Materiality assessment

In 2020, we conducted an online survey and follow-up sessions with several focus groups. In total, we gathered input from 203 internal and external respondents. Based on past experiences and current trends, we modified our materiality assessment approach. Building on the GRI materiality principles, our goal was to determine how stakeholders rate FMO’s performance on its material topics, to identify any new material topics and to gain a better understanding of what they expect from us with respect to reporting.

FMO’s performance on material topics

In determining how our stakeholders rate our performance we have assumed that most of our material topics are embedded in our current strategy and value creation model. They reflect the areas through which we create impact and form the basis of engagement with our stakeholders. How we perform on these topics influences how they perceive us. We asked survey participants to rate our performance per topic on a scale of 1 (terrible) to 5 (very good). A lower rating suggests FMO needs to improve on its overall performance or in its communication in that area.

The following heat map depicts how each stakeholder group has rated FMO on the material topics. As we seek to create value for all our stakeholders, all groups were equally weighted in our analysis[1]. Our overall score was 3.7, above average but suggesting room for improvement. This is also where we set the threshold, at 3.7 or lower, to determine the topics needing more attention. Most notably, these include our core impact themes like ‘reducing inequality’, ‘empowering women’, ‘supporting human rights’ and ‘climate action’ as well as the way we measure impact. Our performance on ‘investing in innovation’ received low ratings across all stakeholder groups[2]. For some topics we believe we can better inform our stakeholders by illustrating ongoing efforts or planned initiatives. We try to do that as much as possible in this year’s annual report. An overview of the content provided on each material topic is outlined in the connectivity table. Other topics require further reflection and follow-up discussions with our stakeholders.   

New material topics

To identify emerging topics, we asked our stakeholders to list the key risks and opportunities they believe are important for FMO’s value creation or for society at large. We then asked respondents to rank these in order of importance. In our analysis, we grouped the answers into broader risk and opportunity categories. Topics in the top five, as outlined in the following table, require further attention. This holds true for topics that are completely new as well as for those that are established. For instance, a topic that receives a relatively good performance score can still be flagged by stakeholders as a major risk, indicating the importance they attach to that topic.








Focus on climate through sustainable investments (e.g. clean energy, forestry, sustainable agriculture, biodiversity, clean water)



Investment risks



Technological development, innovation & venture capital



Effects of pandemic



Supporting economic recovery after pandemic



Climate change



Invest in new & emerging markets (focus on Africa)



Economic instability & financial crisis



Impact investing & measurement (incl. standard development)



Country risks


It is not surprising that ‘investment risks’ and ‘effects of the pandemic’ as well as ‘economic instability’ are among the most frequently mentioned risks. At the same time, respondents also believe the pandemic offers an opportunity for FMO to step in at a time when the need is greatest. ‘Effects of the pandemic’ and the resulting ‘economic instability’ are the only new material topics we identified. We could match the rest of the topics to our material topics list. ‘Investment risks’ and 'Country risks' fall within the topic of ‘FMO's financial sustainability & risk appetite’. This topic receives a performance score above the threshold. However, because of the risks our stakeholders identified, it is added to the list of issues we need to focus more on in the months ahead.

Transparency and quality of our disclosure

The outcome of the materiality assessment informs the focus of our reporting so that we meet our stakeholders’ informational needs. Our stakeholders were asked to indicate how satisfied they were with the quality and transparency of our reporting and were asked to provide suggestions for improvement.

FMO received a total average score of 3.8 on transparency and quality for our reporting, which is satisfactory. However, there is room for improvement through formal reporting or other communication channels. In addition to requesting less formal communication, respondents reiterated the need to improve impact measurement and reporting at a more granular level. Specifically, on how we achieve positive change through better measurement, storytelling and showcasing on-the-ground impact.

Next steps

Based on the performance rating and the top risks and opportunities, we identified the following nine topics that need more attention:

  • Combating climate change and its impacts

  • COVID-19 effects / supporting economic recovery

  • Measuring impact & learning from evaluations

  • Investing in innovation

  • Reducing inequality (incl. investing in new & emerging markets (focus on Africa))

  • Supporting customers to safeguard human rights

  • Supporting women’s economic empowerment

  • Ensure employee engagement, health & well-being

  • Maintaining financial sustainability and risk appetite of FMO (incl. investment & country risks)

This modified approach provides guidance for further engagement and improvement. Some of these topics were identified as being most material in previous assessments. Three topics have gained in importance: ‘measuring impact & learning from evaluations’, ‘investing in innovation’ and ‘internal organization & culture’. One new topic has been added to the list: ‘effects of the pandemic’.

As the materiality assessment was carried out towards the end of 2020, this annual report does not yet address all of these findings. We need more time to gather the information and report on some topics. Moreover, we will need to dive deeper into these areas with our stakeholders to better understand where we can improve. The outcomes of this assessment will inform our strategic decision-making and will guide our reporting efforts in the years to come.

  • 1 Using averages within stakeholder groups.
  • 2 Please note that the topic “supporting Dutch business opportunities” is also ranked low. However, as the responsibility for this topic will shift to Invest International in the course of 2021, a newly established entity independent of FMO, we will not include it in our topics needing particular attention.