| Paris alignment | Reasoning |
|---|---|
| N/A | FMO is in the process of considering the application of a shadow carbon price but does not currently apply it to any operations. Once the Bank finalizes its Paris Alignment and climate risk approaches, this metric will be updated accordingly to reflect the outcome of this process. |
Explanation
FMO is in the process of considering the use of a shadow carbon price as part of developing its approach to Paris Alignment and climate risk. Discussions with the Bank suggest that FMO’s current portfolio, which includes a relatively small number of high-emitting investments (above an inclusion threshold comparable to peer institutions), may limit the applicability of such a tool, even if it were adopted.
Recommendation:
- Once FMO has finalised the development of its Paris Alignment and climate risk approaches, it should clearly communicate (as part of publicly available documentation) the reasoning for the decision reached on the utilisation (or not) of a shadow carbon price.
Last Update: February 2024