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. We assess the impact and business success of our investee projects or companies on an annual basis.
In addition to tracking our clients' progress on their action plans, we also measure the impact created through each of our investments. This allows us to quantify and track our progress towards our goal of doubling impact and halving footprint by 2020.
We have created several tools for this purpose:
- A scorecard for every project, which we use to track credit risk and development impact indicators
- Sustrack, our proprietary monitoring system, which tracks our clients’ progress in the defined action plan in the areas of environmental, social and governance standards
- An impact model, which predicts the direct and indirect employment and GHG effects of the projects underlying our investments
- A GHG tool to indicate emissions for the larger GHG emitting projects
Harmonizing development indicators
FMO is constantly looking for innovations in ESG adoption. For this reason we participate in various working groups that aim to:
- Create best practices, guidelines and criteria
- Harmonize the number of international standards
- Improve clarity and efficiency in reporting