AFD // 2021 Universal Registration Document

STATEMENT OF NON-FINANCIAL PERFORMANCE 2 Contribution of the Group’s activity to sustainable development

2.4.3 Impact of the Group’s activity on climate change 2.4.3.1 The 2017-2022 Climate and Development strategy AFD Group’s commitment to the climate has become a key feature of its action. Committed to this global issue for more than fifteen years, the Group is actively involved in the work around the Paris Agreement and the SDGs. The “Climate and Development” strategy (1) (2017-2022) adopted by the Board of Directors in 2017, is based on four objectives: i. ensuring its activity is “100% Paris Agreement”: making all the Group’s financing consistent with resilient and low-carbon development, in particular by adopting a new framework of questioning for the “sustainable development” analysis of projects; ii. increasing climate finance: 50% of the Group’s annual financing in foreign countries is aimed at projects with climate co-benefits, exceeding the target of €5bn for the climate in 2020 (including €1.5bn dedicated to adaptation), and a significant contribution from 2021 to achieving France’s new climate finance target set at €6bn/year, including €2bn for adaptation (reported in the UN Framework Agreement on Climate Change – UNFCCC) for the 2021-2025 period; iii. redirecting financial and investment flows: maximise the knock-on effect of its financing on the assignment of private and local investments; develop new high-volume, high impact instruments; and integrate financial climate risks (physical and transition) into its risk analysis and credit decision processes, as attested to by the Group’s first TCFD report (2) (Task Force on Climate Related Financial Disclosure), published in 2021; iv. co-developing solutions and shaping standards, in particular through its partnership strategy and by participating in major international events and in discussions on climate finance and support for knowledge production. In 2020, in accordance with the commitment made when it was adopted in 2017, AFD conducted a mid-term review of the climate strategy (3) . It confirmed that AFD is on track to achieve, or has already achieved, many of the targets set in 2017. Significant results should be highlighted in terms of the volume of climate finance, influence in the debates related to the alignment with the Paris Agreement, the Group’s positioning as a key player on the climate, recognition of the role of development banks and their IDFC platform (4) . Several projects launched as part of this mid-term review target a more comprehensive and ambitious implementation of the climate strategy and prepare the foundations for the future post-2022 strategy, which will

be built around the necessary convergence of climate and biodiversity issues. At COP26, in Glasgow, and in accordance with the mid-term review of its energy transition strategy, AFD committed to no longer financing fossil fuels, including as regards electricity and heat production from natural gas. 2.4.3.2 AFD’s climate financing in 2021 Climate financing in 2021 represented 56% of total commitments in foreign countries with €5.99bn in financing across all regions, including the French Overseas Departments and Collectivities. In Foreign States, the AFD Group approved 332 climate projects, for a total amount of €5.75bn in financing. The Group therefore exceeded the 50% target set in 2012 and renewed in its Climate and Development strategy. Climate projects in foreign states financed in 2021 covered two areas: P climate change mitigation: €3.79bn in financing; P adaptation to the impacts of climate change: €1.96bn in financing. They are 147 ɸ mitigation projects in foreign states that will contribute to avoiding 5.3 ɸ MTeq ɸ CO 2 per year throughout their life cycle. The Group is also continuing its action in the area of sustainable bonds. In2014, theGroupwas the first issuer of agreenbond in the French public sector, focused on the climate (€1bn at ten years), then, in 2017, it adopted a programmatic framework for climate bonds and continued its policy of regular issuance of climate bonds. The Group reached a new milestone in this field in 2020, with the publication of a renewed SDG-focused programmatic framework (5) . The purpose of this benchmark document is to reflect the Group’s actions in all their environmental and social dimensions; it naturally follows the four pillars of the “Green Bond Principles & Social Bond Principles”, namely the justification of the use of funds, the process for examining the projects financed, the monitoring of flows and the requirement for robust reporting. After an inaugural issue in 2020, the AFD Group completed 48% of its 2021 programme in thematic form, issuing a €2 billion 10-year sustainable bond and a 1.7 billion 7-year sustainable bond (6) . 2.4.3.3 A stronger partnership strategy In 2021, AFD played an important role in keeping the climate and the SDGs at the top of the international agenda. At COP26, in Glasgow, AFD was reappointed as Chair of the International Development Finance Club (IDFC), which it has held since 2017; this club brings together 27 national and regional development banks. As such, AFD is working to better integrate climate issues at the technical and strategic levels. The second

(1) https://www.afd.fr/en/ressources/climate-development-2017-2022-strategy (2) https://www.afd.fr/en/ressources/afd-group-tcfd-report (3) https://www.afd.fr/en/ressources/climate-development-2017-2022-strategy-midterm-review (4) International Development Finance Club. (5) https://www.afd.fr/sites/afd/files/2020-10-07-38-47/sdg-bond-framework-afd.pdf (6) https://www.afd.fr/en/actualites/communique-de-presse/afd-successfully-launches-eu2-billion-0125-regs-sustainable-benchmark-due-29 september-2031

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2021 UNIVERSAL REGISTRATION DOCUMENT