AFD // 2021 Universal Registration Document

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

The AFD Group conducted an initial materiality analysis in 2015, based on the issues predefined by the GRI (1) . The analysis initially identified the 58 ɸ 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 ɸ material issues that were approved by Executive Management. This materiality analysis was updated in 2017. In order to take into account changes in the international context and in French society, and to reflect the Group’s strategic changes, some of the issues have been reformulated and four new issues have been added, namely: 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 (2) , in order to obtain the updated materiality matrix shown in Appendix ɸ 10 (3) .

As part of the Statement of Non-Financial Performance, the AFD Group conducted a review of priority issues and risks at the end of 2018. This exercisewas conductedby theStrategyDepartment (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 issues associated with these risks guiding the Statement of Non-Financial Performance in 2019, which, in 2020, were supplemented in by two issues: the promotion of diversity and inclusion, and the impact of the Covid-19 health crisis.

Correspondence with the sections of the Statement of Non-Financial Performance

Issues included in the materiality matrix

Risks associated with each issue

Transparency of funds granted

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 non-coordination with other players (international and European donors, civil society) in relation to funded 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

§ ɸ 5.1 and 5.2

§ ɸ 5.3 § ɸ 4.3.3 § ɸ 6.1

Dialogue with stakeholders

Management of impacts

§ ɸ 3 (3.1, 3.2)

Coordination with development players

§ ɸ 6 (6.1, 6.2) § ɸ 4.3.3

Reinforcement of project management

§ 6.2.2

Impact on the SDGs

§ ɸ 4 § ɸ 6

Impact on climate change

§ ɸ 4.3

Analysis of environmental risks

§ ɸ 3 (3.1, 3.2)

(1) Global Reporting Initiative. (2) To rate 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). (3) It will be updated in 2022, in a Group format integrating Expertise France, its business lines and its challenges.

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2021 UNIVERSAL REGISTRATION DOCUMENT