Work process

The selection of listed companies for inclusion in the Triodos Investment Universe is an exact process. Triodos Meerwaardefonds NV, Triodos Values Funds and Triodos Bank Private Banking invest in companies that meet our social and environmental criteria. Companies are screened against a large number of different criteria. The process consists of the following steps:
 
Step 1: sustainable activities
Sustainable products or services are defined as services that contribute to a clean earth, climate protection or healthy people. Because these activities make a significant contribution to sustainable development, these companies are not subjected to step 2 of the selection process. Companies that derive over 50% of their revenues from sustainable products or services qualify for inclusion in the Triodos Investment Universe.
 
Step 2: identification of best-in-class
Companies that do not supply typically sustainable products or services may be eligible for investment if they are considered to be best-in-class in Corporate Social Responsibility (CSR) in their sector. To determine if a large cap company is best-in-class, its sustainability performance is scored, based on at least seventy generic and sector-specific sustainability criteria. These criteria are grouped into three themes that cover Environmental, Social and Governance (ESG) issues.
The total sustainability score of a company is subsequently compared with that of other companies within the same sector. The 50% best scoring companies in a particular sector may qualify  for inclusion in the Triodos Investment Universe.
For the Triodos Values Pioneer Fund, we take it a step further for small and mid cap companies that do not supply typically sustainable products or services.  When a company is considered to be a true leader in sustainable business  practices in its sector, it may be eligible for investment as a CSR-leader.
 
Step 3: minimum standards
Following the selection of specifically sustainable companies (step 1) and the identification of the best-in-class (step 2), companies are assessed against Triodos Bank’s own minimum standards. None of the companies selected for inclusion in the Triodos investment universe may be involved in activities that materially prevent the long-term development of a sustainable, virtuous society. 

In the research process, our analysts make use of a wide range of public and proprietary information sourced from companies, governmental and non-governmental organisations, news services and research institutes. Our process is rigorous and systematic and aims to ensure a comprehensive review of relevant information sources and a coherent and sound analysis.

For more information about recent research activities, visit the Research & Dialogue News page.