We distinguish between short term outputs, resulting directly from our activities, and the outcomes that we believe to result from those outputs. The long-term impact refers to the indirect results we believe our work will contribute to over time. We recognize that each stakeholder group has different expectations and a different interest in what we do as an organization, which will determine the (perceived) value we create for them.
For example, we offer employees fair and equal pay, benefits and career development opportunities to ensure we attract, develop and retain skilled employees who are engaged and committed to FMO’s mission. By adopting a balanced approach in our investments and risk-taking and allocating risks to our business lines in accordance with our risk appetite for each business line, we aim to generate financial returns and a diversified portfolio that allows us to maximize impact in the future by growing our business, and that benefits our employees, investors and shareholders.
Through our investments and partnerships, we create value for our customers and, indirectly, for the local communities, customers, and suppliers within their markets. It is through these activities that we create long-term impact for all of our stakeholders.
Creating long-term impact through working with our customers
We aim to maximize our impact by leveraging the synergies and managing the potential trade-offs between the SDGs we have prioritized. We have identified three long-term development impacts that we believe our activities can and should contribute to. In addition, we aim to minimize the negative impacts that may occur as a result of our activities.
A more inclusive, resilient, responsible, and sustainable private sector | To contribute towards a more inclusive private sector, we invest in countries where other investors perceive risks as too high, including in least developed countries (LDCs) and fragile states. In addition, we stimulate customers to increase access to finance to marginalized groups, women in particular. By providing financial capital and expertise, we aim to support customer resilience in dealing with an economic downturn as well as adverse impacts of climate change and other uncertainties. We enable our customers to be more responsible and sustainable by supporting the implementation of (improved) ESG management and the adoption of responsible business practices within their operations. We believe these activities lead to more robust and resilient customer operations, which in turn enables them to attract additional (commercial) capital and further grow their businesses. Furthermore, we support pre-commercial business ideas and strengthen private sector ecosystems to develop more sustainable businesses and scale up impact.
Improved livelihoods, including for the people in the bottom 40 percent of income distribution, increased gender equality, thereby reducing poverty | To improve the livelihoods of the people in our markets, we focus on three specific areas. First, we invest in increased access to (better) goods and services – such as food, finance and electricity – and income-generating opportunities. Second, we enable our customers to sustain or grow the number of jobs in their own businesses as well as in the wider economy, and encourage them to improve the quality and inclusiveness of those jobs. Third, by investing in climate adaptation and resilience, we aim to protect and strengthen livelihoods from adverse impact caused by climate change. We believe these poverty-reducing activities can be particularly beneficial for women, people belonging to the bottom 40 percent of income distribution and those living in LDCs, LICs and fragile states that are often characterized by a higher proportion of (extreme) poverty.
A transition towards low-carbon and climate resilient economies in a just and inclusive way and protecting and promoting biodiversity | Climate change poses a threat to people’s livelihood and wider efforts to meet the SDGs. For this reason, we aim to contribute to the just and inclusive transition towards low-carbon and climate resilient economies, while protecting and promoting biodiversity. We focus on green investments and help to lower the environmental footprint of our customers and their value chains through energy solutions, forestry and customer engagement. In addition, we target investments on climate adaptation and stimulate our customers to reduce physical climate risk to better mitigate the impact of climate change. Through our ESG activities, we work with our customers to improve risk management practices with respect to climate and biodiversity.
Minimizing negative impact | We acknowledge that our investments can have negative consequences which we try to avoid or mitigate. For instance, supporting a hydro power plant helps deliver clean energy, fuels economic growth and improves lives overall, but may require resettlement. The ESG standards we expect our customers to apply are intended to identify, evaluate and mitigate key environmental and social risks as well as the negative impact of their activities. We require customers to put in place a grievance mechanism and to respond to community concerns.