Kees van Kalveen (Triodos): ‘Positive impact and intrinsic motivation’

A broad perspective, therefore, broader than that of the CFO who pursues financial value exclusively. And this approach is gaining traction as the world becomes increasingly characterized by geopolitical uncertainty, technological acceleration, and sustainability issues. In that respect, Van Kalveen is truly a frontrunner, serving as an example to many CFOs who want to function as effectively as possible in an increasingly complex environment. And who, like the CFO of Triodos, look beyond the financial interests and pursue social value in addition to financial value.

How does this pursuit of social value translate into your daily practice?
‘While social value creation is the reason for our existence, we always do this in tandem with financial value creation. You simply cannot be a sustainable bank if you are not also financially healthy. My role as CFO is to measure and assess that value creation. And in addition—and this is even more important than measuring and assessing—I contribute to actually ‘doing it.’ I do this primarily by working with the other members of the board to make balanced choices about where we optimize our resources to achieve that impact. Internally, we work with a triangle: impact, risk, return. Everything we do must fit within that triangle. Projects cannot only have a positive impact or only generate a return. They must have both, as well as a good risk profile. We are constantly searching for the optimal point in that triangle. And no, that is not always easy. Sometimes projects are very attractive and impactful, but not viable. Then we have to decide not to finance them. We do have a specific section that works with donations and grants, where we can be a bit more flexible with the rules, but that is only a small part of the total bank balance. For the core of our business, impact is only sustainable if the financial basis remains solid.’

The CSRD timelines have shifted, the political climate in Europe is less favorable than it was a few years ago, and major US investors are treating ESG as a closed issue. What does this mean for companies striving for social value?
‘Many CSRD programs are indeed being scaled back to the bare minimum now that the legal deadlines have been pushed back. But creating a positive impact is fundamentally different from completing a compliance checklist. Companies should also pursue sustainability because a healthy living environment is a prerequisite for any business in the long term, regardless of what the legislator says. If boards recognize that they are making a positive or negative contribution, they should act accordingly, regardless of the reporting pressures. For Triodos, these regulatory changes are no reason to change the way we work, because sustainability is already embedded in our policy.’

Greening, social value creation, and other ESG issues are often abstract and have a strong long-term character. Does this make banking with social impact extra difficult because it does not appeal to issues that are relevant now and in the short term? And which, however important, seems to lack a certain urgency?
‘Let me start by saying that there is a significant sense of urgency, and many Dutch people feel that too. The societal challenges of the moment, such as climate change, biodiversity loss, and polarization, are already affecting everyone. Triodos Bank takes a positive approach to this, with actual, direct impact on the real economy. We want to communicate that impact in a way that resonates with people. For example, electrification is crucial for climate change. But if you only say that an electric car is less harmful to the climate than a gasoline-powered car, that is not a message that appeals to everyone.
If you also say that such a car contributes to people being able to breathe fresh air when they go outside, including in your neighborhood, and that electrification can help reduce geopolitical dependencies, then you combine the short-term and long-term effects and make it more concrete. That makes the message more compelling.’

Triodos Bank sees lending as essentially a ‘social relationship’ and argues that the links between savers and borrowers need to be shorter. Can you explain this?
‘We only finance companies that have a positive social impact. However, in the current financial system, we see too much capital flowing into activities that only lead to price inflation without adding value, such as speculation or the overheated mortgage market. We advocate for a revision of the system where banks are incentivized to take more risks in the real economy, for example through SMEs and regenerative goals such as nature restoration. This can be achieved through higher capital requirements for non-productive loans and harmful activities such as the fossil fuel industry. By restoring credit as a social relationship in which the financier and the borrower are directly connected, we build a more resilient system. After all, money serves a public good, and the financial sector must once again become a useful force instead of merely pursuing short-term returns.’

Geopolitical risks are currently a major source of concern for many CFOs. To what extent does Triodos Bank's focus on local, value-driven investments provide a buffer against global economic shocks and trade tensions?
‘By creating shorter links between savers and borrowers, we are building a system that is intrinsically more stable and more resilient to external shocks. Our focus on the real economy and financing local, sustainable projects further contributes to becoming less dependent on the vagaries of speculative global markets.’

And promoting security? For example, by financing the arms industry?
‘Of course, we recognize the importance of security. But Triodos Bank does not finance the arms industry. We see that as a task for national and European governments. Although I know that some banks take a different view.’

Artificial intelligence is at the top of the agenda for virtually every board of directors. What is Triodos' experience with AI?
‘We are really at the beginning of a journey. We are working on it throughout the company, but I do not dare make any big statements about it yet. I do not yet see many truly system-integrated implementations but, here and there, there are some positive experiences. For example, with the automatic summarization of meeting reports or support in customer contact. In any case, I do not expect the core function of a bank—bringing together savers and borrowers with different needs in terms of size of the amount of money, risk, and term—to be taken over by AI.
AI will undoubtedly change how we perform that function. The way we work will undoubtedly evolve, as has been the case with every new technology over the past 150 years. But the function of the bank itself? That will not change. Whatever happens, we will always bear in mind the ethical implications of AI use. How do you deal with data? How do you factor in energy and water consumption? And to what extent should an algorithm be allowed to decide whether or not to grant a loan? These are questions we are particularly critical of.’

The role of the finance professional is also changing due to the rise of AI and other developments. But how, do you think?
‘I strongly believe in the value of a broad profile and constant development. In the financial world, professionals must be willing to continually learn new things and broaden their perspective. This makes them more easily deployable on all kinds of matters outside the financial domain, and they can also focus on issues such as data and geopolitics or be effectively involved in change programs. Broadening your horizon may seem to lead to a loss of deep substantive knowledge. But that does not have to be the case. If you do the same thing for twenty years, you are not necessarily a better specialist than someone who has been doing it for five years. In fact, changing your perspective can make you a better specialist. Switching between the front and secondary line can be valuable, for example: by experiencing both sides of the same subject, you become a much more well-rounded specialist. If you only work in the second line on legislation and regulations, you can become rigid; by also working in ‘change’ or the first line, you understand the impact of implementation much better. It also means that you can expand your basic knowledge much more quickly in practice and, therefore, if necessary delve deeper again.’