LONDON — In 2013 Bevis Watts landed what he describes as “in many ways a dream job.”
The 41-year-old became CEO of the Avon Wildlife Trust, charged with protecting and promoting wildlife in the area around Bath and Bristol.
It was the culmination of a 20-year career looking at environmental sustainability issues, including running the government’s effort to promote recycling.
But last year Watts left the Avon Wildlife Trust to join, of all things, a bank. He became the UK MD of Triodos Bank, a Dutch lender that has operated in the UK on a minor scale since 1995.
“For everything I’ve tried to achieve as an environmentalist over 20 years, there is a common thread,” Watts told Business Insider. “A lot of our structural systems in banking undermine a lot of that. I think if I can just shift that needle in the debate just a little bit it will be hugely exciting. And that’s what I really want to do.”
Triodos is no ordinary bank. It was set up in 1980 as an overtly “ethical” bank, only investing in projects or companies that offer either an environmental, social, or cultural benefit. Around 60% of the more than £700 million lent in the UK goes towards social housing. Most of the rest goes to environmental projects such as renewable energy and organic farming. There’s also funding for projects like community theatres or shared spaces for artists.
Triodos has 45,000 customers in the UK and to date has only offered a savings account here. But on Wednesday it is launching its first current account here, something Watts believes the launch could be a step-change moment for the bank in Britain.
That’s what we pride ourselves on being — a movement, not just a bank
“This product is all about us having widespread, mass appeal,” he says. “We want to engage more people in that movement for change. I think that’s what we pride ourselves on being — a movement, not just a bank.”
It’s the opportunity to create a “movement” that enticed Watts to return to Triodos. Prior to the Avon Wildlife Trust, he had run Triodos’ business banking operation in the UK for five years. He knows how powerful a bank can be.
“Money is a huge form of democracy,” Watts says. “It’s a hugely powerful thing that we always underestimate. What we’d like to do is mobilise more people to think, what is the role of your bank and what should banks do with your money? Banks can be a hugely positive change agent.”
Watts is hoping Triodos can attract customers who want to change the world for the better, something the bank can do by putting their money to work on ethical projects.
“I’ve never been more determined or resolute that we’re doing the right thing and providing the right proposition than I am now,” he says. “Forget Trump, just look at this country. There’s been rolling back of all sorts of renewable energy subsidies, environmental regulations. We’re looking at things all the time to say, where are the major environmental and social challenges?”
Watts adds: “The age of austerity, plus reviews since the EU referendum of various areas of government policy around housing benefits and everything else, actually I see as increasing the homelessness problem in this country. You’re seeing people who use to be able to afford affordable rents in London no longer able to do so and pushed out to areas like Luton and they’re then displacing people in Luton who early a local wage there. You get these knock-on effects.”
Forget Trump, just look at this country. There’s been rolling back of all sorts of renewable energy subsidies
Triodos is working with local authorities in Kent to fund temporary accommodation for refugees, just one example of how the bank is looking to actively address pressing current issues.
Watts describes himself as an “environmentalist” but adds: “I’m not just a nutter who cares about wildlife, although I do. I see environmental issues as a problem for the whole of mankind.”
This passion began when Watts went to work in Sweden for a year shortly after graduating from a business degree.
“I was over there I was just really aware of a society that had a much deeper connection to the natural environment, in terms of how they thought about the built environment, in terms of how businesses integrated and respected it. It was a very reflective time for me personally because I had just lost a close relative so I was thinking, what’s life all about?”
This is Brexit Britain, not Sweden, and Theresa May is heading for a Conservative Party landslide. More austerity could be on the horizon. Is it really the time to be selling a social and environmentally conscious bank? Isn’t Triodos just for the middle-class Labour-voting idealists in inner cities?
“I think it would be a fair criticism 15 years ago of the ethical banking sector,” Watts says. “But I think you’ve seen a lot of things change from a consumer perspective and become more accessible — think about things like food. I mean we’re certainly not just for middle classes. Our interest rates are competitive.”
Ultimately [Co-op Bank] failed because they lost sight of their ethics and values
Triodos faces another potential hurdle launching its current accounts: the Co-op Bank.
The Co-op Bank was once Britain’s ethical bank. But in 2013 a £1.5 billion black hole was discovered in the bank’s balance sheet and then-chairman Paul Flowers was forced to resign after being caught up in a drug scandal that was splashed across the tabloids. The Co-op Bank was eventually bailed out by US hedge funds and is now up for sale.
Watts admits: “It’s always a risk that people think: ethical banking, that didn’t work did it. I think it’s very important that we’re clear how we’re different to them.
“We have an innovate ownership model. To protect the mission of the bank, the shares that are issued in the bank, which is a Dutch PLC, they’re held in trust by a foundation, and so investors in that foundation get a depository receipt and they can elect the board of people that represent them to engage with the bank and so on. But that means nobody can take over or gain a majority share in the bank and so the mission is protected. That independence is always protected.”
As well as its innovative ownership model, Triodos is unusual in that it doesn’t borrow from other banks to invest elsewhere. Instead it lends out less than the total of customer deposits entrusted to it, subverting the fractional reserve model.
In 2016, the bank loaned 64% of its deposits.
Executive pay is also capped at a maximum of ten times what the lowest-paid employee earns. The current account card is made from sustainable plastic — “derived from corn starch and compressed plant matter and so on.”
The Dutch lender is again bucking tradition on its current account is by charging £3 a month for its current account.
“There is no such thing as free banking, it’s a myth and a myth that we promote in the UK,” says Watts. “Someone always pays. High street lenders are charging almost double what payday lenders charge for unauthorised overdrafts. So we’re not going to do unauthorised overdrafts, we’ll only do authorised overdrafts and we’ll do them with fare and proportionate fees and charges.”
Triodos currently has around 45,000 UK customers who have deposited £1 billion with the bank. Watts says he hopes the current account will double Triodos’ UK customer base in the next few years. But growth will not come at the expense of its mission.
“I think it’s very sad what has happened to the Co-op, where I’ve been a customer for several years,” says Watts. “But I think ultimately they failed because they lost sight of their ethics and values. They failed because of mismanagement, they forgot what they were trying to do as a bank.
“Some people can get carried away and think Triodos is a silver bullet — we’re going to be the next RBS or something. We’re going to grow quickly but that’s not our aspiration. We’re part of a whole ecosystem of change. We want to be a reference point for how banking should be done. We’d love to think that that shifts the whole needle of how things are done.”
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