Non-fossil to fossil energy ratio and scaling up climate investment in all sectors

Paris alignmentReasoning
Some progressFor every €1 FMO provided to fossil fuels, €5.3 went to renewables in the period 2018 – 2022. FMO aims to have an investment portfolio of at least €10 billion in SDG13 by 2030. The proportion of new green-labelled investments as to total new investments in relation to total new investments has been steadily increasing from 36% in 2018 to 41% in 2022.


For every €1 FMO provided to fossil fuels, €5.3 went to renewable energy in the period 2018 – 2022. Relative to other Banks covered in the E3G Public Bank Climate Tracker Matrix, this is among the better ratios. Moreover, it is expected to improve rapidly over the coming years, in light of FMO´s commitments on phasing out fossil fuels and emissions reductions (50% by 2030) in their power generation portfolio.

In terms of transparency, FMO has an overview of all projects in a map on their website. However, this data is not downloadable in machine-readable format. FMO does not publish their project data in the OECD Climate finance Database nor the Public Finance for Energy Database

FMO finances “projects that reduce greenhouse gas emissions, increase resource efficiency, preserve and grow natural capital and support climate mitigation” in the framework of SDG 13 (Climate Action). Furthermore, the Bank is striving to align its portfolio with a 1.5°C pathway. The Bank’s green label is intended to support the steering of FMO’s portfolio towards greener investments, and is underpinned by FMO’s Green Methodology.

The Green Methodology applies for all green-labelled investments (including green bonds) with the requirement to meet FMO’s Green Principles[1]:

  1. Green-labelled investments contribute to a genuine improvement.
  2. Green-labelled investments should not contribute to a long-term lock-in of high carbon infrastructure.

The former requires that green-labelled investments go beyond regulatory requirements, are unrelated to local resources stress and are sustainable throughout the value chain of an industry or business. According to the Green Methodology, demonstrating improvement can fall under four non exhaustive categories:

  • Upgrade: when FMO’s investment goes towards replacing an activity or instrument that is 20% or more efficient than the previous one.
  • Expansion: when FMO’s investment goes towards an expansion replacing an activity that is 20% or more resource-efficient than the current company practice.
  • Greenfield: when FMO’s investment goes towards replacing an activity that is 20% or more resource-efficient than current industry practice, based on the amount of the Bank’s investment directed towards the specific greenfield.
  • Best available technology (BAT): BAT is only used in instances when proving or collecting the required information for the other criteria is not possible, meaning its usage has been very limited in practice. In such cases, the investment must comply with the Green Principles and make use of “the most resource efficient technology or approach that is widely available and applicable today” in a given context. To determine this baseline, FMO refers to “good practice guides” (such as the IPCC guides, EU Best Reference Guides, UNEP guides, and others), relevant regional or local sectoral benchmarks, as well as technologies with “high environmental standards” and/or those from advance, brand name, suppliers of the technology.[2]

In 2022, 33% of FMO’s total committed portfolio was labelled as green (€4.4 billion). FMO aims to have an investment portfolio of at least €10 billion in SDG 13, out of a total investment portfolio of €22 billion, by 2030.


[1] It is worth noting that FMO is also currently strengthening its Green Label criteria, involving greater alignment with the Common Principles for Climate Mitigation and Adaptation Finance Tracking.

[2] This information was received through communications with the Bank.  

Last Update: February 2024

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