Investment process

FMO aims to promote sustainable development in places where it is needed the most and financing can be hard to obtain. To this end, we make investments in businesses and projects in emerging countries. These investments are not only financially complex, but also involve a broad range of stakeholders with widely different needs in environments that are not always stable and transparent. To successfully deal with all these factors, FMO follows a well-organised investment process that comprises six parts, visualised below.

Before we invest and during the investment period, we carefully research the financing opportunity and assess its wider impact on local communities, the environment and society. To this end, our investments are guided by policies that ensure that sustainability is at the heart of our operations and our way of working adheres to high ethical standards. The environmental risks we assess relate to the impact a project may have on emissions to air including but not limited to greenhouse gas emissions, water consumption, waste management and biodiversity. Our environmental risk assessment is guided by IFC Performance Standard (IFC PS) 3 Resource Efficiency and Pollution Prevention and IFC PS 6 Biodiversity. Our social risk assessment is also guided by the IFC Performance Standards and considers among others workers health and safety, labour rights, the impact of the investment on local communities, land rights or indigenous people.

As a bank FMO runs the risk of becoming involved in money laundering or financing terrorism. Furthermore, FMO runs the risk of financing sanctioned entities or financing customers with a bad reputation in general. One important way of mitigating these risks is to ensure that we conduct business with reputable customers and have adequate policies and procedures to deter criminal activity. For more on FMO’s risk management please refer to the risk management section. Applicable investment policies and guidelines can be found on our website.