AFD - Universal Registration Document 2020

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

P the policies and action plans implemented to control these risks; P the results, including key performance indicators. As an entity whose securities are permitted in negotiations on a regulated market, the AFD is required to produce this new statement, as from financial year 2018. The methodology used is described in the methodological note (see Appendix 9 below), while the actual statement is presented below.

This statement provides information on the manner in which the Group monitors the social and environmental consequences of its activity and – for listed or related entities, including AFD – the effects of this activity on human rights and the fight against corruption and tax avoidance. As such, it details: P the business model; P the main risks related to the company’s activity, including, when relevant and proportionate, risks created by its business relations, products and services;

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2.1 The business model

AFD’s business model is presented in Chapter Ǿ 1 of the 2020 Universal Registration Document.

2.2 Identification of the main non-financial challenges and risks

materiality analysis. This analysis aims to offer a view of the most important issues for the organisation, in order to select 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. The AFD Group conducted an initial materiality analysis in 2015, based on the issues predefined by the GRI (2) . 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. 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.

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. P The priority risks for the Group are identified mainly through two mapping exercises: P the regulatory mapping of operational risks: it is based on the classification of the seven Basel risk families (1) . It is updated annually and reflects the vision of the business lines, with risks being identified and rated by managers at the finest level of the organisation chart (bottom-up approach), P the mapping of AFD’s major risks: all of AFD’s executive directors and of Proparco’s Senior Management are asked to express their views on “major risks”, namely the major risks likely to limit or prevent the achievement of the Group’s strategic objectives and/or threaten its main assets (top-down approach). These two approaches are complementary: they make it possible to compare the risks identified at the closest level by the business lines and the risks identified by the executive body, and to prioritise the actions to be taken to strengthen the risk management system. P The non-financial issues deemed to be the most relevant for the AFD Group were identified and ranked through a

(1) The seven categories of potentially risk-generating events defined by the Basel Committee on Banking Supervision (Basel Ǿ II) are as follows: internal 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. (2) Global Reporting Initiative, NGO.

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2020 UNIVERSAL REGISTRATION DOCUMENT