How we measure impact


How we measure impact

We measure our impact on employment and environment, through jobs supported and avoided green house gas emmissions (GHG).

In 2017, we launched our renewed strategy as part of our endeavours to contribute to a world in which, in 2050, nine billion people will live well and within the means of the planet’s resources. Our strategy calls on us to create a higher impact portfolio, deepen our relationships and increase productivity. Through our financing and investments, we enhance our and others’ impact and can contribute to a sustainable society on a liveable planet.

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We support the 17 United Nations Sustainable Development Goals (SDGs) and aim to contribute to their achievement through our mission and activities. We aim to create a higher impact portfolio by focusing investments on three SDGs across all our sectors: Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10), and Climate Action (SDG 13). Through our sector-specific strategies, we also contribute to Zero Hunger (SDG 2), Gender Equality (SDG 5), Renewable and Affordable Energy (SDG 7), and Partnerships for the Goals (SDG 17). Meanwhile, we contribute to other SDGs by ensuring our investments comply with international ESG standards and policies.

FMO measures the impact of its investment operations via its strategic labels and impact indicators that are tied to our strategic impact goals.

Strategic Labels

Our labels highlight the way in which individual investments align with certain criteria related to key strategic goals. FMO sets itself targets around labels (the share of its portfolio directed towards certain strategic goals) and uses them as a steering metric. We disclose on our results via our (semi-) Annual Report.

Green label. For climate action (SDG 13), FMO’s ambition is to have an investment portfolio which is aligned with a 1.5֯ pathway. One way to support this ambition is to grow our “Green” portfolio, which is aimed at reducing greenhouse gas emissions, increasing resource efficiency, preserving and growing natural capital, and supporting climate adaptation. The “Green methodology” document describes our Green criteria, eligible investments and our internal green label process.

Reducing Inequalities label. The Reducing Inequalities label relates to SDG 10: Reduce inequality within and among countries. Reducing inequalities is also connected to gender and equality of opportunity for women and men (as reflected in FMO’s gender strategy and SDG 5). Two tracks underlie the SDG 10 label: investment in the poorest countries (reducing inequality among countries) and investment in inclusive business (reducing inequality within countries). These two tracks are combined in one target: a deal can acquire the Reduced Inequalities label by investing in a poorest country or in inclusive business.

Impact Indicators

FMO collects estimates of previous, current and future impact for its investments. Normally, 2-3 key impact indicators (from FMO’s set of impact indicators) are selected as representative of the impact narrative, and a baseline and future estimate are provided. Performance data on these indicators are collected annually and then used to compare actual performance against these estimates.

For the indirect effects of our investments for which no client data is available, FMO developed its impact model in 2014. This model measures indirect jobs supported of our investments and the footprint effects. 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 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. A description of the Impact Model is available on this page.

In 2019, as part of the EDFI harmonization program, a number of EDFI members took the initiative to develop a harmonized input-output model which estimates the indirect jobs effects (through the value chain) of our investments made. Harmonization required the alignment of the methodologies, underlying macro data and client data used to run the model. The Joint Impact Model that has resulted from this initiative was developed by Steward Redqueen. Besides the EDFIs, the African Development Bank and FinDev Canada have also joined. FMO will start to  report via the new model from the semi-annual report 2020 onwards. A dedicated website was launched on the Joint Impact Model (

Effectiveness studies and impact evaluations

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.

Sector Evaluations

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.