We measure our impact on employment and environment, through jobs supported and avoided green house gas emmissions (GHG).
Employment reflects core economic and social effects of an investment, while green house gas (GHG) avoided indicates how we contribute to limiting climate change.
In 2014, FMO developed its impact model, measuring the direct and indirect impact and the footprint effects of our investments. It is an economic input-output model that calculates how a capital investment is expected to influence production, economic growth, jobs and greenhouse gas emissions in a country. The model is a best practice of its kind, using macroeconomic and greenhouse gas emission databases, giving fair estimations – based on historic country averages – of the impact of our investments on the economy and GHG emissions levels of a country.
We calculate the avoided GHG of our clients for the so-called green investments, which meet FMO's criteria of Green finance. GHG avoidance is calculated using data sources verified by independent third parties such as the Clean Development Mechanism. We report on these strategic impacts in our annualreport.fmo.nl.
For the funds we manage on behalf of the Dutch government, we conduct two types of studies which are outsourced to independent research agencies. Effectiveness studies look at the ex-post financial and development results of (a combination) of clients. Impact evaluations are broader and also look at the effects at end-users level of a specific FMO client. The latter considers baseline and end line measurements over a longer period of time. Where possible, the results are compared to groups which were not involved in the activities of the FMO client.
In addition to the knowledge we gain from our impact model and from collecting data from our portfolio, we conduct an annual sector evaluation. The goal is to assess the effectiveness of FMO's support to projects and businesses in the selected sector as well as the performance of these projects and businesses. We focus evaluation work on a different sector each year, thereby aiming for in-depth understanding of FMO's policy and strategy implementation. Sector evaluations are published in our reporting center.