ESG action plans

ESG action plans have been a part of FMO's financing process for many years. Over the past few years we have made these plans SMART, which means we now aim to help improve our clients' ESG performance in a more concrete and practical way. For each action plan, we identify the most relevant ESG criteria, assess which criteria have been met and list the measures that need to be taken to meet those still outstanding. The ultimate goal of these measures is to mitigate a client's ESG risks and if possible capitalize on ESG opportunities. We agree on changes with the client, which may include reducing CO2 emissions, obtaining an independent certification, improving labor conditions, or meeting legal minimum wage requirements.

We oversee action plan implementation through our proprietary Sustrack monitoring system, used for the first full year in 2011 following its 2010 introduction. Sustrack allows us to monitor the ESG performance of clients on a continuous basis, enabling swift intervention when necessary.

We help clients to meet ESG requirements where possible and enter into dialogue with clients who fail to implement measures agreed upon in their ESG action plan. The ESG standards FMO applies are those of the International Finance Corporation. (For more on the IFC Performance Standards, see www.ifc.org). We also adhere to or are an active subscriber to and/or participant in:

In 2011, we again demonstrated our commitment to ESG by achieving 80% of our 128 action items. Since 2010, FMO has set a company-wide target to realize at least 80% of the overall action items due each year. It is our aim for 2012 to realize at least 85% of all the agreed action items due in 2012. Our directors and managers are responsible for meeting the targets, making FMO one of the first banks to add ESG targets to its financial targets.