Triodos pioneers sustainable crowdfunding platform
Sustainable lender Triodos has become the first UK bank to launch its own crowdfunding platform, which will enable people to invest directly in equity or bonds issues by organisations delivering positive social and environmental impacts.
People can invest as little as £500 in charities or businesses that have been screened by Triodos for sustainability impact, the viability of their business model and the credibility of the management team.
The bonds are eligible to be held in Triodos’ Innovative Finance ISA, allowing investors to receive tax-free interest on these investments.
Triodos’ managing director Bevis Watts said the crowdfunding platform recognises that investors are increasingly looking for opportunities that allow them to support progressive companies, while also receiving long-term returns.
“Everyday investors can make a positive choice to shape the world they want to live in,” Watts said. “In that sense money can be a hugely powerful form of democracy if invested directly into renewable energy, social housing, charities or social enterprises. Social investment needs to be more accessible to UK investors, who increasingly recognise the power of money to create change.”
The launch comes in response to the Government’s call last November for banks to make it easier for people to access social impact investments.
The platform providers three bond offers, with interest rates ranging from 5-7%.
Mendip Renewables aims to raise £1.8m by March 31 to take a 5MW solar farm in Somerset into community ownership, while fellow renewable energy firm Rendesco is raising £5.5m to develop clean energy from ground source heat pumps across sites. A £5m target has been set by charitable group Thera Trust to provide 14 new homes for people with complex learning difficulties.
The Innovative Finance ISA is available within the current £30,000 personal allowance, alongside cash and stocks and shares ISAs.
Triodos has track record in raising finance for social and environmental organisations and in the past 15 years has raised more than £130m to fund over 50 projects.
The crowdfunding platform follows hots on the heels of the new Triodos personal current account – the most sustainable of its kind brought to the UK market – launched in 2017.
Pressure is now mounting on the rest of the finance sector to follow suit through boosted investment in green businesses, technologies and innovations.
Despite more than 70% of banks introducing environmental and carbon footprint stress, many are failing to align business and investment strategies in keeping with the 2C pathway scenario established through the Paris Agreement. UK's major high street banks have been criticised for sluggish attempts to shift investments from fossil fuels to clean energy.