To help our direct investment clients establish sound E&S practices, we use a practical framework. The framework comprises of three parts: (1) Risk Categorization of clients, (2) Establishing applicable requirements, and (3) Environmental and Social Action Plans.
All FMO's higher risk clients are required to implement an Environmental and Social Management System (ESMS). This ESMS is customized for each type of client. In certain cases, FMO has funds available to improve ESG policies and procedures and offer training to clients.
FMO has also incorporated a sustainability policy requiring additional E&S assessments on transactions that trigger human rights and land governance issues in the due diligence process. FMO has also updated its guidelines for investing in hydropower plants and implemented more rigorous standards for assessing the E&S impacts of the project.
For more information see also our ESG Policy at: https://www.fmo.nl/esg-toolkit