At the selection stage for private equity investment FMO adheres to the FMO exclusion list, please refer to: http://www.fmo.nl/exclusion-list.
In addition, all our direct investment clients are required to comply with national E&S law as a minimum standard, and with the Environmental and Social Performance Standards, as developed by the International Finance Corporation (IFC), member of the World Bank Group, whichever stricter. All new and existing clients are subject to a Risk Categorization (there are four risk categories A, B+, B and C) of their (potential) Environmental and Social impacts. FMO selects clients based on their willingness to comply (over time) with local and international ESG standards. Together with the client, FMO strives to identify each client’s individual ESG business case. If necessary, FMO contractually agrees upon “SMART” (specific, measurable, achievable, realistic and time-bound) action plans with high risk clients and shall have dedicated personnel to support these clients. Successful results in implementing these action plans demonstrate FMO’s ESG development impact and added value.
- ESG Rapid Risk Screening templates or FMO ESG Toolkit – E&S officer or analyst provides advice and support to FMO Investment Officers - FMO's credit department/Investment Committee has dedicated ESG capacity (4 eye principle) providing objective feedback on the ESG analysis attached to the investment proposals being made by FMO's front office. This is a formal part of FMO's investment policy.
- On high and medium/high risk investment the E&S officer conducts an E&S due diligence (in some cases with support from an external ESG consultant) on the fund manager or the company. E&S officers provides advice and support to FMO Investment Managers - FMO's credit department/Investment Committee has dedicated ESG capacity providing objective feedback on the ESG analysis in the investment proposals being made by FMO's front office. This is a formal part of FMO's investment policy.
- Internal credit department can turn down investment proposal for reasons of ESG issues in the project - IC approval often contains strict ESG conditions.