The Supervisory Board advised the Management Board in the strategy process. We engaged in-depth with the Management Board in various formal and informal meetings. In addition, we held various sessions with the strategy consultant Boston Consulting Group, discussing FMO’s long-term value creation and strategic options for the future. We fully support the outcome of this process and approved important elements of the strategy in our meeting of February 14, 2017 and a final version in June 2017.
With its new strategy, FMO steps up its ambition to increase its impact, deepen client relationships and become more productive. Most importantly, it reflects the wish of FMO to deepen its development impact with its clients but also for stakeholders surrounding the client. It is ultimately global ‘society’ that matters for development. This integrated approach is well reflected in FMO’s aim to be the preferred partner to invest in local prosperity. FMO partners with its clients, non-governmental organizations, other public and private investors and the State of the Netherlands to offer climate solutions, increase decent employment and reduce income inequality.
To do this, FMO needs to further strengthen the focus of its operations. The choice to deepen the focus on energy, financial institutions and agribusiness, food & water is logical to us, as is the choice to stop financing other sectors (including general manufacturing and services). FMO will also strengthen its country focus. Prioritization will be given to impact creation in least developed countries in Africa and Asia, while operations in China and the Balkans will stop. Having said that, we fully support FMO’s ambition to increase investments in the ‘Circle around Europe’. This will support local economies in Northern Africa and the Middle East.
We also applaud that FMO further stepped up its client ambitions in line with the Paris Climate Agreement. FMO is currently analyzing what a 1.5 - 2.0-degrees Celsius pathway would require for FMO’s net GHG emissions going forward. Before 2017 FMO already decided to stop direct investments in coal and coal fired power plants and going forward will focus primarily on renewable energy. We expect FMO to further shape its climate action strategy that will lead the organization on a path which is compatible with the 1.5 - 2.0-degrees Celsius goal going forward.