New boss of Triodos bank is environmentalist Bevis Watts
"I’m an environmentalist but with a very strong fascination with how to use money to incentivise behavioural change," the new MD of Triodos tell us.
The ethical bank, which aims to make money work for positive social, environmental and cultural change, sees Dr Bevis Watts return in a new role.
More and more, the name of Triodos bank comes up when we report on social finance. You’ll find them associated with the Lawrence Weston solar farm that makes up our ‘Big Deal’ in the next issue of the Quarterly, Big Society Capital have put money into the Triodos New Horizon social impact bond and they helped raise capital for the hugely successful Golden Lane Housing charity bond, which provided housing and support for those with learning disabilities.
So for a bank that always wears its values on its sleeve, it’s perhaps not so surprising that Triodos has installed environmentalist Dr Bevis Watts as their new managing director. Watts has come to the role after three years as chief executive for the Avon Wildlife Trust.
What the hell is an environmentalist doing in charge of a bank, you might very reasonably ask? Watts was first sent down this path when his father, a teacher died: “There were hundreds of cards saying what an influence he had been on their lives and I got to thinking what is life all about?”
Watts was living in Sweden whilst studying for his business degree at the time: “I was living in this society that has a very different connection to the natural environment in terms of how they appreciate it, how much time they spend in it and how the corporate world respects it so I became very interested in corporate environmental management and then before I knew it I got a first class degree and a PHD (in Management Science) that followed on from all of that. So I’m an environmentalist but with a very strong fascination with how to use money to incentivise behavioural change and that’s been the common thread throughout my career.”
Watts has earned his business stripes, firstly with that business degree and secondly during five years as head of business banking between 2008 and 2013 prior to his stint at the Avon Wildlife Trust. So how come he’s back for a second round?
is the way the current system works socially useful?’ In my view it isn’t...
Watts says that it’s an interesting time to be in banking again. Following recession and the scrutiny of banks that followed, “We are moving past the time when we are thinking ‘how do we stop the whole system collapsing again?’ and more towards ‘does this serve us, is the way the current system works socially useful?’ In my view it isn’t, it needs a new kind of leadership and that’s what I hope to provide and bring.”
Triodos is due to launch a current account next year, an obvious move for a bank that Watts says was only delayed due to the cost of implementation and the timing of the fluctuations of the economy. “It was a very live discussion back in 2008 but then the financial crisis hit. Widespread disillusionment and disaffection with banking exists so now’s a good time to do it.”
Ah yes – people are a bit suspicious of banks these days. The press release that accompanied the news of Watts’ new role included a quote from him: “Our banks are not serving the needs of society. They undermine our long term ability to sustain ourselves.”
At the minute most banks are entirely motivated by self interest
When we talk he soon warms to this theme: “At the minute most banks are entirely motivated by self interest and a culture that is driven by internal financial rewards. A lot of the poor behaviour we have seen is entirely incentivised by bonus cultures and demands to return maximum profits to shareholders which inevitably means you are concerned with selling as much as you can, getting the highest return you can get out of a particular product or, in the case of subprime mortgages and derivatives that optimise returns, actually have a total disconnection to the real economy and aren’t that safe. That is essentially how it is undermining our society.
“What are the banks doing with your money? In my last role I came across people who were really angry about housing developments being built on greenfield sites. Well, who’s financing that? Who’s financing fracking if you don’t agree with that? I’d like people to take a more conscious attitude towards what their money is doing. We provide a greater degree of transparency. We publish every loan and investment we make.”
Triodos is growing. Customer numbers grew 15% across Europe in their last annual report, retail deposits and lending have both grown by “about 11%” according to Watts and they have consistently provided a return on equity of between 3.5% and 5% since the financial crisis.
Yet it remains small compared to the recognised high street banks in this country. Can it prove influential on them? “When I first joined the bank it was easy to dismiss us as this odd little social finance thing. We’re now in a different league, kind of mid league status so we are a real reference point that this works.
“I’ve always thought, throughout my career, what impact am I having, what am I achieving through this? If I can lead a bank that is being a real reference point and is then influencing the debate about what other banks should be and how the financial system should change, I’ll be quite happy, that’s what I want to do.”
Although we both work in fields where the vast majority of people around us are concerned with more than profit and generally working towards a common good, we mull whether an increased interest in sustainable banking is indicative of a change in attitude towards what Watts terms ‘conscious capitalism’.
“I started working in recycling 20 years ago when recycling rates were 5% and look at where they are now (around 45%). I think we are on a similar journey in changing behaviours about a conscious use of money,” he says. Here's hoping.