AFD - 2019 Universal registration document

STATEMENT OF NON-FINANCIAL PERFORMANCE 2 Identification of the main non-financial issues and risks

For the purposes of the Statement of Non-Financial Performance, AFD Group led a review of priority issues and risks at the end of 2018. This exercise was managed by the Strategy Department (responsible in particular for the corporate social responsibility process) and the Finance Department, in collaboration with the Risk Department. The review was underpinned by an analysis of the AFD Group’s main strategic documents and by interviews conducted internally. In particular, it consisted in examining the mapping of the Group’s operational risks and in comparing it with

its materiality matrix of non-financial issues. It was performed in three stages: P review of the presentation of risks and the coverage of main risks; P review of the information on the risk identification, ranking and approval process; P review of the link between non-financial risks and the overall risk mapping, and alignment with the material issues presented.

The review made it possible to target the main non-financial risks presented in the Statement of Non-Financial Performance and to refine their correspondence with non-financial issues, leading to the list of 15 issues associated with these risks guiding the Statement of Non-Financial Performance. The 2019 Statement of Non-Financial Performance follows this structure (see table below). The formulations have been modified to more accurately reflect the scope of the risks that are effectively reported.

Correspondence with Statement of Non-Financial Performance

Issues included in the materiality matrix

Risks associated with each issue

Transparency of granted funds

§ 2.5.1

P Risk that financing beneficiaries and customers may find it difficult to program their operations within known and controlled deadlines P Risk of discrepancies between the expectations and requirements of the stakeholders and AFD’s services (projects funded) P Reputational risk related to the projects’ negative impact on the population or environment P Risk of non-compliance with procedures for managing recipient complaints P Risk of lack of coordination with the other actors (international and European lessors, civil society organisations) for the financed projects P Risk of non-compliance with delegated fund management procedures P Risk of non-compliance with procedures and contractual clauses by project managers P Reputational risk related to misalignment between the projects funded and the strategic areas defined by the SDGs and the Paris Agreement (misaligned interests) P Reputational risk related to discrepancies between the projects funded and the strategic areas defined by the SDGs and the Paris Agreement P Risk of non-compliance with AFD’s obligations in terms of impact analysis and compliance with environmental standards P Risk of discrepancies between the funding offered and the operational context P Risk of non-compliance with AFD’s obligations in terms of impact analysis P Risk of non-compliance with procedures for managing recipient complaints

§ 2.5.2 § 2.4.3.3 § 2.6.1

Dialogue with stakeholders

§ 2.3 (2.3.1, 2.3.2)

Management of impacts

Coordination with development actors

§ 2.6 (2.6.1, 2.6.2) § 2.4.3.3

§ 2.6.3

Stronger project management

Impact on the SDGs

§ 2.4 § 2.6

§ 2.4.3

Impact on climate change

§ 2.3 (2.3.1, 2.3.2)

Analysis of environmental risks

§ 2.3 § 2.4 § 2.5.2

Impact on local communities

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UNIVERSAL REGISTRATION DOCUMENT 2019

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