. Triodos Bank welcomes such initiatives. DSM also explained its plans to further improve energy efficiency, increasing its annual energy savings to over 1%. Triodos Bank will keep in contact with DSM and follow its achievements. Given the company's good record in the field of sustainability, Triodos Bank has high expectations. 

OCÉ
In April 2007, Triodos Bank attended the Annual General Meeting of shareholders of Océ, the Dutch imaging equipment company. In addition to voting on scheduled agenda items, Triodos representative Rosl Veltmeijer raised questions on the company's use of renewable energy and the pubication date of the Sustainability Report. Regarding energy, the company seems to focus more on energy efficiency, as shown by the set targets in this area. Particularly regarding renewable energy, there is no evidence for a target and a mere 2% of the energy consumed came from renewable sources in 2005. The CFO of Océ, Mr. van den Belt, responded that climate change is indeed an important topic for the company. In Venlo, the share of renewable enery has increase from 2% to 10% in 2006. However, targets have still not been proactively set. More details will be gleaned in the 2006 Sustainability Report, due this summer. The Sustainability Report's release was unintentially delayed until after the AGM due to extra work needed on the Annual Report. Mr. van den Belt invited Triodos Bank for a discussion after the Sustainability Report 2006 release to discuss our topics in more detail. Also on the agenda wil be how to handle labour issues in relation to contractors, particularly those in China. In lieu of Océ transfering the bulk of its production capacity from Venlo to Asia, the company also wishes to discuss how other companies deal with labour issues in the supply chain and how contractors can be motivated to apply the same labour standards as Océ.      

KPN
At the Annual General Meeting (AGM) of KPN in 2006, Triodos questioned KPN why it is not part of the Global e-Sustainability Initiative (GeSI). This initiative aims to influence the sustainability debate, informs the public about performance and stimulates technologies that foster sustainable development in the Telecommucations sector. GeSI also cooperated closely with the Global Reporting Initiative to develop a Telecommunications sector supplement to the guidelines. Following the AGM, Triodos was invited for a meeting with KPN to discuss the topic in more detail. As a result, KPN is now a member of the initiative.

TNT
In April 2006, we attended the AGM of TNT in Amsterdam where we questioned TNT about its driving clean strategy and lack of quantitative targets, as well as its distinct lack of code of conduct for subcontractors (more than 40% of the company’s services are performed by subcontractors). In July 2006, we developed this dialogue further and followed up on several of the discussion points raised.

Total
In October 2005, Triodos Bank met with Total, the multinational oil company. The company presented how corporate social responsibility (CSR) fits within its’ business model and gave an introductory presentation in which it discussed, amongst other things, its view on ethics, country risk, environmental footprints, local communities, and climate change and employee dialogue. Several questions were put to the company particularly regarding alternative energy, the company’s presence in Burma, transparency and external verification of its CSR report, and oil spill data. The meeting created a constructive dialogue between Triodos Bank and Total.

Unilever
In addition to actively participating and raising questions at Unilever’s annual general meetings, Triodos Bank has held several face-to-face meetings with the company. To date discussions have centred around Unilever’s implementation and adherence to its’ Code of Business Principles. Other issues discussed with the company include its involvement with Paras Extra Growth Seeds Ltd, improvement to the structure and transparancy of Unilever information, wages on tea plantations India and relationships with labour unions in Brazil.

Performance and reporting feedback

Tomtom
In November 2007, Tomtom was investigated as part of the Communication Equipment sector study, involving 22 global companies producing various devices from mobile phones to network systems. It was investigated whether companies specifically producing wireless devices published policies on the sourcing of Coltan (or tantalum), a material often sourced from the Domicratic Republic of Congo, revenues of which possibly finance conflict in the region. Such a policy on Coltan sourcing could not be found in Tomtom's public reporting, therefore the company was contacted. Through the engagement process Tomtom provided assurance statements, in some cases certificates of origin, directly from its tantalum capacitor suppliers upon our request. The outcome was that Tomtom met the sustainability criteria of Triodos Bank, including protecting non-worker human rights and was therefore selected for ethical investment.      

Wessanen
In October 2007, Triodos Research visited Wessanen in Utrecht, the Netherlands, after the company was selected for Triodos investment funds. In this meeting the company's policies and programs to improve the sustainability of contractors and suppliers were discussed. A point of focus was the issue of deforestation, which according to Triodos investment criteria was not fully developed for a company in the food product sector. Food production companies often make use of raw materials that are behind deforestation problems, for example palm oil. Wessanen is still developing sustainability programs for suppliers and contractors, and the company wants to identify the most important and relevant issues to focus on with such programs. If deforestation is indeed such an issue, a program will be developed. However, most raw materials used are not sourced from sensitive areas; in fact, Wessanen sources its palm oil from organic farms in Italy. Triodos will continue dialogue with the company and follows its progress. 

Stora Enso
In April 2007, Triodos Research met with representatives of Stora Enso, the Finnish paper and forest products company to discuss CSR developments. Included were the provisions taken with regard to new plantations in Ecuador, forestry certification schemes, and its operations in China. Labour conditions and unionisation in China were specifically discussed. With regard to forest certification, the difficulty for small-scale farmers in Finland to become FSC certified was raised. Further, Stora Enso informed Triodos Bank about their efforts to reduce CO₂ emissions. The company uses a lot of biomass for its energy production. However, the company mentioned that it has also deliberately chosen to have substantial participation in an electricity company that produces nuclear power. This is regarded a strategic choice both with regard to electricity prices and to the reduction of greenhouse gases. Following the meeting, Triodos Bank considered the new information concerning Stora Enso's nuclear power involvement. After careful assessment, Triodos Bank concluded that such involvement exceeded the bank's criteria. As a result, from the 1st of August, the company was no longer selected for investment.    

Triodos Bank is often asked to provide feedback on a company’s sustainability or corporate social responsibility (CSR) report. The dialogue can be in the form of a meeting or a telephone interview. Companies value the years of experience we have in investigating and assessing their policies, programmes and performance. The companies that we helped in this way in 2007 include:

• Fortis
• Carrefour