We are aware that FMO operates in a network of organizations and civil society. In this network, our decisions have an impact on others and vice versa. We engage with our stakeholders to find out what matters most to them and improve our decision-making and reporting.
Dialogue with our stakeholders, whether through scheduled meetings or hosting events, ensures that we continue to learn from them. We identify our stakeholders based on their economic relationship with FMO, their interest in and influence on FMO, the extent to which they are affected by FMO’s activities as well as the potential for sharing knowledge. To ensure a complete overview, we linked stakeholder groups to the inputs, activities and outputs of our business model.
Stakeholder engagement informs our strategy
Engaging with our stakeholders ensures our strategy and business continue to be aligned with their needs and expectations. As a Dutch Development Finance Institution (DFI), we maintain a close relationship with the Dutch Ministry of Finance and Ministry of Foreign Affairs. Together, we discuss FMO’s strategy and operations. In addition, we engage with a wider group of stakeholders on themes that are of strategic importance to FMO.
We are part of several learning communities that share knowledge and look for best practice regarding climate (SDG 13), human rights (an inseparable part of all SDGs) and the harmonization of impact measurement and reporting standards. We have presented our climate approach on several occasions and have taken part in public debates on this subject. We also organized an NGO meeting on climate.
Our interaction with peers, knowledge partners and NGOs helps us develop our knowledge and improve our way of working. Our Management Board (MB) is actively involved in stakeholder dialogue with our key stakeholders. In bilateral settings as well as at public events, members of the MB regularly meet with the following key stakeholders: clients, the Ministry of Finance, the Ministry of Foreign Affairs, investors, the Works Council, partner DFIs, NGOs and the Dutch Central Bank. The day-to-day management of stakeholder relationships is entrusted to stakeholder account managers, who report to MB on a quarterly basis about the content of their discussions.
Stakeholder engagement on human rights
NGOs and other stakeholders have asked us to better explain our investment process and how we safeguard free prior and informed consent (FPIC) and land rights. These are recurring topics we address during scheduled meetings. In September, we organized a human rights exchange for a broad range of stakeholders, including NGOs, to discuss dilemmas in an open and transparent setting. FMO was part of the Dutch Banking Sector Agreement (IMVO Covenant, 2017-2019) that encourages Dutch banks and NGOs to jointly translate the banks’ commitment to United Nations Guiding Principles on Business and Human Rights (UNGPs) into concrete actions.
In the context of the Dutch Banking Sector Agreement (DBA), FMO contributed to the working groups on Enabling Remediation, on the sector analysis of the palm oil value chain and on Increasing Leverage. As part of the latter, several NGOs, with support from FMO and the Dutch Ministry of Foreign Affairs, organized a learning session on shrinking civic freedoms and the position of human rights defenders. Publications of the working groups are available on the DBA website.
Moreover, we engage with NGOs in our investment process when looking for expertise on human rights in local contexts. Unfortunately, for a few projects in our portfolio we identified human rights violations despite our best efforts to support clients to improve their ESG (environmental, social and governance) performance in line with international standards. In these cases, NGOs hold us accountable. We work with our clients and other stakeholders to overcome these issues. In this annual report, we included an overview of high ESG risk clients that are currently not adequately managing their ESG risks or are materially behind schedule, as well as case studies of projects where human rights were violated.