GRI material aspects

Development impact through responsible investing

GRI 103-1, 103-2, 103-3, 203-2

FMO’s strategy towards 2025 is becoming ‘your preferred partner to invest in local prosperity’. We contribute to decent work and economic growth (SDG8), reducing inequalities (SDG10), climate action (SDG13), while continuing our journey to double the number of supported jobs and the expected amount of GHG avoided. FMO has chosen for targets that drive these goals, being the amount of new commitments (including catalyzed funds), transactions reducing inequalities and actively sourced green investments. Our strategy

We invested a total of EUR 2.6 billion, which supported an estimated 615,000 jobs. 36% of our commitments help to reduce inequalities. We measured these impacts using our Impact Model and capturing data in Impact Cards. Our performance - Higher impact

Financial sustainability and risk appetite of FMO

GRI 103-1, 103-2, 103-3, 201-1

To continuously be able to support our business our AAA credit rating, return on shareholders’ equity and Core Equity Tier-1 ratio are important. These financial targets are defined and managed by performing due diligence on possible investments and managing our Risk Appetite within our Risk Management Framework. Notes to our Annual Accounts, Our business model - Investment process

FMO’s financial and risk management are carefully set up and controls are implemented and functioning continuously (see explanatory notes to the Annual Accounts). This applies to processes, procedures and product systems, and financial systems. Operating income in 2018 amounted to €286 million.
Our performance - Financial performance

Transparency & accountability of FMO’s activities

GRI 103-1, 103-2, 103-3

Our stakeholders demand increased transparency and accountability, especially with regard to environmental and social aspects. We have an up to date Sustainability Policy and continuously invest in extended and intensified stakeholder engagement. We disclose all contracted investments and implemented disclosure before contracting for investments with high ESG risk. FMO has a fully integrated annual report in which we disclose our performance in the year. Our business model - Environmental, Social and Governance management

FMO’s score in the latest (2017) Transparency Benchmark was 191 out of 200 points. Our strategy

Environmental footprint of FMO's investments

GRI 103-1, 103-2, 103-3, 305-5

Stakeholders indicate the importance of combating climate change. We aim to halve our environmental footprint by doubling the expected amount of GHG avoided via green investments. Green investments are primarily transactions in renewable energy and energy efficiency. We select and screen these transactions in our investment process. Our business model - Investment process

In 2018, 36% of our total investments were green investments. Through these investments we avoided a total of 988,000 tons of GHG emissions. Our performance - Higher impact

Business integrity of FMO

GRI 103-1, 103-2, 103-3

Our ability to function as a development bank depends in part on our ability to comply with a host of rules and regulations. FMO’s Know Your Customer (KYC) procedure ensures that clients comply with anti-money laundering, terrorist financing and international sanctions laws and regulations. FMO’s standards and policies and good business practices foster acting with integrity. FMO is committed to its employees, clients and counterparties, adhering to the highest ethical standards. FMO has a Compliance framework which entails identifying risks, designing policies, monitoring, training and providing advices. FMO has policies on topics such as know your customer (KYC) & sanctions, anti-bribery and corruption, conflicts of interest, internal fraud, private investments, privacy and FMO also regularly trains its employees in order to raise awareness Employees are also encouraged to speak up in case of suspected integrity violations conducted by an FMO employee. Our business model; Risk Management section

In 2018, timely conducting of periodic KYC reviews was a specific area of focus for FMO. FMO is working on further strengthening the KYC & sanction process based on findings from the regulator and Internal Audit. These improvements will be implemented starting 2019. No significant integrity incidents related to FMO employees have been reported and there were no incidents at existing clients outside FMO’s risk appetite. Our performance - Deeper relationships

Promote ESG best practices

GRI 103-1, 103-2, 103-3

Along side our financing we actively promote best practices in ESG, where appropriate through our Capacity Development program. Throughout the lifetime of the investment we continue to work with our clients to ensure implementation of our ESG requirements. We review the client's and consultant's ESG monitoring reports and accident and incident reports. Our business model

We track progress on the identified ESG action items through our new ESG performance tracker. This tool also enables us to indetify and manage the highest priority ESG risks in our portfolio. For 2018 we set ourselves a target to ensure that 90% of high priority ESG risks related to new clients contracted in 2017 and where FMO was in the lead, should be either fully compliant with our standards or actively on their way to compliance. By the end of 2018 95% of the applicable risks were managed effectively. Our performance - Higher impact

Human rights