AFD - 2019 Universal registration document

STATEMENT OF NON-FINANCIAL PERFORMANCE Identification of the main non-financial issues and risks

2.1 The business model

Under Chapter 1 of this document (Activities of Agence Française de Développement Group in 2019).

2.2 Identification of the main non-financial issues and risks

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the most relevant information for its corporate and social responsibility report based on its activities, its own objectives, and the expectations of its external and internal stakeholders. AFD Group conducted an initial materiality analysis in 2015, based on the issues predefined by the GRI (3) . The analysis initially identified the 58 CSR issues falling within the scope of the Group’s activity. Then it short-listed the issues considered to be the most significant, based on document analysis, benchmarking conducted on similar institutions and interviews with senior management. This resulted in a list of 16 material issues that were approved by Senior Management. This materiality analysis was updated in 2017. To take account of changes in the international context and French society, and to reflect changes in the Group’s strategy. Some of the issues were reformulated and four new issues were added: P impact of activities on local communities and indigenous populations; P promoting diversity within teams; P employee support as part of the Group’s transformation (agility, stress management, well-being); P synergies with the private economic sector to benefit the SDG. These issues were then prioritised by means of a ranking produced by internal and external stakeholders (4) , in order to obtain the updated materiality matrix shown in Appendix Ǿ 10.

Pursuant to the transposition into the French law-books of Directive 2014/95/EU pertaining to non-financial reporting by companies (see above), the Statement of Non-Financial Performance is based on the main non-financial risks and issues facing the AFD Group. i. The priority risks were identified through an operational risk mapping exercise. A real risk management tool, this exercise consists in (i) Ǿ listing and assessing operational risks (1) and (ii) Ǿ for each of them, identifying the means of control, checks in place, and any action plans that will help improve risk management. Each structure identifies and lists three types of risk in its mapping: P risks generated by its activity; P risks with a significant and specific impact on its activity; P risks it helps to manage (to detect, prevent, monitor and/or manage when it occurs). The mapping of operational risks is regularly updated using a bottom-up approach, i.e. the risks are identified and rated by the business lines, at the lowest level of the organisational chart).The risk guideline is sharedby all theGroup’s structures. It comprises 80 risks, classified in 7 categories (2) . In the last update, special attention was paid to risks associated with the Information System. ii. The non-financial issues deemed most relevant for the AFD Group were identified and ranked based on a materiality analysis. This analysis aims to offer a view of the most important issues for the organisation, in order to select

(1) Based on banking regulations, the operational risk for financial institutions is “the risk of losses resulting from inadequate or failed processes, employee and internal systems or external events”. (2) The seven categories of potentially risk-generating events defined by the Basel Committee on Banking Supervision (Basel II) are as follows: internal Ǿ fraud; external fraud; employment and job security practices; clients, products and commercial practices; damage caused to physical assets; interruption of business and malfunctioning systems; execution, delivery and management of processes. (3) Global Reporting Initiative, NGO. (4) For the rating of the issues, a questionnaire was sent to 106 people (of which 41 are outside the Group); 45 people answered (of which 17 people outside the group).

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UNIVERSAL REGISTRATION DOCUMENT 2019