| Paris alignment | Reasoning |
|---|---|
| Paris aligned | FMO has shown extensive institutional cooperation working in partnership with other development finance institutions as part of the Association of European Development Finance Institutions (EDFI) association, and in the creation of programmes under the European Fund for Sustainable Finance Plus (ESFD+). |
Explanation
FMO displayed initiative to be a leader among development finance institutions (DFIs) when it made an early public commitment to align its portfolio with 1.5°C in 2017. Moreover, the Bank signed the Climate Commitment of the Dutch Financial Sector in 2019, despite primarily having a portfolio outside the Netherlands and the EU. This enables FMO to act as a conduit for sharing experience between Dutch financial institutions and the Bank’s markets of operation regarding climate action plans and low-emission growth.
In terms of institutional cooperation, FMO is a signatory of the COP26 joint statement on ending international public support for fossil fuels, joining other development banks such as AFD, EADB, and the EIB. FMO is also a member of the European Development Finance Institutions (EDFI) association. As part of the EDFI, the Bank signed a joint statement in 2020 to phase out fossil fuels, mobilise private sector climate finance, and align with the Paris Agreement. FMO has since operationalised this commitment by releasing annual reports on TCFD disclosures, and updating its position statement on fossil fuels.
Recently, FMO was approved for three new programmes with a (partial) focus on climate action for a total amount of over €500 million, under the European Commission’s European Fund for Sustainable Development Plus (EFSD+). Under this context, FMO has also been supporting fellow EDFI members in establishing joint ESFD+ programs with a focus on climate action (particularly in the forestry and renewable energy sectors). Outside of the EU, FMO is working with the United Kingdom government on the Mobilising Finance for Forests (MFF) program to spur private sector investments in sustainable forestry practices.
On thought leadership, FMO has organized discussions and conferences on the future of finance, Africa’s fast-growing agribusiness companies (known as the “Cheetahs”), Investing in Forests and Sustainable Land Use and the future of energy. It is also noteworthy to mention FMO’s thought leadership in scaling up adaptation finance in the private sector, through both the Bank’s involvement with The Dutch Fund for Climate and Development (DFCD), and the Adaptation and Resilience Investors Collaborative.
Recommendation:
- To be ‘Transformational’ in this category, FMO could consider leveraging its unique position as a private-sector-oriented financier to more actively lead in areas such as mobilising private sector adaptation finance. This could be done by taking up leadership and convening roles in DFI coalitions and sharing best practices through these platforms.