Glossary of terms

In the overview below we explain terms and topics that are included in the materiality matrix. We distinguish between topics within our own organization and external topics (via our investments), and we have listed which departments are responsible for management of the topics.

Topic

Explanation of terminology

Scope

Governance / management of material issues

Paragraph title

Development impact

FMO’s positive indirect economic influence on local economies as participant or agent in socio-economic and environmental change

FMO’s investments

Strategy, sector departments

Strategic performance

Transparency & Accountability

The extent to which FMO is operating in such a way that it is easy for stakeholders to see what actions are performed

FMO’s own organization

Strategy

Accountability and compliance

Financial sustainability and risk appetite of FMO

The economic value generated (revenues) and distributed (operating costs, wages, payments to providers of capital and to government) by FMO within the boundaries of FMO’s risk appetite

FMO’s own organization

Finance, Risk Management, Credit

Financial performance

Client satisfaction

The extent to which FMO’s products and services meet or surpass client expectations

FMO’s own organization

Sector departments

Outlook

Additionality of FMO’s activities

FMO provides products and services which the market does not provide, or does not provide on an adequate scale or on reasonable terms

FMO’s investments

Strategy, sector departments

Our business model

ESG risk management

Businesses incorporating sustainable environmental, social and governance best practices enjoy stronger financial results and long-term viability; together with clients we therefore assess ESG risks, identify where ESG improvements can be made, agree on action plans for addressing improvements and support them on their way to meeting them

FMO’s investments

Strategy, sector departments

Strategic performance

Inclusive development

Invest in projects with the specific aim of expanding access to goods, services and livelihood opportunities on a commercially viable basis to people at the Base of the Pyramid (people living on less than USD 8 per day in purchasing power parity or lacking access to basic goods, services, and income)

FMO’s investments

Sector departments

Strategic performance

Catalyzing public & private capital

Provide access to investors to impact investing and new markets in emerging and developing countries, providing clients with increased access to finance and more diversified lending

FMO’s investments

Sector departments, SYN, FIM, PIM

Strategic performance

Environmental footprint of our investments

Greenhouse gas emissions that follow from activities of companies that FMO finances

FMO’s investments

Strategy, sector departments

Strategic performance

Innovation and knowledge management at FMO

FMO’s approach to knowledge management and innovation within its own operations

FMO’s own organization

Sector departments

Strategic performance

Support Dutch companies

Support Dutch businesses by facilitating investments in and export to emerging markets and developing countries.

FMO’s investments

NedLinx B.V.

Strategic performance

Taxation (investment portfolio)

Contributions to governments are important for each nation to finance public goods such as infrastructure, health and education and thus contribute to the wellbeing of the people of such nation (for both more and less developed countries); compliance and trust from both tax payers, tax authorities and governments can create a healthy tax environment, and within FMO’s power we aim to contribute to such an environment

FMO’s investments

Finance & Control, sector departments

Report of the Supervisory Board

Local stakeholder engagement

FMO asks its clients to set up a local stakeholder engagement process including a local grievance mechanism; stakeholder engagement is important to identify risks and impacts at an early stage, and to help avoid, mitigate, and manage risks and impacts

FMO’s investments

Sector departments

Strategic performance

Promote ESG best practices

FMO organizes seminars, training and conferences for clients, peers and industry stakeholders to enable knowledge-sharing on Environmental, Social & Good Governance practices

FMO’s investments

Sector departments

Strategic performance

Networks

FMO partners with selected banks, development finance institutions, private investors, business organizations, knowledge institutes and civil society to complement the finance we provide to our clients with a network that enables the sharing of specialist knowledge and expertise

FMO’s own organization

Strategy, sector departments

Strategic performance

Employee development in FMO

Policies, procedures and actions taken by FMO to provide training and education for skill and talent development and employability

FMO’s own organization

Human Resources

Organizational results

Human rights

FMO recognizes that businesses have a duty to respect human rights (such as the right to information and freedom of expression, right to land, water, health and safety), and a responsibility to ensure that effective and accessible means of redressing infringements of human rights resulting from our business activities or those we support are available; human rights are an important aspect in ESG Risk Management

FMO’s investments

Strategy, sector departments

Strategic performance

Diversity and equal opportunity

Actions taken by FMO and its clients to promote diversity, gender equality, equal remuneration and women’s empowerment in their work force

FMO’s own organization and investments

Sector departments, Human Resources

Organizational results

Investing in resource efficiency and renewable energy

Investments in resource efficiency (water, materials, waste) and renewable energy in response to climate change and resource scarcity

FMO’s investments

Sector departments

Strategic performance

Biodiversity

Potential impact of FMO’s investments on ecosystems

FMO’s investments

Sector departments

Strategic performance

Business integrity of FMO

Policies, procedures and actions taken by FMO to ensure high standards of business conduct; examples include investment criteria, exclusion lists, anti-money laundering, anti-bribery and anti-corruption procedures

FMO’s own organization

Compliance, Risk Management, Internal Audit

Accountability and compliance

Good labor practices and decent work conditions

Actions taken by FMO’s clients to ensure a healthy and safe working environment, provide training and education, fair/living wages, freedom of association and collective bargaining, working hours, prevention of child/forced/compulsory labor and discrimination

FMO’s investments

Sector departments

Strategic performance

Safeguard privacy of FMO’s clients

Adequate systems and procedures in place to protect customer privacy and compliance with regulations

FMO’s own organization

Compliance

In Control Statement

Remuneration policy of FMO

Remuneration policy and practices to reflect FMO’s objectives of good corporate governance and sustained, long term value creation for its stakeholders; FMO has not had variable pay for members of the Management Board since 2012

FMO’s own organization

Human Resources

Corporate Governance

Role in public debate

FMO’s role in the public debate on sustainable development in developing countries

FMO’s own organization

Strategy, Sector departments

External environment

Local presence

FMO has its head office in The Hague, NL and a local office in Johannesburg, SA; local presence enables more frequent contact with clients, resulting in better relationships and service

FMO’s own organization

Sector departments

At a glance