GRI content index

FMO has chosen for the ‘In Accordance’ option ‘Core’. In the following table, reference is made to the general standard disclosures.

General standard disclosures

No

Description

Reference

Strategy and Analysis

G4-1

Statement of senior decision-maker (CEO) about the relevance of sustainability to FMO and FMO’s strategy for addressing sustainability

Letter from the CEO

Organizational Profile

G4-3

Name of organization

FMO at a glance

G4-4

Primary products / services

FMO at a glance

G4-5

Location of headquarters

FMO at a glance

G4-6

Number of countries where the organization operates

FMO at a glance

G4-7

Nature of ownership and legal form

Legal entity

G4-8

Markets served (incl. geographic breakdown, sectors served and types of customers and beneficiaries)

FMO at a glance

G4-9

Scale of organization:
Number of employees
Net sales
Total capitalization
Quality of products/services provided

FMO at a glance

G4-10

Number of employees by gender
Number of permanent employees by employment type and gender

Organizational results

G4-11

Percentage of total employees covered by collective bargaining agreements

Organizational results

G4-12

Organization’s supply chain

Our investment process

G4-13

Significant changes during reporting period regarding FMO’s size structure, ownership, etc.

Reporting policy

G4-14

How is the precautionary approach principle addressed?

Our investment process

G4-15

List externally developed economic, environmental and social charters, principles, or other initiatives to which FMO subscribes

External assurance

G4-16

List memberships of associations in which FMO holds a position on the governance body OR participates in committees/projects OR views its membership as strategic

External assurance

Identified material aspects and boundaries

G4-17

Entities included in the organization’s consolidated financial statements. This may be disclosed by referencing the information in publicly available consolidated financial statements

Notes to the Annual Accounts

G4-18

Explain process for defining report content

Reporting policy

G4-19

List all material aspects identified

2017 Materiality Assessment

G4-20

For each material aspect, report the aspect boundary within the organization

annex Glossary of terms

G4-21

For each material aspect, report the aspect boundary outside the organization

annex Glossary of terms

G4-22

Report the effect of any restatements of information provided in previous reports, and the reason for such restatements (e.g. from merger/acquisition, nature of business, etc.)

Reporting policy

G4-23

Report significant changes from previous reporting periods in the scope and aspect boundaries

Reporting policy

Stakeholder Engagement

G4-24

Provide list of stakeholders engaged by the organization

FMO’s stakeholders and engagement

G4-25

Report basis of identification and selection of stakeholders with whom to engage

FMO’s stakeholders and engagement

G4-26

Report approach to stakeholder engagement, including frequency of engagement by type of stakeholder

FMO’s stakeholders and engagement

G4-27

Report key topics/concerns that have been raised through stakeholder engagement

Addressing global issues,
NGOs and local stakeholders have become more vocal,
Market dynamics are changing,
Value for the Netherlands,
Regulatory developments

Report Profile

G4-28

Reporting period

Reporting policy

G4-29

Date of most recent previous report

Reporting policy

G4-30

Reporting cycle

Reporting policy

G4-31

Contact point for questions regarding the report

FMO at a glance

G4-32

Report the “in accordance” option the organization has chosen. Report the GRI Content index for the chosen option. Report the reference to the External Audit report, if the report has been externally assured

Standards and reporting guidelines

G4-33

Report policy and current practice with regard to seeking external assurance for the report

External assurance

Governance

G4-34

Overview of:
Governance structure and composition
Role of highest governance body in setting the organization’s purpose, values and strategy
Competencies and performance evaluation of highest governance body
Role of board in risk management
Role of board in sustainability reporting
Role of board in evaluating economic, environmental and social performance
Remuneration and incentives

Strategy setting,
Culture and management,
Supervision,
Stakeholder engagement,
Role as employer

Ethics and Integrity

G4-56

Describe values, principles, standards and norms of behavior such as codes of conduct/ethics

Our business model

In the following table, reference is made to the specific standard disclosures.

Material aspects

No

Disclosures management approach (DMA)

Indicators

Development impact (Indirect economic impacts)

G4-EC8

FMO’s strategy towards 2025 is becoming ‘your preferred partner to invest in local prosperity’. We contribute to decent work and economic growth (SDG8), reducing inequalities (SDG10), climate action (SDG13), while continuing our journey to double the number of supported jobs and the expected amount of GHG avoided. FMO has chosen for targets that drive these goals, being the amount of new commitments (including catalyzed funds), transactions reducing inequalities and actively sourced green investments.
Our business model

We committed EUR 3.1 billion, supported 900,000 jobs and avoided 1,600,000 tons of GHG emissions. 42% of our commitments were green and 41 transactions reduced inequalities. We measured these impacts using our Impact Model and capturing data in Impact Cards.
Investing in local prosperity, FMO impact model

Financial sustainability and risk appetite of FMO ( Economic performance)

G4-EC2

To continuously be able to support our business our AAA credit rating, return on shareholders’ equity and Core Equity Tier-1 ratio are important. These financial targets are defined and managed by performing due diligence on possible investments and managing our Risk Appetite within our Risk Management Framework (see notes to our Annual Accounts).
Our investment process

FMO’s financial and risk management are carefully set up and controls are implemented and functioning continuously (see explanatory notes to the Annual Accounts). This applies to processes, procedures and product systems, and financial systems. The RoE was 9.1% and the CET-1 ratio 24.9%.
Financial performance

Additionality of FMO’s activities (Indirect economic impacts)

G4-EC8

As a development bank we seek additionality in financing products and services which the market does not provide, or not on an adequate scale or reasonable terms. We also provide ESG inputs that other parties do not provide by offering value-added services or unique expertise in ESG standard-setting or green or inclusive investments. Deal teams assess additionality on these aspects during due diligence and monitoring and register this on scorecards.
Our investment process

Of the approved investments in 2017 60% was financially additional and 40% both financially and ESG additional (see 2.5.2).
Our business model

Client satisfaction (Product and Service labeling)

G4-PR5

We aim to realize positive impact in terms of economic growth, social progress and environmental sustainability with our clients. We build and maintain relations via sourcing through deep-rooted networks, due diligence screening and advice on improvements, monitoring of progress, support with assistance. We aim to be additional, support ESG actions, provide innovative products, Capacity Development and our knowledge and networks, e.g. in conferences. We support Dutch corporates investing in and trading with emerging markets.
Our business model

In November 2015 an external independent survey was performed on general satisfaction and specifically on our qualities, added value, loyalty, capacity development, knowledge transfer and our extensive network. This bi-annual survey scored 8.6 out of 10 (2012: 8.3). A new survey is performed in 2018. See paragraph ‘Outlook’.
Outlook

Transparency of FMO’s activities (Human Rights Grievance Mechanisms/
Environmental Grievance Mechanisms)

G4-HR12
G4-EN34

Our stakeholders demand increased transparency and accountability, especially with regard to environmental and social aspects. We have revised our Sustainability Policy and invested in extended and intensified stakeholder engagement. We disclose all contracted investments and implemented disclosure before contracting for investments with high ESG risk. FMO also has an Independent Complaints Mechanism.
Investing in local prosperity

FMO’s Independent Complaint Mechanism received no admissible complaints in 2017.
Independent complaints mechanism

Enable impact investing (FMO own developed aspect)

FMO specific

Stakeholders ask us to behave as market makers, building investment opportunities with impact and risk profiles that meet their needs. We try to bundle public and private resources in our projects.
Our business model

We undertake efforts for blending public and private capital, for example in government funds, FIM and through syndications. In 2017 we catalyzed EUR 1,111 million.
Being the preferred partner

Inclusive development (FMO own developed aspect)

FMO specific

Stakeholders indicate the importance of, among other things, supporting economic growth, decent job creation, reducing inequality and climate action. FMO works with clients who are directly serving people at the Bottom of the Pyramid and improving gender equality. We select and screen these clients in our investment process.
Our investment process

Our deal teams register results on impact indicators in the Impact Cards. Results on the supported smallholders, connections to electricity grids and Micro and SME loans are described in paragraph ‘Performance’.
Investing in local prosperity

Indirect environmental footprint (Emissions)

G4-EN19

Stakeholders indicate the importance of combating climate change. We aim to halve our environmental footprint by doubling the expected amount of GHG avoided via green investments. Green investments are primarily transactions in renewable energy and energy efficiency. We select and screen these transactions in our investment process.
Our investment process

We use our Impact Model to measure GHG emissions avoided in our investments. In 2017 our investments enabled the avoidance of 1,600,000 tons of GHG. For the governance and methodology of our Impact Model see paragraph ‘How we report’.
FMO impact model

Innovations and knowledge management at FMO (FMO own developed aspect)

FMO specific

A key input for success is knowledge (technical, financial and otherwise) from our employees, clients, other DFIs or knowledge partners. Knowledge is important intellectual capital and we transfer best-practice knowledge to our clients also: in our Capacity Development program we provide technical assistance to clients.
Our business model

Part of the added value to our clients is our technical assistance or Capacity Development. In 2107 we supported 73 clients with knowledge on issues important to them.
Being the preferred partner

ESG risk management (Product Portfolio: sector specific)

interactions with clients / investees / business partners regarding environmental and social risks and opportunities (former FS5)

Following international standards and setting ESG requirements for clients will ensure compliance with regulations and contribute to the realization of SDGs. We assess projects on ESG effects benchmarked against IFC Performance Standards during due diligences and monitoring phases. If needed, we agree on action plans and support our clients with technical assistance.
Our investment process

The agreed upon ESG action plans must ensure compliance within set timeframes. 90% of actions due in a certain year must be implemented. When deadlines for action items are postponed, approval from Credit Risk Management (second line of defense) needs to be obtained. In 2017 89% of the ESG actions due were implemented.
Investing in local prosperity

Support Dutch companies (FMO own developed aspect)

companies
FMO specific

Value for the Netherlands: FMO has taken steps to play a central role in assisting Dutch companies with investments abroad through its subsidiary NEDLINX B.V. In these activities, FMO will uphold its approach to being additional to the market and preventing competition with commercial financiers.
Our approach

We have taken concrete steps to support Dutch businesses with willingness to invest in developing countries and emerging markets.
We closed a total of EUR 84 million new commitments that involved Dutch companies. The NL Business department built up a broad pipeline of export finance transactions.
Being the preferred partner