Dutch development bank FMO has a keen eye for sustainability in finance. In addition to providing finance FMO works with its clients to embed risk relevant environmental and social (E&S) standards at the clients and projects it finances. When lending through Financial Intermediaries (FIs) in emerging markets, FMO also wants appropriate E&S standards to be applied by these local banks. This means that FMO expects its intermediaries to install checks & balances to ensure adequate environmental and social risk mitigation. FMO hired Steward Redqueen to train its staff on how to engage with FIs on the rationale for good E&S management and mitigation and how to assess the quality of an FI’s E&S management system.
We developed a 2-day course that helped FMO staff to understand the materiality of E&S risk for financial institutions, how these FIs can develop an E&S management mechanism and how this mechanism can be assessed. Through presentations, real life case studies, discussions and role play, FMO’s investment staff learned how to put E&S management in practice.
The training showed investment officers that E&S management, and the opportunities it provides, can add value to the strategic relationship with a client and a new way of looking at business risks and opportunities.