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Development impact

A larger ambition

FMO invests with the goal of having broad economic, social, environmental and governance impact in our clients’ countries. And we make measuring and tracking this development impact part of our service.

Broad economic impact

Sustainable enterprises can generate positive development effects as well as long-term profitability. By investing in these enterprises, FMO helps stimulate the private sector. A healthy private sector fuels the economy by creating jobs, providing income and improving living standards – generating lasting development impact.

The ESG chain

We work with companies that commit to meeting specific environmental, social and governance (ESG) performance standards. Measures may include cutting carbon dioxide emissions, improving labor conditions, meeting legal minimum wage requirements or implementing policies for governance. 

Measuring & monitoring

FMO considers expected ESG impact from the first review. We work along with our clients to identify criteria and define action plans to optimize this impact, closely monitoring the progress and offering support when needed. 

After five years, or upon program exit, we evaluate this impact – assessing the business success of the project or company, but also the extent of impact it has made on the local economy, community and environment.

We have created several  tools for this purpose, such as:

  • An Economic Development Impact Score system – assessing a business’s contribution to the local economy.
  • The Development Impact Indicator – gauging the relationship between development impact and volume of new investment.
  • Sustrack – our proprietary monitoring system, which tracks our clients’ progress in the defined action plan in the area of environmental, social and governance standards.

Harmonizing development indicators

FMO is constantly looking for innovations in ESG adoption, participating in various working groups that aim to:

  1. Create best practices, guidelines and criteria
  2. Harmonize the number of international standards
  3. Improve clarity and efficiency in reporting