NETHERLANDS - ABP and PGGM, the largest pension funds in the Netherlands, say they expect to see real returns on investments in sustainability and social causes.
The €211bn civil service scheme ABP and the €86bn healthcare scheme PGGM have both increased their stake in Dutch ethical bank Triodos to over 5%, as part of the bank's recent release of over one million new shares, they said.
"Triodos Bank has been operating successfully on sustainability. The common ground between ABP's sustainability policy and Triodos' activities offer the prospect of proper returns," said Roderick Munsters, ABP's director of asset management.
"Furthermore, Triodos Bank wants to improve the quality of life of everybody. Our participants will benefit from this as well."
Else Bos, ceo of investments at PGGM, also added: "PGGM has increased its stake in Triodos to enable sustainable banking on a larger scale. It connects with our belief that financial and social returns will go together in the long term."
The merchant bank raised a total of €67m in the new share sale, bringing its own capital up to €190m.
Triodos claims to be one of Europe's leading ethical banks, focusing on sustainable and transparent banking as it only lends money to work for "positive social, environmental and cultural goals".
The bank currently finances companies and projects in organic farming, sustainable energy, healthcare, microfinance, culture and fair trade.
Triodos Bank said it aims to increase returns on its own capital from 5% to 7% in the medium term.
In 2006, Triodos Bank made a net profit of €6.1m, leading to a dividend of €3.40 per share. It has almost €3bn of assets under management, following a growth of 22% on average during the past five years.
The bank has invested in the UK, Belgium and Spain, and is planning to start investing in Germany next year, it said.
Triodos Bank has 125,000 customers, and 4,000 outstanding loans and employs 350 staff.