Case study: How FMO works with its clients and customers to encourage sustainable practices
Established in 1970, FMO is a development bank that operates with both public and private backing. The Dutch government is the primary shareholder, owning 51% of the company. The remaining shares are held by major Dutch banks (42%) and a combination of employers’ associations, trade unions, and individual investors (7%). FMO is active in over 85 countries, providing private sector businesses and financial institutions in developing and emerging markets with a range of financial products, along with expertise and access to its networks. FMO is a signatory of the Principles for Responsible Banking (PRB) and is, accordingly, working with its clients and customers to encourage sustainable practices and enable sustainable economic activities. Tweet This!
This case study is based on the 2022 PRB Reporting and Self-Assessment Template by FMO, prepared in relation to its implementation of the PRB, that can be found at this link. Through all case studies we aim to demonstrate what ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Which Principles for Responsible Banking have been addressed?
The Principles for Responsible Banking addressed in this case are:
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- Principle 3: Clients and Customers
- Principle 4: Stakeholders
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With this case study you will see:
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- How FMO proceeded with stakeholder identification and consultation, and
- How FMO worked with its clients and customers to encourage sustainable practices and enable sustainable economic activities
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Stakeholder identification and consultation
Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.
FMO engages with a wide range of stakeholders, including customers, its employees, government bodies and public investment partners, investors, shareholders, regulators/supervisors, NGOs/civil society, and think tanks/academia through regular stakeholder dialogues.
Materiality Assessment
Every year, FMO conducts a materiality assessment to identify issues that may impact its business or its stakeholders. The insights from this process guide FMO’s strategy, goals, and reporting.
Customer Satisfaction Survey
Annually, FMO performs a customer satisfaction survey to understand how its customers view its products and to identify ways FMO can better support their business operations.
Employee Engagement
Each year, FMO conducts an employee engagement survey to gain a comprehensive understanding of the satisfaction and engagement levels among its staff.
How did FMO work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?
In its 2022 PRB Reporting and Self-Assessment Template FMO reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:
ESG Risk Management
FMO evaluates and categorizes all potential investments based on Environmental, Social, and Governance (ESG) risks. FMO has 29 ESG specialists who are integrated into its investment teams. These specialists are actively involved in all transactions with high ESG risks, assisting with due diligence and transaction monitoring. They evaluate a potential client’s performance against FMO’s ESG standards, identify risks and opportunities for improvement, and develop action plans.
Once an investment decision is made, ESG requirements are incorporated into a client’s contract. FMO monitors the implementation of ESG actions through regular communication and site visits, often with the support of independent consultants.
Capacity Development
FMO offers Development Contributions, including Technical Assistance (TA), to enhance the organizational capabilities of our clients, investees, and prospects.
Sector Initiatives
Sector initiatives are projects aimed at addressing systemic ESG and impact challenges within a specific sector or region. These initiatives leverage FMO’s ability to convene diverse perspectives and stakeholders to drive positive change. In 2021, several sector initiatives were underway, with new ones also being launched.
UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet
With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.
FBRH Principles for Responsible Banking (PRB) Assurance:
First class PRB assurance services: The result of solid, hands-on ESG/ Sustainability experience
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- FBRH is a GRI Certified Training Partner (Global), ISEP Training Centre and a member of CPD.
- FBRH builds trust. Over 200 reviews from top professionals from around the world demonstrate our ability to build strong, trusting business relationships.
- FBRH possesses a unique skill set that combines ESG/sustainability certified training, experience in advisory services and report preparation, and ESG/sustainability report assurance.
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The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.
References:
This case study is based on published information by FMO, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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