In the past few years, global developments and changing stakeholder expectations and regulations have affected FMO’s impact agenda such that we felt the need to review our ambitions and strategic priorities towards 2030. Progress towards achieving the Sustainable Development Goals (SDGs) is lagging behind worldwide: inequality is on the rise while the climate crisis continues to unfold. To counter this trend, there is an urgent need for more bankable opportunities. Some of our stakeholders expect us to develop these and other higher-risk investments, while others require us to limit our risk exposure. And while our customers ask for speed and simplicity, we are committed to complying with increasingly stringent regulatory requirements.
Taking this into account, we concluded that our current longer-term strategy (toward 2025) was directionally right. We will keep investing for impact in our three core sectors: (1) Agribusiness, Food & Water, (2) Energy and (3) Financial Institutions, focusing on Africa, Asia, Latin America and the Europe and Central Asia (ECA) region. That said, we will push boundaries on market creation and innovation, Reduced Inequalities, Climate Action and ESG management, and on mobilization.
Market creation: we will transform unbankable opportunities into bankable projects.
Innovation: we will create viable and scalable solutions for our customers and realize 10 meaningful innovations similar to what we achieved with, for instance, Climate Investor One, the Dutch Fund for Climate and Development and the Joint Impact Model Foundation.
Reduced Inequalities: we will increase inclusive business and gender lens investments, particularly in Least Developed Countries (LDCs), with a focus on fragile states.
Climate Action: we are committed to the goals of the Paris Agreement and to reach net-zero by 2050 through a just and inclusive transition. We will support customer alignment with the Paris goals and strengthen customer resilience. We will increase investments in mitigation, adaptation, resilience, and biodiversity, including forestry.
Through a just and inclusive transition, we make the link between SDGs 10 and 13, carefully balancing both social and environmental considerations, enhancing access to sustainable, inclusive and resilient livelihoods for all.
In 2030 we want to have developed a portfolio of at least EUR 10 billion in SDG 10 and at least EUR 10 billion in SDG 13.
ESG management: we will improve our ESG impact management, benefitting among others local communities, and enhance our transparency and disclosure practices.
Mobilization: we will scale our impact by developing and scaling (new) propositions for commercial financiers.
The name of our strategy towards 2030 – Pioneer - Develop - Scale – is derived from our so-called ‘progression model’. This model shows our long-term commitment to companies, supporting them from an initial high-risk phase to the point where commercial investors can (partially) take over from FMO. Also, by being a change agent on environmental, social and governance topics, we will create value with our customers, and together deliver impact in the societies and the local communities in which our customers operate.
New in this model is our focus on market creation: transforming nascent businesses into projects that are ready to be financially supported by investors willing to take higher risk. We do this, both by ecosystem building and by engaging with businesses directly. The purpose of market creation is supporting entrepreneurs who can accelerate change towards the Sustainable Development Goals.
Michael Jongeneel, CEO of FMO: “Today’s choices – or lack thereof – will profoundly shape the future and wellbeing of billions of people on earth. Our Pioneer-Develop-Scale strategy towards 2030 will maximize what we as a development finance institution can contribute to a world in which all people live well, within the boundaries of our planet. To thrive, people benefit from access to food, energy and finance. We support businesses that provide these products and services in an inclusive and sustainable way, through different stages of growth: pioneer, develop, scale. We are grateful to our stakeholders for providing invaluable input and co-creating our strategy towards 2030.”