FMO has launched its Position Statement on Fossil Fuels in Direct Investments. This Position Statement sets out FMO’s firm commitment to phase out fossil fuels in direct investments from its portfolio.
The publication of the Position Statement follows a consultation process with FMO’s stakeholder community – including the Dutch government, several NGOs and peer financial institutions.
- FMO will no longer invest directly in upstream or mid-stream stand-alone fossil fuel-related activities.
- We will actively seek investment opportunities that support the transition to a low-carbon system.
- In five years, we will phase out direct investments in integrated mid/down-stream fossil fuel activities for power generation. During this transition period, the direct financing of gas-based and distributed power projects is only possible under exceptional circumstances and should meet a set of transition criteria as set out in the Position Statement.
New commitments to Climate Action
In our strategy, Climate Action has been identified as one of the three top-line Sustainable Development Goals (SDGs) to which we can particularly contribute. In practice, this means pursuing a portfolio that delivers positive outcomes on climate mitigation and adaptation. As climate change affects developing countries most, we strive to align our portfolio with a 1.5°C pathway.
In this new Position Statement, FMO commits to limit GHG emissions and further reduce fossil fuel investments, by no longer directly investing in upstream or mid-stream stand-alone fossil fuel-related activities. Furthermore, in five years, we will phase out direct investments in integrated mid/down-stream fossil fuel activities for power generation. During this transition period we will only directly finance gas-based and distributed power projects under exceptional circumstances that are critical to safeguard energy security at affordable prices, and which also meet a set of transition criteria.
After this transition period, we will no longer invest in gas-based power generation and review the relevance of the transition criteria for distributed energy solutions. Furthermore, we will actively support the development of the technological solutions that are necessary to complete the transition to a low-carbon system.
This Position Statement is an integral part of the FMO Sustainability Policy Universe and it is complementary to our Position Statement on Coal Power Generation and Coal Mining which was published in 2016.
Outcome of the consultation process
In the last quarter of 2020, we conducted a public consultation round and organized consultation sessions with targeted stakeholders. We received written contributions from—among others—NGOs, business and industry associations, and academia. The consultation sessions were attended by 19 different organizations, including NGOs, banks and the Dutch government.
The input and feedback received helped us to further refine the Position Statement. Moreover, it led to new insights and constructive discussions to further our Climate Action Agenda. In our Consultation Report you can find a summary of the main elements of the feedback received during the stakeholder consultation and FMO’s findings on, and response to, this feedback.