Three questions to ask your banker
If you are committed to sustainable construction, you probably pay close attention to the CO₂ emissions linked to materials and techniques. But did you know that money also has a carbon footprint? Your bank is, after all, a fully-fledged player in your value chain. Here are three questions worth asking if you are looking for financing with the lowest possible emissions.
More and more project owners are now looking at the bigger picture behind a building. Taking the origin of your financing into account can also make a difference in tenders and selection procedures. But how do you approach that? Marc de Hertogh, Relationship Manager Real Estate at Triodos Bank, sees three key questions as essential when looking for sustainable financing.
1. How much CO₂ does your bank emit?
With a bit of research, you can get a sense of a bank’s climate impact. Banks usually report on their direct emissions (buildings, vehicle fleet, energy use, suppliers), as well as on the indirect impact of the projects and companies they finance.
“When emissions are expressed in tonnes per million euros, it becomes interesting, because then you can compare,” says Marc de Hertogh. “At Triodos Bank, that information is simply included in our annual report. Last year, every million euros we lent was associated with 10 tonnes of CO₂ emissions. That figure decreases every year, because we actively work on it.”
The more a bank invests in fossil fuels, the higher its indirect emissions. But fossil fuels are not the only harmful activities to consider. There are also weapons, tobacco and deforestation, for example. “At our bank, all harmful activities are excluded from financing, and that is set out in our minimum standards. Because we have chosen sustainable banking across all our activities, we have long ranked first in the Bankwijzer benchmark published by the non-profit organisations FairFin and Financité.”
2. How important is sustainability in a credit decision?
For many banks, financial logic comes first: decisions are based on costs (loan-to-cost), the value of the building (loan-to-value) and the profitability of a project. At Triodos Bank too, the numbers matter, but they come second, after the impact or positive contribution of the project. “We would never ask you to cut costs by using concrete instead of wood — quite the opposite,” says Marc de Hertogh. “If your project is genuinely committed to sustainability, then a lot becomes possible.”
You can also recognise a bank that takes sustainability seriously by the way it thinks along the full life cycle of a project: does it also finance the first stages, such as the purchase and stripping-out of a building, when no added value has yet been created? Is a longer start-up phase or a longer term open for discussion? “At Triodos Bank, we propose these kinds of solutions ourselves, because we genuinely want to see more sustainable and innovative buildings come into being. That is our commitment, also towards our savers,” Marc de Hertogh explains.
3. What does the bank do with your money while it is sitting in your project account?
A bank’s overall investment policy matters, but what is your money actually used for between invoices? During a project, significant sums often remain for long periods in the accounts of temporary partnerships or associations — for example, advances paid by clients or profits that have not yet been distributed. That money, too, has a CO₂ footprint, depending on what your bank finances with it.
That is why it is worth asking explicitly how project funds and cash reserves are managed. Do they flow into a general pool that also finances polluting activities? Or can your accounts be linked to a portfolio that finances only sustainable projects? For Marc de Hertogh, the answer is straightforward: “All the projects we finance with the money held in our customers’ accounts contribute, each in their own way, to a better world. That positive impact is not a niche within our offer — it is our entire offer.”
By asking these questions, your relationship with your bank is no longer only about interest rates and repayment terms, but also about impact. It shows that you choose your financiers with the same care as your materials and techniques. In that way, your choice of bank becomes an additional lever for further reducing the carbon footprint of your projects.
Author
Isabel Wagemans
