AFD Corporate Social Responsibilty 2015 GRI Report

C O R P O R AT E

SOCIAL

RESPONSIBILITY

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Summary 1 FOREWORD 2

ABOUT US Our Mandate Our stakeholders Our values An international presence Our activity

5 7 8 9 9 10 11

3 AN ORGANIZATION COMMITTED TO SUSTAINABLE DEVELOPMENT Highlights

Norms and standards

The ethics mechanism

Corporate Social Responsibility approach

Coordination of the approach

Governance of sustainable development Training

Evaluations of the approach

Transparency in Corporate Social Responsibility

14 15 16 16 17 17 18 19 19 20

4

AN ATYPICAL GOVERNANCE MODEL Appropriate means and financial instruments “Non-profit” financial model Specific governance

21 22 24 25

5

REPORT, INFORM, DIALOGUE Accessible, clear and transparent information Enhanced dialogue with stakeholders Responding to grievances by stakeholders Communicate on the use of Official Development Assistance

28 29 30 35 36

6 ENSURING AND PROMOTING SUSTAINABLE DEVELOPMENT IN OPERATIONS 6.1 Controlling risks of the misappropriation of aid, corruption, fraud, money laundering and terrorist financing 6.2 Managing the environmental and social impacts of projects

Environmental and social risk management during the project cycle

Due diligence by sector

Due diligence on human rights Training

37 38 41 43 45 47 49

6.3

50 51 53 56 58 60 60

Contributing to the Sustainable Development Goals Sustainable Development Analysis and Opinion Building the capacities of counterparts and partners Impacts on biodiversity Impacts on climate change Impacts on gender equality Social Business

3

C O R P O R AT E

SOCIAL

RESPONSIBILITY

7 7.1 7.2

PROMOTE A RESPONSIBLE ORGANIZATION IN ITS IN-HOUSE OPERATION Supporting career paths for all and a meaningful work environment Reducing the environmental footprint in in-house operation

8 METHODOLOGICAL NOTE

Determination of the content of reporting

Scope and period of reporting

Methodology to conduct the reporting

Reporting supports

Index of GRI G4 content

Verification of the reporting

Person to contact for further information

Reporting on the environmental and social risks of projects

Reporting on the impacts of financing in the field

Reporting on in-house social responsibility

Reporting on in-house environmental responsibility Appendix

C O R P O R AT E

SOCIAL

RESPONSIBILITY

4

62 63 72 74 75 76 76 76 77 77 78 78 78 80 81 82

1

GRI G4-1

Foreword Anne PAUGAM, Chief Executive Officer of AFD Group and Chairperson of PROPARCO 2015 was an historical year for sustainable grievance management mechanisms concerning development, marked by major events for environmental and social issues, they will AFD’s activity: the Sustainable Development be operational in 2016 both for AFD and its Goals adopted in September 2015, the subsidiary PROPARCO. financial framework adopted in Addis Ababa and, of course, COP21, in which AFD played As a donor, one of our major responsibilities is an extremely active role, highlight the extent to fight against fraud and corruption in order to which AFD is involved in the fight against to guarantee the quality of projects and the climate change in terms of financing and the proper use of the funds that are disbursed. A contribution to reflection. In addition to this professional alert mechanism will strengthen eventful international year, AFD has also been the measures already in place and give greater entrusted with a new mandate, in line with visibility to our financial security policy, which is already recognized as being the new SDG framework, We can rely on among the best practices in to finance projects for this field. governance, which is a key driver for the success of sustainable development in On the operational side, 2015 our countries of operation. Social Responsibility approach was the year of the general application of the sustainable These new challenges facing AFD give development opinion, the implementation renewed importance to our Corporate Social of the social business/entrepreneurship Responsibility (CSR) approach, which we mechanism, and the development of new adopted in 2014, and to its commitments. This approaches in countries that are in crisis and approach aims to more effectively “inform, vulnerable. The environmental and social risk measure and take action” and provides an management approach has been strengthened, ambitious and demanding framework for with greater attention being paid to the higherour action to support an integrated vision of risk projects, both during project appraisal sustainable development. and implementation, and in the context of bid invitations to select the most qualified In 2015, there were many achievements and companies for the management of construction significant progress in the different areas of sites which have strong environmental and social impacts.

AFD’s CSR.

the robustness of our Corporate

Significant progress has been achieved in increasing the transparency of AFD’s action for development and thereby in meeting the high expectations of our stakeholders. Starting in 2016, the scope of our publications for sovereign loans financed by AFD will cover all our geographical areas of operation, and the launch of the open data website will make it easier to view and access project data.

We had made the commitment to provide a more effective response to any grievances that may be expressed by people who are affected by the actions we finance. We have met this commitment. Following a period to develop the

This progress reflects our commitment to live up to our ambitions in terms of environmental and social requirements and promote sustainable development in the projects we finance.

2016 is going to be a new challenge, with additional operational resources which will increase our financing. They will also reinforce AFD’s position and actions, as well as the recognition of the role it plays in issues such as climate change, social and environmental standards, sustainable lifestyles and consumption patterns, thereby giving AFD the capacity to address the sustainable development challenges of the 21st century.

5

C O R P O R AT E

SOCIAL

RESPONSIBILITY

In-house, a lot of action was also taken in 2015. The deployment of forward-planning mechanisms for employment and skills was continued and extended to all our local officers, the election of staff representatives was applied to all the agencies, and a new “disability” agreement was signed, underscoring the aim of always developing more direct and indirect employment for people with disabilities. Finally, I can mention the launch of the SMILE process on professional commitment and fulfilment, which will lead us to consider how to develop our managerial practices in order to turn wellbeing at work into a collective company project.

In this respect, I want 2016 to be an important year for the development of how we live together, in a context whereby we are going to initiate the organizational reflection required to support the changes and new growth opportunities available to AFD. Together, we need to come up with appropriate responses to each other’s needs in an improved working environment.

To achieve this, we can rely on the mobilization of everyone and the collective work which have been illustrated in the context of the AFD 2025 reflection – fruitful reflection which serves to give us insight into the current challenges and the research on the strategic framework, which will continue throughout 2016.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

6

At a time which marks a new strategic step for AFD, we can rely on the robustness of our Corporate Social Responsibility approach, which was recognized in 2015 by two external ratings, to support the changes in AFD, while preserving its values and its identity. 2016 will be an important moment in identifying potential areas for moving our Corporate Social Responsibility approach forward and giving it a new ambition, in a context where, from now on, both public and private actors are making commitments and progress.

2

GRI G4-3 G4-4 G4-5 G4-6

About us

G4-7 G4-8 G4-9 G4-13

A

gence Française de Développement (AFD) is a public development finance institution that has been implementing France’s development assistance policy for over 75 years. It is a public industrial and commercial institution with the status of specialized financial institution.

Its action fits in with the Orientation and Programming Law on Development and International Solidarity Policy (LOPDSI) of 7 July 2014. These orientations are set out in the 3-year Contracts of Objectives and Means between the Government and AFD. AFD Group has a subsidiary, PROPARCO, which has a mandate to support the private sector and make equity investments in the capital of real estate companies, and a credit institution in the French overseas territories, where the Group has a specific role.

AFD also manages the French Facility for Global Environment (FFEM), which cofinances projects reconciling environment and development.

AFD finances and supports development projects and programs (public and private) in over 90 Southern countries and in the French overseas territories. To carry out its mandate, AFD Group has over 2,000 officers1 based in Paris and Marseille and in a network of 75 agencies.

Including officers working for the Instituts d’Emission (France’s note-issuing banks for the overseas territories) in Paris and in the French overseas territories

1

7

C O R P O R AT E

SOCIAL

RESPONSIBILITY

2.1

GRI G4-9

Our Mandate

IN OVERSEAS FRANCE

Financial tools mobilized (in EUR M)

547

Guarantees and equity investments SME financing (Bpifrance)

945

Loans

77

65 153

IN FOREIGN COUNTRIES

210

Support for NGOs Delegations of funds from other donors Project grants

307

Guarantees and equity investments

684

Other grants*

2,133

Non-sovereign loans

3,194

Sovereign loans

*Debt-Reduction-Development Contracts

To face the challenges of a world where there has been a sharp increase in inequalities, despite the decline in extreme poverty, and in a world where there are greater interdependencies, AFD’s role is to promote new growth and development models, which are more resilient, with lower emissions, and better able to meet the economic and social aspirations of the people on this planet. AFD’s action is fully in line with the Sustainable Development Goals and aims to:

This approach to development promoted by AFD Group is combined with the need to work in partnership with all development actors and take into account the diversity and specificity of the needs and expectations of countries and actors. In this context, AFD also participates in the definition of public policies to define development trajectories, contribute to international debates, sharing know-how and expertise, and to the dialogue with the relevant actors.

• Turn economic development into social progress for all by improving living conditions in the poorest regions or countries;

PROPARCO, AFD Group’s subsidiary, contributes to this mandate by promoting private investments in Southern countries, considering that the private sector is an effective driver for achieving economic and social objectives.

• Mainstream the environment into growth models; • Develop territories harmoniously.

PROPARCO’s objective, in line with its strategy plan for 2014-2019, is to support private actors in achieving low-carbon and environmentallyfriendly growth that benefits the majority through job creation, access to essential goods and services (health, education, housing) and the dissemination of good environmental and social practices.

Beneficiaries Over EUR 8bn of financing committed (AFD Group)

States

Companies

Local authorities

NGOs

FOCUS Focus: Governance, a new mandate for AFD The extension of AFD’s competences to “governance” on 1 January 2016 will strengthen its action, allowing it to take action within the entire scope of the Sustainable Development Goals. It will also make the policies and programs it finances more sustainable. The scope of this governance covers the following thematic areas: public finance management, public sector reform, decentralization and territorial governance, justice and human rights, land governance, the fight against corruption, the management of the economy and market regulation. Starting in 2016, AFD is projecting a volume of activity of EUR 150m in this field.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

8

2.2

GRI G4-12

Our stakeholders

G4-24

Mapping of AFD Mapping ofGroup AFDstakeholders Group stakeholders

Supervisory authorities

EXTERNAL

Development banks and bilateral and multilateral funds, incl. FFEM

Parliament

Control authority

IN-HOUSE

Public authorities

AFD staff

Civil societies Associations, NGOs, foundations, local authorities, academic institutions

Social partners (trade union delegates, elected officials or representatives of the different bodies)

French citizens

Partners

State: 100% shareholder

Beneficiary communities

States, public services

Employees at headquarters and in the network

Beneficiaries of financing

Local authorities Public and private companies

Suppliers/ subcontractors

Board of Directors and committees

NGOs, associations, foundations

AFD’s sphere of influence

Actors in social dialogue

2.3

GRI G4-56

Our values

G4-57

Through its public mandate, which it mainly carries out at international level, the origin of the resources used to finance projects and its commitment to development, AFD and all its staff members are required to constantly be up to the task in their daily actions. AFD Group has a Professional Ethics Charter for this purpose, which defines the references for the values and conduct that guide its action and that of its employees.

1/ AFD Group and its employees recognize

commitment, integrity, openness and adaptability as core values.

2/ The commitment to development, both

personal and collective, is implemented in a spirit of responsibility.

3/ Integrity implies probity, intellectual honesty

and respect for the Group’s property.

4/ Openness, for the Group and each individual, is

expressed by being responsive to, welcoming and respecting persons, stakeholders and cultures in their diversity.

5/ Adaptability, in order to effectively meet

changing needs, as far as possible implies innovation and reactiveness, as well as geographical and operational mobility.

9

C O R P O R AT E

SOCIAL

RESPONSIBILITY

2.4

GRI G4-6

An international presence

G4-8

Asia AFD has a network of 75 agencies and representation offices around the world.

Afghanistan

India

Sri Lanka

Bangladesh

Indonesia

Thailande

Burma

Lao PDR

Uzbekistan

Cambodia

Pakistan

Vietnam

China

Philippines

Kabul

Mediterranean and Middle East

Dhaka

Algeria Algiers

Egypt Cairo

Jordan Amman

Lebanon

Morocco Rabat

Tunisia Tunis

Casablanca (PROPARCO)

Turkey

Palestinian Territories

Yemen

East Jerusalem

Rangoon

Istanbul

Sana’a (temporaly closure)

Beirut

Phnom Penh European institutions Brussels

Beijing

New Delhi

Colombo

Jakarta

Vientiane

Islamabad

Bangkok

Tashkent

Hanoï Hô Chi Minh-Ville

Manila

Agencies or representation offices Beneficiary country

Latin America and Caribbean Bolivia La Paz

Brazil

Dominican Republic

Santo Domingo

Brasilia São Paulo (PROPARCO)

Ecuador

Colombia

Port-au-Prince

Quito

Haiti

Mexico City

Peru

Lima (office)

Suriname Paramaribo

Bogota

French Overseas Territories French Guiana Cayenne

French Polynesia Papeete

Guadeloupe Pointe-à-Pitre

New Caledonia Nouméa

Reunion Saint-Denis

Saint-Pierreet-Miquelon

Martinique

Saint-Pierre (IEDOM)

Mayotte

Mata-Utu

Fort-de-France Mamoudzou

Sub-Saharan Africa

Mexico

Wallis-et-Futuna

Benin

Côte d’Ivoire

Mauritius

Burkina Faso

Djibouti

Mozambique

Burundi

Ethiopia

Niger

Cameroon

Gabon

Nigeria

Cotonou Ouagadougou Bujumbura

Yaoundé Douala (PROPARCO)

Central African Republic Bangui

Chad

N’Djaména

Comoros Moroni

Congo (Democratic Rep. of) Kinshasa

Congo

Brazzaville

Abidjan

Djibouti

Addis-Abeba Libreville

Ghana Accra

Port Louis Maputo

Niamey

Abuja Lagos (PROPARCO)

Senegal

Guinea

Dakar

Kenya

Johannesburg

Conakry Nairobi

South Africa Tanzania

Madagascar

Dar es Salaam

Mali

Lomé

Mauritania

Kampala

Antananarivo Bamako

Togo Uganda

Nouakchott

The contact details of the different agencies and representation offices, as well as their activities in the field, are available at www.afd.fr Activities in countries with no AFD representation are followed by the agency of a neighboring country or directly from headquarters.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

10

2.5

GRI G4-EC8

Our activity

G4-FS6 G4-FS7

Sectors financed in 2015 (Scope: Group)

696

Environment and natural resources

775

397 Agriculture and food security

Water and sanitation

1,592

Infrastructure and urban development

863

FINANCIAL SECTORS

Education and health

in EUR M

447

1,678

Other (budget support…)

Energy

1,862

Productive sector

(microfinance, support for SMEs, banking sector)

FOCUS Focus: Madagascar – launch of the country’s first sandwich course training2 AFD is financing the creation of an IT school, “ESTI”, 3 which will offer the first sandwich course training in Madagascar.

The amount of AFD’s financing stands at EUR 2m and will serve to refurbish buildings, purchase high-tech training materials, develop programs, train teachers and start up the school.

A EUR 500,000 grant will be allocated to conduct a study on the opportunity and feasibility of setting up a fund to finance vocational training.

A large number of partners are working on this project, including the Paris-Ile de France Chamber of Commerce and Industry (CCI), which will make its expertise and network available. A Master’s Degree in Integration and Development and in Networks and Systems will be created, under a joint qualification scheme with ITESCIA, one of CCI’s schools.

2 3

http://www.afd.fr/home/pays/afrique/geo-afr/madagascar?actuCtnId=133890 Ecole Supérieure des Technologies de l’Information.

11

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Financing by geographical area Scope: Group

FIND OUT MORE www.afd.fr/lang/ en/home

Consult the report on data for AFD’s activity: http://www.afd.fr/home/publications/Publicationsinstitutionnelles/analyse-evolution-activite

EUR 38m

*

of grants (209 program, excluding grants to NGOs) were allocated to the health, social protection and nutrition sector

The social sectors – education and health – accounted for

34%

AFD Group financing approvals (EUR M)

Overseas France

NonLatin geographical America and and one-off Caribbean projects

Asia and Pacific

Mediterranean and Middle East

SubSaharan Africa

2013 2014 2015

1,506 1,548 1,570

81 72 38

1,209 1,229 1,397

838 1,059 1,190

3,002 2,945 3,123

AFD Group Disbursements (EUR M)

Overseas France4

Nongeographical and one-off projects

Latin America and Caribbean

Asia and Pacific

Mediterranean and Middle East

SubSaharan Africa

2013 2014 2015

608 692 1,002

10 42 62

809 927 1,313

430 615 633

840 824 639

1,484 2,023 1,879

1,193 1,226 998

Priority Poor Countries

Focus: Food Security

In 2015, AFD Group’s financing approvals in Priority Poor Countries[1] (PPCs) reached EUR 760m (-17%), i.e. 11% of activity in foreign countries. Grant activity (grants, Global Budget Support – GBS, Debt Reduction-Development Contracts – C2D, excluding delegated funds) stood at EUR 202m, i.e. 28% of AFD’s financing to PPCs in 2015.

Commitments for family farms, agricultural sectors, sustainable development in rural areas and food security in Sub-Saharan Africa stood at EUR 279m6 for AFD, i.e. 11% of commitments in this region.

(Scope: AFD)

AFD focused the bulk of its grant resources on supporting food security, education and vocational training, as well as on improving maternal and child health.

(Scope: Group)

In 2015, EUR 171m were earmarked for actions to support nutrition, particularly for mothers, infants and children.

of AFD’s financing approvals for priority countries in 2015

EUR 279m were earmarked for the agriculture and food security sector in Sub-Saharan Africa

Project support (including for NGOs) earmarked for maternal and child health reached

EUR 43.5m C O R P O R AT E

SOCIAL

RESPONSIBILITY

12

Excluding Bpifrance’s activity.

The CICID (Interministerial Committee for International Cooperation and Development) meeting of 31 July 2013 revised the list of Priority Poor Countries (PPCs) established by CICID in June 2009. The list of PPCs includes the 16 following countries: Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Conakry, Democratic Republic of Congo, Djibouti, Ghana, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal and Togo. The data given include the financing allocated to Rwanda in 2012 and 2013 (PPC from 2012 to 2013). Financing to Burundi and Djibouti has been included since 2012 (countries which became PPCs in 2012). These changes in scope do not have a significant impact on AFD’s overall activity in the PPCs over the period.

6 Including the improvement of access (tracks and rural energy), basic social services (water, health, education) and financial services (rural microfinance, agricultural credit) and support for companies (microenterprises, SMEs, industries) which process agricultural products, as well as the protection of the natural capital. * This indicator was controlled by KPMG during its Management Report audit.

4 5

FOCUS Burkina Faso – supporting food security in the east of the country7 A total of EUR 34m of financing has been allocated to the Government of Burkina Faso to finance a project to support food security in the east of the country and assist territorial authorities and local actors who create economic and productive dynamics in Burkina Faso.

Special emphasis will be placed on the management of small-scale hydro-agricultural facilities and market gardens in order to diversify the diet of the most vulnerable people.

In terms of livestock farming, the actions will involve marking out 300 km of livestock routes and developing facilities (grazing and resting areas, livestock markets, etc.), which are set out in the investment plan of the pastoral agreement grouping together the municipalities in the region and Eastern Regional Council.

The sales circuits for agricultural products will also be improved by the creation of 100 km of rural tracks to open up the area.

7

http://www.afd.fr/base-projets/consulterProjet.action?idProjet=CBF1265

13

C O R P O R AT E

SOCIAL

RESPONSIBILITY

3 An organization committed to sustainable development

A

FD Group is committed to adopting the best practices in its activities: the implementation of the principles of aid effectiveness, dialogue and work in partnership with development actors, monitoring and evaluation of the results of its development action, application of controls to prevent corruption, fraud, money laundering and terrorist financing, integration of Corporate Social Responsibility into both the projects it finances and its in-house operations are the main principles.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

14

3.1

GRI G4-DMA

Highlights

G4-34 G4-35 G4-36 G4-37

Corporate Social Responsibility approach AFD Group has adopted the new GRI G4 Guidelines for its Corporate Social Responsibility Report.

Climate Environmental and social risk management The environmental and social risk management mechanism for funded projects has been strengthened by developments in procedures and the explicit and systematic reference to the World Bank Safeguard Policies in AFD’s financing agreements.

Social dialogue All agencies in foreign countries with over six employees have appointed a “social dialogue contact person” in the context of a representation policy for local staff.

G4-38

2015

G4-39

AFD was accredited as a financial intermediary for the implementation of financing from the Green Climate Fund (GCF) in July 2015, alongside 12 other institutions, including the World Bank and European Bank for Reconstruction and Development.

G4-40 G4-41 G4-42 G4-43 G4-44 G4-45 G4-46 G4-47 G4-48 G4-49

Diversity

G4-50

A new disability agreement has been signed for 2016-2018, underscoring the aim of always developing more direct and indirect employment for people with disabilities.

G4-51 G4-52 G4-53 G4-54

Quality of working life

Transparency A dedicated website has been online since early 2016 (opendata.afd.fr) in order to give more visibility to information about AFDfunded projects and facilitate access to it for the different stakeholders.

The SMILE (Sense Mobilization Initiative Leadership Fulfilment) approach has been launched. It aims to create an environment conducive to confidence, collective intelligence and individual fulfilment, and make well-being at work a collective company project.

Non-financial performance

Ethics The role of the Ethics Advisor has been strengthened and extended to the management of the future grievance mechanism for the environmental and social impacts of AFD-funded projects.

The performance of the Group’s Corporate Social Responsibility has been assessed by two non-financial rating agencies – Oekom and Vigeo Rating – which have both certified the soundness of AFD’s environmental and social policies and practices.

15

C O R P O R AT E

SOCIAL

RESPONSIBILITY

3.2

GRI G4-15

Norms and standards

G4-56

By becoming a member of the Global Compact in January 2004, AFD Group selected the main declarations, conventions and standards for equitable and responsible development as the reference framework for its action:

FOCUS

• The United Nations Universal Declaration of Human Rights; • The International Labour Organization’s Fundamental Conventions; • The World Bank Group standards and IFC performance standards for PROPARCO; • The three “Rio” Conventions (fight against climate change, fight against desertification and biodiversity);

• The OECD Guidelines for Multinational Enterprises; • The OECD and United Nations Conventions against corruption and the international antimoney laundering rules; • The international ISO 26000 standard; • The French law on the “New Economic Regulations” (NRE) and the Grenelle Environment Acts; • The Environment Charter included in the French Constitution; • The Paris, Accra and Busan declarations of the Global Partnership for Effective Development Co-operation.

A Roadmap to align with the Sustainable Development Goals 2015 was marked by the adoption of the Sustainable Development Goals (SDGs) by the UN Member States during the special Sustainable Development Summit held in New York on 25 September 2015.

This new sustainable development program comprises a set of 17 global objectives (SDGs) which aim to end poverty, fight against inequalities and injustice and tackle climate change by 2030. It follows on from the Millennium Development Goals (MDGs) initiated in 2000, which reached their deadline in 2015, and includes the sustainable development agenda as a follow-up to the “Rio +20” United Nations Conference on Sustainable Development of June 2012.

For AFD, the SDGs confirm the relevance of its geographical and thematic positioning. They also provide the opportunity to question its strategy, its operating methods and the way in which it reports on its activities.

The SDGs will, in particular, restore the legitimacy of important development sectors which were mentioned little, or not at all, in the MDGs, and consequently received little investment, such as infrastructure or the environment. The integration of the new goals of “governance” (SDG 16) and to “reduce inequality” (SDG 10) also poses a challenge.

In 2016, AFD will be adopting an SDG Roadmap with the aim of mainstreaming the Sustainable Development Goals, both into its operations and strategies, and of developing a common culture and operational practices in this field.

GRI G4-57

3.3

The ethics mechanism AFD Group’s Professional Ethics Charter8 sets out the main commitments in terms of compliance, Corporate Social Responsibility, and the fight against money laundering, corruption and fraud. It defines risky conduct: failure to abide by “fair practices” (in bid invitations, in terms of corruption…), conflicts of interest, harassment or discrimination in any form whatsoever, theft of the Group’s property or assets, use of inside information for personal purposes and breach of professional and banking secrecy.

This text is applicable on a daily basis to everyone working for AFD Group and with AFD status. AFD Group’s suppliers and partners are also asked to read the Charter.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

8

16

An Ethics Advisor is responsible for “ensuring the Charter is applied correctly”, with support from a dedicated body, the Professional Ethics Advisory Committee. On the basis of this Charter, the Ethics Advisor conducts information and training activities, and provides an individual listening and advice service to the staff of AFD Group structures at their request, respecting anonymity, in order to respond to concerns over understanding or applying the Charter.

The Professional Ethics Advisory Committee comprises members appointed by Senior Management, a staff representative, as well as an external personality, and can be consulted to give an opinion on all these issues.

http://www.afd.fr/webdav/shared/ELEMENTS_COMMUNS/pdf/AFD-Professional Ethics-Charter-Internet.pdf

3.4

Corporate Social Responsibility approach SCHEMA 6 ENGAGEMENTS The Group’s Corporate Social Responsibility approach is formalized by a policy, which has been defined for 2014-2016 and was adopted by the Board of Directors on 27 March 2014.

Through this policy, AFD underscores its aim of

6

making sustainable development the objective of its action via six commitments covering the field of its operations and its in-house policy.

1

Appropriation and governance of CSR

5

THE

Transparency and dialogue with stakeholders

6

CSR

2

COMMITMENTS

Management of environmental impacts

2014-2016

Sustainable development in operations

4

Socially responsible and fair staff management

Ethics and exemplarity in financial transactions

3

3.5

Coordination of the approach A team, which reports to the Strategy, Partnerships and Communication Department, coordinates the Corporate Social Responsibility approach of the entire AFD Group. It is supported in this by a network of in-house reference persons representing all Group structures responsible for implementing various actions.

In 2015, reflection was launched on the Group’s Corporate Social Responsibility issues, in the context of the adoption of the GRI G4 Guidelines.

The conclusions of this work, which gave rise to discussions during Management Committee meetings and with NGOs, led to issues deemed

to be a priority and CSR performance indicators being selected. They will gradually be included in the overall in-house reporting on the Group’s performance.

In addition, this objective of mainstreaming CSR criteria into the in-house management indicators led to three dedicated indicators being taken into account in the new incentive scheme agreement for 2015-2017: the first concerns the publication of information on financing, the second, responsible printing, and the third, compliance with invoice payment deadlines.

17

C O R P O R AT E

SOCIAL

RESPONSIBILITY

CSR STRATEGY Corporate Social Responsibility: A coordination involving the entire organization

IMPLEMENTATION

sponsabi Re l

Executive Committee

Operational implementation in Departments

CSR REFERENCE PERSONS Representing all Group entities in charge of implementing the different actions

Promotion of sustainable development and CSR in operations Operations Department (AFD) ESI – PROPARCO

TOUS IMPLIQUÉS

COORDINATION AND MANAGEMENT CSR COORDINATION TEAM

4 meetings In-house environmental responsibility and responsible procurement General Secretariat

Financial security, compliance Risk Department

oupe AFD Gr

SENIOR MANAGEMENT

BOARD OF DIRECTORS

Transparency, accountability, stakeholder dialogue Strategy, Partnerships and Communication Department

Sociétale ité

In-house Corporate Social Responsibility Human Resources Department

with CSR referents were organized in 2015, including two training meetings, one on the principles of CSR, stakeholder dialogue and the role of the national contact point, the other on non-financial reporting and the main principles of the Global Reporting Initiative (GRI)

3.6

Governance of sustainable development

3 presentations specifically focusing on the Corporate Social Responsibility approach were made at the meetings of each of these management bodies.

AFD Group is committed to translating sustainable development issues into its governance. AFD Group’s Board of Directors, Senior Management and Executive Committee ensure the strategic integration of Corporate Social Responsibility and sustainable development, and create the conditions for it to be taken on board by everyone in the organization. In 2015, three presentations specifically focusing on the Corporate Social Responsibility approach were made during the meetings of each of these management bodies.

Teams are responsible for providing crosscutting support for the implementation of operations on the issues of climate, gender, environmental and social risks, interventions in crisis and conflict affected countries, economic influence, procurement, capacity building for partners, and the sustainable development opinion. The members of these teams – ten people at AFD and five people at PROPARCO – are responsible for providing support to operational teams and counterparts on managing the environmental and social risk of operations.

FOCUS Sustainable development, central to the discussions of the Board of Directors In 2015, the Board of Directors addressed the issues of Corporate Social Responsibility and sustainable development on several occasions: progress with the CSR approach, but also the initiative to support social enterprises, the method for recording and evaluating the impacts of climate projects, the 2014 results of the “Sustainable Development Analysis and Opinion” as well as the “Health and Social Protection” sectoral intervention framework.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

18

3.7

Training

121 Group officers attended the face-to-face training course on the risk of money laundering and terrorist financing.

Regular training sessions are held on Corporate Social Responsibility, as well as awarenessraising events. The objective is to disseminate a common culture in this field and strengthen technical skills in Corporate Social Responsibility.

In 2015: • 121 Group officers9 attended the face-toface training course on the risk of money laundering and terrorist financing. 80 Group officers have also followed the e-learning module since the launch of the second version of the application in November 2013;

• 67 officers were sensitized to issues related to sustainable development, Corporate Social Responsibility and ethics during the integration seminar for new recruits at AFD and PROPARCO; • 33 officers were sensitized to the E&S risk management approach; • 165 officers, i.e. 12% of the headcount, were sensitized to disability and 65 were specifically trained in stress and psychosocial risk management. Over a 3-year period (2013-2015), 750 staff members, including 80 managers, have attended the disability sensitization sessions.

FOCUS Training on the trends in responsible finance and non-financial ratings On 27 November, the CSR team organized a half-day training session led by Institut RSE, in partnership with the Novethic agency. The aim was to take a closer look at approaches to non-financial analysis and, more generally, issues related to socially responsible investment.

With some twenty participants (headquarters, agencies, PROPARCO), it provided the opportunity to present and discuss the latest trends in terms of CSR and sustainable development, the range of responsible finance, and the lessons-learned from non-financial ratings.

3.8

Evaluations of the approach AFD’s Corporate Social Responsibility may be subject to independent in-house evaluations via missions conducted by the Internal Audit Department or its Ex Post Evaluation Division, and externally.

During its audit missions in the network, the Internal Audit Department ensures that both local regulations on social and fiscal management and the Ethics Charter are complied with. For the projects, it verifies that the environmental and social dimensions have been addressed in accordance with the procedures in force.

9

An external evaluation of AFD’s environmental and social risk management approach is currently being conducted. The aim is to make a qualitative analysis of the quality and content of the Environmental and Social Management Plans (ESMPs) established by contracting authorities for the higher-risk projects, and of the monitoring of their implementation.

An independent evaluation of the Corporate Social Responsibility approach and its achievements will be launched in the course of 2016 with the aim of defining the next action plan.

This indicator was controlled by KPMG during its Management Report audit.

19

C O R P O R AT E

SOCIAL

RESPONSIBILITY

3.9

Transparency in Corporate Social Responsibility

FIND OUT MORE www.afd.fr/lang/ en/home

10 AFD’s Global Compact Profile: https://www. unglobalcompact.org/what-is-gc/participants/293#cop 11 Index of AFD’s GRI content: https://www. globalreporting.org/.../G3-1-Index-and-Checklist.xls 12 The methodologies for conducting non-financial reporting and GRI grid are available on AFD’s website: http://www.afd.fr/home/carriere/L-AFD-s-engage_1/ responsabilite-sociale-environnementale-afd_1/expertsrso_1 13

http://opendata.afd.fr/page/accueil/

To report on its Corporate Social Responsibility approach, AFD Group’s non-financial communication is in line with national and international reference standards.

In its Registration Document, it complies with the decree relating to the transparency obligations of companies for social and environmental issues, which it is subject to as an issuer of bonds. In 2015, an independent auditor (KPMG) issued a moderate assurance, attesting to the fact that “all the significant aspects of the information on Corporate Social Responsibility, taken as a whole, are presented in a sincere manner”.

Furthermore, in addition to the Communication on Progress at the Global Compact10 published since 2007, AFD has been publishing an annual Corporate Social Responsibility Report since 2012, within the framework of the Global Reporting Initiative (GRI).11

This report for 2015 has been prepared in accordance with the “GRI G4 Guidelines, ‘in accordance’, Core option”, and concerns the responsibility issues deemed relevant (or material). This relevance has been determined on the basis of a materiality analysis, i.e. a methodical assessment of the organization’s specific activities and objectives, as well as of external stakeholders’expectations.12 Non-financial information by project is available on AFD’s website, as well as on an Open Data website. 13 The level of environmental and social risk for sovereign loans may be given in the project database published on AFD’s website. In addition, AFD can, upon written request for specific information, disseminate the environmental and social study concerning the funded operation, where appropriate.

FOCUS AFD’s CSR performance evaluated by its investors In 2015, the Group’s Corporate Social Responsibility performance was evaluated by two non-financial rating agencies – Oekom and Vigeo Rating.

While AFD Group assesses the capacity of its counterparties to implement environmental, social and governance (ESG) policies, as a borrower on the financial market, it is itself subject to evaluations by nonfinancial rating agencies. These non-financial ratings are based on the institution’s economic performance, its conduct towards the environment, its respect of social values and its governance policy.

With this new rating, the Oekom Agency, which has been regularly analyzing AFD Group’s performance since 2010, has confirmed that AFD meets the specific requirements of development banks by issuing it with the “Prime” status and level C +. This positions it in the upper range of the panel, after EBRD (B-), and at the same level as EIB (C+).

Vigeo Rating, for its part, rated AFD’s non-financial performance for the first time in 2014. AFD was once again evaluated in 2015 in the context of a more restrictive panel, more suited to its activity, comprising 13 “banks and agencies with a specific purpose”. According to this new evaluation by Vigeo, AFD has made a significant improvement, from the “robust” level to the “advanced” level (69/100), making it the first in the panel, ahead of KfW, Caisse des Dépôts and BPI. While these two ratings give AFD a satisfactory result for its ESG practices, they also target points for which progress can be made for the next Corporate Social Responsibility policy. These include strengthening the exclusion list, mainstreaming and formalizing standards – environmental and social and relating to corruption – into sectoral strategies, and taking greater account of environmental, social and governance (ESG) issues in financing agreements.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

20

4 An atypical governance model

A

FD, a public financial institution, has an atypical structure in the landscape of financial institutions, both in terms of its “open� organization and its non-profit financial model. It focuses on the beneficiaries of its financing and provides solutions tailored to the specific contexts of its operations and concessional financing, taking debts risks into account.

21

C O R P O R AT E

SOCIAL

RESPONSIBILITY

4.1

GRI G4-DMA

Appropriate means and financial instruments 4.1.1 Solutions tailored to the specific contexts of operations in the field While the challenges are common, solutions in the field need to be tailored to the specificities and level of development of each territory. It is for this reason that the financial tools used by AFD and its sectors of activity vary depending on the region.

In Sub-Saharan Africa, a priority area for operations where there are the most crucial development challenges, AFD operates in all sectors of activity and uses its full range of financial instruments, whereas in the Mediterranean region, loans are mainly used

C O R P O R AT E

SOCIAL

RESPONSIBILITY

22

and upgrading the productive fabric, job creation and territorial development are the priorities.

In fragile, crisis and post-crisis countries, flexible instruments, mainly grants, are mobilized.

Finally, in middle-income and rapidly growing countries in Asia, Latin America and the Caribbean, the promotion of green and inclusive growth is the guiding principle for AFD’s activity.

No funds from the French State are used to finance the major emerging countries, except in the context of technical expertise.

Contributing to sustainable operations that have a strong impact for development involves listening to leaders and contracting authorities, and being attentive to their needs and concerns, in order to define and propose appropriate means and financial instruments.

This requires a dialogue and a negotiation which are structured through the various stages of the project cycle.

AFD’s project cycle Beneficiaries of financing States, companies, local authorities, NGOs

Agence Française de Développement contributes to financing projects

1 – Project idea Submitted to AFD for financing

2 – Analysis of proposals Especially of the project’s objectives and conformity with AFD’s priorities for operations in the country in question 4 – Analysis of feasibility studies and financing requests Analysis of the economic, social and environment effects of projects, their compliance with France’s aid policy, the financing plans, corruption, environmental, social, economic risks…

3 – Feasibility study Generally entrusted to external consulting firms

5 – Negotiation on the financing terms 6 – Financing requests sent to AFD Agreement on project content and financing terms

7 – AFD makes decision on the financing

8 – Signing of loan or grant agreements 9 – Physical implementation of projects 9 – Disbursements of financing Selection of companies in accordance with local law and in compliance with AFD’s Control of compliance with the clauses set out in the agreement. Vigilance over the risks of money laundering, terrorist financing and corruption. Technical and financial procurement principles (competitive bidding in particular) monitoring of the project.

10 – Repayment to AFD in the case of loans

Ex post evaluation of the project Evaluation of the achievements, their viability and their economic, social and environmental impact. 30 project evaluations

4.1.2 Measure, prevent and limit debt risks Due to the very nature of AFD’s role as a development agency, and in particular the subsidiary and/or incentive nature of the institution’s operations, the acceptable level of credit risk for AFD’s operations may sometimes be higher than with traditional banking institutions. Indeed, AFD needs to be able to operate: in difficult geographical areas, with risky counterparties, with long-term maturities.

Debt Reduction-Development Contracts

EUR 641m

AFD uses a risk analysis to take into account the debt risks of the countries where it operates (macroeconomic risks, country risks, credit risks of counterparties…), which allows it to assess the opportunity of lending. A Risk Committee meets at least twice a year to analyze the macroeconomic risks of the country of operation, as well as the credit risks of counterparties, and make recommendations to Senior Management in this respect.

In terms of loans to States, AFD fits in with a series of international debt reduction initiatives: Paris Club, IMF Heavily Indebted Poor Countries Initiative, Debt Sustainability Framework…

The DSF is a coordination tool between donors which makes it possible to stop lending to a country whose debt exceeds the sustainability thresholds. In this context, AFD only lends in cases where there is a low risk and continues to lend for a year in cases where a country goes from a low risk to a moderate risk. AFD does not lend when there is a high risk.

14

Consequently, AFD uses various international standards to determine its capacities to operate via sovereign loans in LDCs, the Lagarde doctrine and Debt Sustainability Framework (DSF) in particular.14

For credit risk exposure to its non-sovereign clients, AFD seeks to obtain adequate coverage via guarantees (personal or similar and real).

These guarantees are subject to a periodic inhouse valuation which, depending on the case of the type of guarantee, takes into account the quality of the guarantor and the geographical area of operation.

The debt restructuring for developing countries conducted by France is one of the solutions provided to address the payment difficulties experienced by indebted countries. This restructuring is part of the framework of the Paris Club for which France, represented by the General Directorate of the Treasury, is the Chair and provides the General Secretariat. The Paris Club, in association with international financial institutions, including AFD, comes up with coordinated and permanent solutions to the payment difficulties of indebted countries via debt relief. This debt relief may be obtained through rescheduling or, in the case of concessional treatment, a reduction of debt service obligations for a defined period (flow treatments) or at a fixed date (stock treatments).

For countries which come under the Heavily Indebted Poor Countries (HIPC) Initiative, the French Government has set up a progressive and specific mechanism to write off the balance of public liabilities that it continued to hold over these States after the intervention of the Paris Club. This mechanism, for which AFD is the operator, provides for the beneficiary country to sign a Debt Reduction-Development Contract (C2D) with France, at the end of which the repayments it makes for the loans in question are paid back to it to finance poverty reduction programs. It is consequently a mechanism which transforms loans into grants.

23

C O R P O R AT E

SOCIAL

RESPONSIBILITY

4.2

GRI G4-EC1

“Non-profit” financial model

G4-DMA

Grants – Foreign countries

EUR 293m Project grants

EUR 210m Bond issues

AFD’s “non-profit” financial model aims to cover its operational banking and non-banking charges and the charges from the cost of risk of its activity.

The interest rate of the credit products is consequently made up of the cost of the financial resource, plus a margin covering the overhead costs as well as the estimated cost of risk and, where appropriate, less an interest subsidy, the level of which varies depending on the nature of the borrower and the State of which it is a national.

in 2015

In all cases, the borrower benefits from soft conditions (for both the rate and maturity) to which AFD has access on financial markets thanks to the quality of its signature.

State resources:

Since 2004, and pursuant to the amended Article 79 of the Amending Finance Law n° 2001-1276 of 28 December 2001, the State may receive a dividend

EUR 5.1bn EUR 1.2bn in 2015

AFD finances itself on financial markets, in the form of public bond issues. In 2015, it borrowed EUR 5.1bn. The good rating of its issues in turn allows it to allocate soft loans to its beneficiaries.

AFD is also mandated by the State to finance, through grants, projects or programs that benefit the poorest States. The cost of appraising and managing this financing is covered by budgetary resources.

FIND OUT MORE www.afd.fr/lang/ en/home

The balance sheets, main ratios and indicators and income statements of AFD and PROPARCO are given in AFD’s Registration Document. http://www.afd.fr/lang/en/home/publications/ Publications-institutionnelles/documents-reference

C O R P O R AT E

SOCIAL

RESPONSIBILITY

24

The contribution made by the Ministry of Foreign Affairs and International Development allows AFD to finance projects in the form of grants and support NGO initiatives. The financing from the Ministry of Finance and Public Accounts is used for certain operations (budget support, etc.), as well as to subsidize loans, i.e. bear the cost of part of the interest rate on loans and, therefore, reduce its cost for the beneficiaries.

AFD consequently turns EUR 1 of public money into EUR 11.5 of loans. Finally, certain projects in the French overseas territories are supported

by funds allocated by the Ministry of Overseas France.

Thanks to its capacity to raise funds on financial markets on the best terms and devise innovative cofinancing, AFD allows its beneficiaries to benefit from a leverage effect, i.e. an economic return on their investments higher than the cost of their debt.

Its equity capital is invested in order to generate stable products which finance the non-banking activities conducted by AFD as a public institution, with the agreement of the State: knowledge production, financing of studies, support and advice to French public authorities.

PROPARCO, AFD’s subsidiary, contributes to financing the private sector in Southern countries, by offering loans, equity investments and guarantees in foreign currency and in local currency. Its position is to supplement the range of commercial banks and it aims to provide a response to the weaknesses of local markets, particularly for the range of long-term financial resources.

At 31 December 2015, PROPARCO’s share capital stood at EUR 693m. AFD is the majority shareholder with 64%. The remainder is held by private shareholders (French financial institutions, international financial institutions, investors, ethical funds and foundations).

4.3

GRI G4-16

Specific governance

G4-34 G4-35 G4-36

AFD Group’s governance is based on a group of structures which guarantee the transparency of its operations and its sound management. This governance is regulated by a body of legislative texts (banking law, decrees defining AFD’s statutes, conclusions of the Interministerial Committee for International Cooperation and Development (CICID), in-house regulations and procedures).

The Board of Directors and its specialized committees met

33 times

4.3.1 Board of Directors

in 2015 Operation of the Board of Directors

The Board of Directors comprises

18 members It comprises

5 women in 2015, which includes the Chairperson of the Board

Pursuant to Article R. 513-35 of the Monetary and Financial Code, the Board of Directors deliberates on the institution’s strategic orientations, approves the Contract of Objectives and Means and the agreements on operations managed on behalf of the State; AFD’s financial support on its own behalf, on behalf of the State or other third parties and management mandates; the annual amount of borrowing to be contracted

by AFD; an estimate of income and operating costs; the general conditions of financing; the annual accounts and management report; the acquisitions and sale of real estate; the creations or closures of agencies or representations; AFD’s interest transactions and arbitration clauses; the appointment of auditors. The Board of Directors is informed of the quality evaluations, analyses and assessments concerning AFD and its operations.

The Board of Directors may delegate part of its powers, to the extent that it determines, to three specialized committees (for operations in the French overseas territories, for operations abroad, for support to the initiatives of nongovernmental organizations).

The operation of the Board of Directors is formalized in rules of procedure, pursuant to Article R. 513-36 II of the Monetary and Financial Code. The Board of Directors and its specialized committees met 33 times in 2015.

Composition of the Board of Directors and appointment system Pursuant to Article R. 513-34 of the Monetary and Financial Code, in addition to its Chairperson, the Board of Directors comprises: six members representing the State, four members appointed due to their knowledge of economic and financial issues, one member appointed due to their knowledge of ecology and sustainable development, four parliamentarians (two MPs and two senators), two elected members representing AFD’s staff. The Chairperson of the Board of Directors is appointed by a decree based on a report by the Minister of the Economy, Minister of Development, the Minister of Overseas France and the Minister of Immigration. Members of the Board of Directors have a three-year mandate.

Full details concerning the names, functions and other mandates and functions of the members of the management and Board of Directors are given in AFD Group’s 2015 Registration Document and on AFD’s website: afd.fr.

It comprises 18 members, with 5 women in 2015, which includes the Chairperson of the Board.

Remuneration of the members of the Board of Directors The mandate of the members of the Board of Directors is not remunerated. However, the Chairperson of the Board of Directors receives a function allowance, the amount of which is fixed by joint decision of the Ministers of the Economy, Foreign Affairs and Overseas France.

Conflicts of interest Independence in the exercise of the functions as a Board member is required by the “Charter for AFD Board and Committee Members”. It contains provisions to address any potential conflicts of interest. Furthermore, the Chairperson of the Board of Directors and Chief Executive Officer of AFD, respectively, declare their interests and assets to the Commission on the Financial Transparency of Public Life. In 2015, no conflicts of interest were identified between the duties, with respect to AFD, of the members of the Board of Directors and their private interests and/or other duties.

25

C O R P O R AT E

SOCIAL

RESPONSIBILITY

G4-37 G4-38 G4-39 G4-40 G4-41 G4-42 G4-43 G4-44 G4-45 G4-46 G4-47 G4-48 G4-49 G4-50 G4-51 G4-52 G4-53 G4-54 G4-55

4.3.2 Senior Management The management and administration of AFD are entrusted to a Chief Executive Officer appointed for three years by decree. The Chief Executive Officer represents and commits the AFD by exercising the powers delegated to her by the Board of Directors.

She relies on a Management Committee for this purpose, which comprises directors from AFD Group’s different departments and divisions.

This committee comprises thirty-eight people and included fourteen women in 2015.

The remunerations of the Chief Executive Officer and Deputy Chief Executive Officer are given in AFD Group’s 2015 Registration Document. It should be noted that there are no fringe benefits or specific pension scheme, stock options or variable remuneration for AFD’s corporate officers.

4.3.3 Control bodies AFD Group has several committees to manage the Group’s risks.

The Audit Committee, which is appointed by the Board of Directors, is composed of three to five members qualified in terms of financial analysis and risk assessment, at least one of which is selected from the Board of Directors.

The Audit Committee gives an opinion to the Board of Directors, whenever required and at least once a year, on the financial statements and the effectiveness of internal audit and risk management. The Group’s Audit Committee is responsible for verifying the clarity of the information provided and assessing the relevance of the accounting methods, assessing the quality of internal audit, and giving opinions on the reports prepared pursuant to the decree of 3 November 2014 on the internal audit of companies in the banking sector.

FIND OUT MORE www.afd.fr/lang/ en/home

A Government commissioner, appointed by the Minister of the Economy, ensures that AFD respects its public mandate. In this context, he can veto the decisions of the Board of Directors and its different specialized committees.

AFD’s accounts are audited by two auditors appointed by the Board of Directors.

Find out more about PROPARCO’s governance: http://www.proparco.fr/lang/en/Accueil_PROPARCO/ PROPARCO/Proparco_gouvernance/conseil-dadministration-et-comites

C O R P O R AT E

SOCIAL

RESPONSIBILITY

26

Internal audit is the entire mechanism which allows Senior Management to ensure that the operations conducted, the organization and procedures put in place comply with legal and regulatory provisions, professional and ethical

practices and the internal rules and orientations defined by the institution’s executive body.

The internal audit aims to: exercise sufficient control over the risks incurred to ensure they are effectively managed; guarantee the reality, completeness and accuracy of financial and management information; verify the integrity and availability of information and communication systems.

AFD Group organizes the management of its risks based on the principle that the departments tasked with risk assessments must be independent from the operational departments.

The Group’s permanent control mechanism firstly ensures the consistency, effectiveness and completeness of and compliance with the mechanisms put in place to guarantee, at operational level, the conformity, security and validity of the operations conducted by the Group and, secondly, carries out due diligence related to the monitoring of all types of risk: credit, market, overall interest rate, liquidity, settlement/delivery risks, operational risks, as well as strategic and reputation risks (which includes environmental and social risks). The process to measure and monitor risks is based on the exercise of updating risk mapping and on a mechanism to collect actual or potential incidents. This mechanism allows remedial and preventive actions to be defined and their implementation to be monitored, with the aim of avoiding any recurrence of incidents. The most significant information is communicated to the various levels of the organization based on an escalation process.

The periodic control function addresses the conformity of operations, the level of risk actually incurred, compliance with procedures, and the effectiveness and appropriateness of the permanent control mechanisms put in place by AFD. It is handled by the Internal Audit Department, which is positioned at the level of Senior Management.

4.3.4 PROPARCO’s governance As a credit institution, PROPARCO is subject to the provisions of the Monetary and Financial Code. Its governance bodies guarantee the transparency of its operations and its sound management. They rely on the expertise of their members from the public and private sectors.

PROPARCO’s Board of Directors is chaired by the Chief Executive Officer of AFD Group and is composed of 16 Directors and 6 Non-Voting Directors. It meets four times a year. Its role is primarily to determine PROPARCO’s strategic orientations and ensure they are implemented.

It is also tasked with approving the pricing policy

for loans and guarantees, the business plan and strategic investment projects, as well as any operation likely to have a significant impact on PROPARCO’s results, balance sheet or risk profile. Through the expertise of its members, who come from international development finance institutions, the banking sector, the industrial sector and ethical funds, the Board of Directors consequently plays a crucial role in PROPARCO’s performance and development.

4.3.5 Interministerial Committee for International Cooperation and Development and Strategic Orientation Committee Agence Française de Développement is bound to the State under 3-year Contracts of Objectives and Means and implements the orientations defined by the Interministerial Committee for International Cooperation and Development (CICID).15 The CICID is chaired by the Prime Minister and is composed of the ministers directly concerned by development assistance (Foreign Affairs, Development, Finance,

Education, Research and Higher Education, Interior, Defence, Environment, Budget, Foreign Trade, Overseas France).

The CICID’s decisions have no legal or regulatory value. They are orientations given by the Prime Minister to the relevant administrations, which subsequently implement them.

The implementation of the CICID’s decisions and evolution in the development assistance policy are supervised by the CICID Co-Secretariat. The meetings of the CICID Co-Secretariat are chaired alternately by the Minister of Foreign Affairs and International Development and Minister of the Economy, Industry and Finance. Agence Française de Développement (AFD) attends these meetings at the invitation of the Chair.

The mandate of the Strategic Orientation Committee (COS), a State body created in 2009 and chaired by the Minister of Development, is to strengthen the coordination between the policy orientations related to Official Development Assistance decided by the CICID and their operational implementation by AFD. In this respect, the COS coordinates the preparation of the Contract of Objectives and Means signed between AFD and the State and monitors its implementation.

The 1998 decree for the creation of the CICID is available at: http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000000753609&categorieLien=cid

15

27

C O R P O R AT E

SOCIAL

RESPONSIBILITY

5 Report, inform, dialogue

T

he objective of conducting sustainable operations with strong impacts for development requires submitting the results of action to the judgment and recognition of stakeholders, including the State, staff members, the beneficiaries of financing, NGOs, suppliers, but also peer organizations, local communities and residents, national and international public authorities, as well as the financial and banking world. In this context, one of the pillars of the Group’s Corporate Social Responsibility commitments is to “Report, inform, dialogue”.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

28

5.1

GRI G4-26

Accessible, clear and transparent information In order to build a relationship of trust and high-quality dialogue with its stakeholders, AFD Group is committed to enhancing transparency over its activities. AFD has a proactive approach to publishing information.

It fits in with international reference standards, within the limits of professional secrecy and business secrecy, according to the framework set by the Monetary and Financial Code and French legislation relating to the protection of personal data.

FIND OUT MORE www.afd.fr/lang/ en/home

17 18 19

http://carte.afd.fr/afd/fr

http://carte.afd.fr/proparco/fr

www.afd.fr/base-projets/listerProjets.action 20

http://opendata.afd.fr/page/accueil

21

http://iatiregistry.org/publisher/afd 22

www.data.gouv.fr

G4-27 G4-FS8

AFD’s efforts to improve the availability of information on projects are part of more comprehensive reflection on its strategy for transparency and accountability, which will lead to a proposal in 2016 for an overhauled transparency policy in response to the new issues in this field. In 2016, AFD intends to extend the scope of its transparency to nonsovereign financing, financing by PROPARCO and FFEM, as well as to decentralized ex post evaluations.

Information about projects financed by AFD16 is published on: • T he Group’s institutional websites. Two interactive maps present summaries of 707 projects (544 for AFD 17 and 163 for PROPARCO18 at the end of 2015). Over 1,400 projects are also published in a more detailed database;19 • AFD’s Open Data portal20 and the website of the International Aid Transparency Initiative (IATI).21 At the end of 2015, 43% of AFD’s activity and 76% of the sovereign activity were published on these websites. In 2015, AFD’s publication efforts improved its rating established by the NGO Publish What You Fund (PWYF) from “poor” to “fair”; • The open platform of French public data.22

FOCUS Open Data – improving the understanding and dissemination of project data and facilitating its re-use AFD is engaged in France’s National Action Plan for an Open Government and since 2014 has committed to giving priority to the transparency of its assistance.

The Afd. Opendata platform launched in early 2016 allows sectoral and/or thematic data to be viewed, covering the regions and countries where AFD operates. This tool has been designed to allow an easy reading, dissemination and re-use of data by all AFD’s stakeholders. This Open Data tool contributes to increasing the transparency of AFD’s action for development.

16 These websites at the minimum present information for each project on the identity of the client, the detailed description, the sector of activity, the project location, the provisional start-up date, the technical completion date, the progress report updated every six months, the type of financing, the credit amount, the total amount of disbursements and the communication brief and/or the presentation sheet of the operation.

29

C O R P O R AT E

SOCIAL

RESPONSIBILITY

5.2

GRI G4-24

Enhanced dialogue with stakeholders

G4-25

G4-26

G4-27

AFD Group is aware of the need to provide differentiated and concerted responses and has made dialogue with its stakeholders one of its main objectives.

Group dialogue with its stakeholders

REGULARY AND INSTITUTIONAL DIALOGUE

DIALOGUE ON OUR OPERATIONS

> Define strategic orientations > Approve AFD’s commitments and their financial arrangements > Inform on AFD’s activities and analyses > Report on the sound financial management of the institution > Report on the efficient use of public funds

> Discuss our intervention frameworks > Define appropriate means and financial instruments > Ensure that projects are effective, sustainable, and propely implemented > Respond to complaints and concerns related to the impacts of a project

Board of Directors and specialized committees

Beneficiary of financing (State, administrations, State-owned and private companies, NGOs…)

Supervisory authorities

Regulatory and control authorities Parliamentarians

TO DEFINE OUR FRAMEWORK FOR ACTION AND REPORT

FOR EFFECTIVE, SUSTAINABLE AND APPROPRIATE OPERATIONS

Population affected and civil society

DIALOGUE FOR EFFECTIVE IN-HOUSE OPERATIONS

International organizations (United Nations) and European organizations

TO SHARE AND DEVELOP PRACTICES

All staff members

Staff representatives

Private sector NGOs, associations, foundations, local authorities Development banks and international financial institutions Academic world and think tanks

IN-HOUSE DIALOGUE > Inform on developments at AFD and their social consequences > Provide responses to social and societal issues > Meet staff needs and expectations > Promote staff commitment

C O R P O R AT E

SOCIAL

RESPONSIBILITY

30

DIALOGUE WITH DEVELOPMENT ACTORS > Report on the commitment and actions and the impact of projects > Contribute to the debate and reflection on development issues > Develop, disseminate and integrate good practices to build the capacities of development actors

5.2.1 Dialogue on our operations Dialogue with the population, local authorities and civil society organizations

In 2015, AFD and PROPARCO presented their annual reports to civil society for the first time.

Ensuring that projects are effective and sustainable requires partnerships with civil society and/or consultation during the preparation, implementation and evaluation of projects.

In this respect, it makes sense to take account of the views of local authorities, affected populations and local NGOs concerning the impacts of projects that are submitted for financing, particularly when they have a high environmental and social risk. During the appraisal and implementation of its projects, AFD Group ensures – through clauses and support – that the contracting authority consults the various project stakeholders (especially local communities). Their interests and views are also included in project evaluations.

Dialogue on strategies

AFD will actively conduct reflection involving civil society organizations on how to

coordinate and define the methods for dialogue, both in the context of the preparation of strategies and the monitoring of its activity in 2016.

The strategy papers prepared by AFD, which define its areas of operation, in sectors or for crosscutting issues, are subject to consultation with the line ministries and a presentation to stakeholders prior to being submitted to the Board of Directors. In the case of Country Intervention Frameworks, a dialogue with stakeholders (local authorities, donors, private sector, NGOs, etc.) is systematically conducted prior to the drafting of the paper. These strategy papers are available on AFD’s website in the sections on its thematic areas, sectors and geographical areas of operation.

In 2015, all the crosscutting, sectoral and regional intervention frameworks under preparation were presented to stakeholders. This was the case for

PROPARCO’s strategy (January), the Regional Intervention Framework for the Mediterranean and Middle East (February), the Sectoral Intervention Framework for Health and Social Protection (June) and the Sahel Action Plan (September). The reports on these discussions are available on the website afd.fr.23 More targeted discussions are also held on the review of the Intervention Framework for Food Security and on the Sectoral Intervention Framework for Water and Sanitation.

The French Facility for Global Environment (FFEM) also involved civil society in consultation on its new strategy for 2015-2018, which was adopted in April 2015.

NGOs were invited to workshops on transparency, AFD’s Corporate Social Responsibility, and in the context of the creation of the Social Business Facility, which aims to support the emergence and development of social enterprises. AFD has also enhanced its dialogue with international NGOs on their advocacy campaigns (bilateral meetings with Oxfam, ONE, Publish What You Fund, CCFD…).

In 2015, AFD and PROPARCO presented their annual reports to civil society for the first time.

In 2016 and 2017, the Sectoral Intervention Frameworks for Education, Training/Employment, Transport, Energy, Food Security, Thematic Intervention Frameworks: Digital Technologies, Climate, Governance, Fragile Situations, as well as the Regional Intervention Frameworks for Latin America and Sub-Saharan Africa will be subject to discussions with civil society prior to their adoption.

In 2016, AFD will actively conduct reflection involving civil society organizations on how to strengthen, coordinate and more clearly define the methods for dialogue, both in the context of the preparation of strategies and the monitoring of its activity.

FIND OUT MORE www.afd.fr/lang/ en/home

23 http://www.afd.fr/lang/en/home/AFD/ redevabilite-dialogues/dialogues/Dialogueautour-de-nos-cadres-d-interventionstrategiques; http://www.afd.fr/home/publications/ Publications-institutionnelles/analyse-evolutionactivite

31

C O R P O R AT E

SOCIAL

RESPONSIBILITY

G4-DMA

FOCUS Climate and development: consultation with French NGOs NGOs are major actors in promoting projects with climate co-benefits, both for adaptation and mitigation. Their role in disseminating technological innovations is particularly recognized. NGOs are also major advocacy actors, in France and Europe, but also in countries of operation, which are the most vulnerable to climate change. French NGOs benefit from AFD financing for this purpose (34 ongoing) and from FFEM (EUR 48m of commitments for 2010-2014).

On 27 May 2015, a consultation meeting was organized at AFD between AFD’s different departments and 22 French NGOs and NGO platforms which are actively involved in the fight against climate change. The ministries concerned (MAEDI, MEDDE, Finance) also attended this meeting.

The main topics of discussion at this consultation meeting concerned: the methods for preparing and conducting projects with climate co-benefits, and the developments required by taking into account criteria related to climate change; scaling up and disseminating new technologies/practices at the level of territories and the need for coordination with territorial development policies; strategies for pooling resources and knowledge in order to increase project impacts; the impact measurement tools for climate change.

In terms of project financing, in response to the constraints identified, several possible solutions came out, such as strengthening ties with the private sector, the new economic models for sector-based projects, consortium operations to reach a critical mass, and support from French public actors to facilitate access to multilateral funds for NGOs.

Dialogue between young ambassadors from ONE and AFD On 12 October 2015, a meeting was held between AFD officers and 15 Young Ambassadors from ONE, an international campaigning and advocacy organization which fights against extreme poverty and preventable diseases in Africa.

The objective of this event was to give a better understanding of how aid operates and of AFD’s action. Following a general presentation

by AFD, there were discussions between project managers and the Young Ambassadors on practical examples in the fields of health, food security, as well as on NGO projects.

This dialogue is part of a program to train and mobilize a new generation of militants for the fight against extreme poverty.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

32

5.2.2 Regulatory and institutional dialogue AFD is held accountable to a wide range of stakeholders defined by legislation.

This accountability is applied at the Board of Directors, whose members include line ministries, parliamentarians, NGO representatives and staff representatives, but

Board of Directors and specialized committees (Audit, for example)

also with social bodies and via institutional and regulatory reporting documents (parliamentary reports, Group Registration Document, social report, economic and social database, etc.).

Objective of the dialogue

Forms of dialogue

Approve AFD’s commitments and their financial arrangements

Regular meetings and committees Definition of framework documents Delegations to specialized committees

Supervisory authorities

Regulatory and control authorities

Define the strategic orientations

Joint preparation of framework documents

Be accountable for the efficient use of public funds

Contract of Objectives and Means

Make financing sustainable

Management control/Audit

Be accountable for the sound financial management of the institution

Publication of a Registration Document

Financial Market Authority (Art. 225 Grenelle II)

Parliamentarians

Inform parliamentarians of AFD’s activities and analyses

Possible hearings

Hearings before parliamentarians: questions/answers Parliamentary reports

FOCUS Consultation for the development policy via CNDSI The Interministerial Committee for International Cooperation and Development, which met on 31 July 2013, decided to create the National Council for Development and International Solidarity (CNDSI), highlighting the importance of consultation in the framing and implementation of development policy. CNDSI creates a multi-stakeholder forum for dialogue and for ensuring the coherence of development actions. It addresses the need for openness, transparency and effectiveness that is inherent to the process of overhauling the development policy.

CNDSI is chaired by the Minister of State for Development and Francophonie and is made up of seven constituencies, representing members of parliament, local and regional government and regional multi-stakeholder networks, non-governmental international solidarity organizations, trade union organizations, employers, economic stakeholders involved in the international solidarity field, scientific research and training bodies, and an eighth constituency of qualified foreign figures. Agence Française de Développement participates in the Council’s work.

The role of the CNDSI is to “enable regular coordination between the different development and international solidarity stakeholders around the goals and guiding principles of French development policies, the coherence of public policies in the area of development and the resources for official development assistance”.

33

C O R P O R AT E

SOCIAL

RESPONSIBILITY

5.2.3 Dialogue with development actors

G4-DMA

AFD Group also gives importance to dialogue with the other development actors: donors, private sector organizations, academic institutions and think tanks.

AFD Group is in partnership with over 150 organizations: international donors, United Nations agencies, regional and local authorities, NGOs, companies, foundations and think tanks.

Objective of the dialogue

Forms of dialogue

International and European organizations

Report on the commitment to international initiatives (Millennium Development Goals, Global Compact…)

Global Compact: participation in the Steering Committee and Annual Report Financing of international initiatives

Development banks and international financial institutions

Have common tools

Sectoral cooperation, cofinancing and joint exchange programs

Private sector

Influence private sector practices

Symposiums and events PROPARCO’s Private Sector and Development magazine Investors’Club

Academic institutions and think tanks

Disseminate reflection

Publication of studies; working groups, forums

Integrate best practices

Integrate good practices

FOCUS Constructive cooperation with the European Union during European Development Year 2015 was “European Development Year” and also a year in which the partnership relationship between AFD and the European Union was strengthened.

AFD and the European Union, by working together more in the field and enhancing daily exchanges, propose an innovative European solution for development finance. In 2014, the two institutions cofinanced 128 projects together on five continents.

Mr. Fernando Frutuoso de Melo, Director-General for Development Cooperation at the European Commission welcomed “The extremely good relations that we have with AFD and our regular meetings. They allow us to have a constructive exchange of views and ensure that our operations in the field achieve the best results”.

AFD-IDB partnership – a day devoted to green finance actors On 3 November 2015, AFD, the Inter-American Development Bank (IDB) and OECD organized a one-day workshop in Paris on local financial institutions and green finance. This event gathered some sixty green finance practitioners from development institutions, multilateral agencies and local financial institutions from various regions. This day was dedicated to exchanges of experience and capitalization, and to identifying possible areas of cooperation.

Support for small and medium-sized enterprises and setting up a platform for exchanges bringing together green finance actors were among the solutions discussed on this occasion.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

34

5.3

GRI G4-EN34

Responding to grievances by stakeholders

G4-HR12 G4-DMA

In 2015, AFD and PROPARCO defined the architecture and organization of specific mechanisms 24 to manage complaints and grievances over environmental and social issues. These mechanisms will allow a third party affected by a project financed by AFD or PROPARCO to file a complaint for environmental reasons (pollution, destruction of natural resources) and/or social reasons (land grabbing, forced displacement, human rights…).

project, or ways of resolving the problems raised by these complaints. They will be dealt with either through a mediation procedure (dispute resolution), or by launching independent audits which will determine whether the project subject to complaint complies with the environmental and social procedures applicable to the projects financed by AFD or PROPARCO, and whether the planned due diligence has been conducted in a satisfactory manner.

The actual implementation of these mechanisms, which will take place in 2016, will be based on the opinions of independent experts. Their role will be to analyze the complaint/grievance and propose, where appropriate, recommendations to implement in the specific context of the

This mechanism will also strengthen reporting on the number of relevant complaints received and handled.

FOCUS

AFD Group criticized in the media In 2015 and early 2016, AFD Group was subject to two accusations made through a French newspaper and media website concerning its activities in the Central African Republic and Kenya. In the article published in the newspaper Le Monde on 15 July 2015, “Central African Republic: Has the Timber Trade Fuelled the War?”, the journalist Laurence Caramel raised questions over AFD’s support to the forestry sector in the Central African Republic. This article is partly based on the report by the NGO Global Witness, “Blood Timber”.

On 13 February 2016, on the website Mediapart, Pascale Pascariello pointed fingers at PROPARCO’s financing of a Kenyan company suspected of land grabbing in Côte d’Ivoire. This article follows on from the program Interception broadcast in 2015 on the France Inter radio station. These two subjects are based on the report “NASAN Midterm Review: Hunger Just another Business” co-signed by the NGOs Action against Hunger, CCFD-Terre Solidaire and Oxfam International.

AFD has initiated and/or intensified its dialogue with NGOs and other stakeholders on these issues.

A mediation mechanism: National Contact Points (NCPs) for the implementation of the OECD Guidelines In each country that adheres to the OECD Guidelines on responsible business conduct, a National Contact Point (NCP) is responsible for promoting these principles, disseminating them and ensuring they are respected by handling “complaints” made against companies.

The OECD Guidelines for Multinational Enterprises were adopted in 1976. They were revised in 2000 and 2011 in order to integrate environmental protection, human rights, reasonable due diligence and responsible supply chain management. Companies are required to exercise reasonable due diligence based on the risks arising from their activities. In this respect, they must, in their decision-making and risk management system, prevent, detect and remediate real or potential negative impacts in terms of human rights, the environment and working conditions. A case may be brought before the NCP by an NGO, association, trade union or an individual directly affected for alleged non-compliance with the Guidelines. The NCP, a mediation and conciliation body, after examining the admissibility of the complaint, provides its good offices to help resolve the problems raised.

In France, the NCP is an independent tripartite body coordinated and chaired by the General Directorate of the Treasury of the Ministry of the Economy and Finance.

In 2014, a complaint was brought before the French NCP which indirectly targeted AFD Group in the context of financing for a company in Cameroon. Following an assessment of the admissibility of the complaint and a meeting with AFD Group, the NCP delivered its position on 25 March 2015 via a public statement. It considers, firstly, that the submission of the case to the NCP is inadmissible and, secondly, that AFD Group has conducted adequate due diligence in line with OECD recommendations in terms of the company accused by the complainant.25 PROPARCO has defined a specific mechanism, which aims to eventually align with the mechanism developed by DEG and FMO. http://www.tresor.economie.gouv.fr/File/411305

24 25

35

C O R P O R AT E

SOCIAL

RESPONSIBILITY

5.4

Communicate on the use of Official Development Assistance AFD teams took part in

47 events

670,000 people from all over the world saw the AFD exhibition “60 Solutions to Climate Change” in 2015

FIND OUT MORE www.afd.fr/lang/ en/home

AFD actively communicates on development and international cooperation issues to allow French citizens to express their expectations, their vision and their questions in terms of the subject. To this end, AFD organizes a number of events to encourage dialogue and the sharing of ideas.

For example, AFD was actively involved in the preparation of the Paris Climate Change Conference in 2015 (COP21). AFD teams took part in 47 events, both in Le Bourget and at the Grand Palais. 670,000 people from all over the world saw the AFD exhibition “60 Solutions to Climate Change” in 2015. This exhibition highlighted concrete solutions for the fight against climate change and a low-carbon growth model, through a reference to projects financed by AFD. This exhibition also promoted the reconciliation of climate and development. Indeed, the fight against climate change is not only essential, but can also provide major benefits in terms of growth, employment and the quality of life.

COP21 also prompted several initiatives by our agencies involving civil society: in October 2015, the N’Djamena agency organized “The COP21 of Young Chadians”, the Kinshasa agency took part in the Climate March organized by environmental NGOs in the country, and a drawing competition was organized by the Mexico City agency in ten schools on the topic: “How Do I Imagine the World in 2025?”, in partnership with the Mario Molina Center.

18 conferences were organized in the series of ID4D conferences, including three in the South and three during COP21.

Find out more about the list of events that AFD contributes to: http://www.afd.fr/lang/en/ home/presse-afd/evenements

FOCUS AFD at the Paris International Agricultural Show AFD, and its partner CIRAD, carried out several joint actions in 2015: the release of a publication, the organization of the Climate Challenge competition and a stand at the 2015 Paris International Agricultural Show. There were over 9,000 visitors to the AFD/CIRAD stand, where there was an area to raise awareness of the challenges of climate change, pedagogical activities, and roundtables on the climate change issues for agriculture and forests.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

36

6

GRI G4-DMA

Ensuring and promoting sustainable development in operations

S

ustainable development is the common reference for all AFD’s operational activities. The beneficiaries of the Group’s financing are in turn vehicles for sustainable development and act as catalysts for good practices in Southern countries.

The role of development finance institutions is to support and promote this movement.

This commitment to sustainable development leads to greater account being taken of the economic, social and environmental issues facing AFD’s partners and of the impacts of the funded actions. AFD is firmly committed to continuously achieving progress and implements this commitment to sustainable development through a twofold objective: prevent shortcomings and promote the positive impact that projects have on sustainable development.

37

C O R P O R AT E

SOCIAL

RESPONSIBILITY

6.1

GRI G4-SO4

Controlling risks of the misappropriation of aid, corruption, fraud, money laundering and terrorist financing

G4-58 G4-SO6 G4-DMA

Framework defined to more effectively prevent and monitor these risks

121

AFD Group officers*

also received face-to-face training on the AML/CFT mechanism

In 2015,

80

AFD Group officers

followed this training course

Corruption, fraud, as well as any form of misappropriation of public and private aid lastingly jeopardizes the Group’s mandate to take action to support the most vulnerable populations. This is also the case for any financing that would, without the knowledge of AFD and PROPARCO, lead to being involved in a money laundering or terrorist financing mechanism. In order to avoid any involvement in either of these offences without its knowledge, AFD Group has adopted a general policy.26 It is implemented through operational procedures which set out the controls that need to be conducted by AFD Group officers at the various stages of the project cycle.

During project appraisal, due diligence is conducted on the counterparty and, where relevant, on its shareholding structure up to the beneficial owner. Specific due diligence is also conducted on politically exposed persons.

During the project implementation phase, AFD Group also pays close attention to operations that may reveal fraudulent or money laundering practices which warrant a specific analysis.

The foreign public procurement contracts financed by AFD Group are, for their part, subject to a specific control. This control ensures that the various stages of the procurement process take place under the requisite conditions of integrity, transparency, equity and efficiency.

FIND OUT MORE www.afd.fr/lang/ en/home

26 AFD’s anti-corruption policy is available on its website: http://www.afd.fr/lang/en/home/ carriere/L-AFD-s-engage_1/securite-financiere_2

Non-Cooperative Jurisdiction as defined by the General Tax Code and OECD Global Forum on Transparency and Exchange of Information for Tax Purposes. http://www.proparco.fr/webdav/ site/proparco/shared/ELEMENTS_COMMUNS/ PDF/AFD_Group_policy_of_non_cooperative_ Jurisdictions.pdf

AFD Group’s financing agreements also include a number of clauses which impose undertakings on the counterparty in terms of the fight against corruption, cartels, money laundering and terrorist financing. These clauses make it possible to suspend disbursements, cancel the fraction of financing allocated to a contract for which irregular or non-compliant practices have come to light, and request the prepayment of all or part of the loan or grant which has been disbursed.

27

Finally, AFD Group is committed to participating in French policies to fight against tax havens and has adopted a rigorous and specific policy concerning the operations it conducts and projects it finances in Non-Cooperative Jurisdictions (NCJ).27 This policy is based on two

areas: (i) the first requires specific and enhanced due diligence when the legal arrangements for the project involve an NCJ; (ii) the second aims to specify the scope of the authorized operations and projects which AFD Group may finance in these territories.

Mechanisms for reporting information There is an in-house mechanism to report operational incidents. It allows AFD Group officers, through a reporting mechanism, to inform their superiors of any suspicion of irregular practices concerning projects.

Training Since the end of 2013, AFD Group officers have had access to two new e-learning training modules on the fight against money laundering and terrorist financing. They were used for selftraining in 2014. In 2015, 80 AFD Group officers followed this training course.

In 2015, 121* AFD Group officers also received face-to-face training on the AML/CFT mechanism.

In 2015, AFD also acquired an in-house tool for financial security (World-Check One by Thomson Reuters). This tool has been in place since 14 October 2015. 93 officers were trained in how to use it in 2015.

A specific training course was set up for new recruits on the “prevention, detection and management of risks of corruption and fraud during and outside the project cycle”. 50 officers took part in it.

Finally, AFD Group staff received training in the risks of internal and external fraud which the Group could fall victim to (“fraud to the CEO”, fraud, forgery, scams, theft, phishing, etc.).

31 people attended this session.

AFD also provides training based on a “feedback” format on the “prevention, detection and management of allegations of fraud and corruption in projects in overseas France” in the operational departments.

* This indicator was controlled by KPMG during the Management Report audit.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

38

FOCUS “Fighting against corruption means creating development”.

On 9 December 2015, a day was held on the topic of the fight against corruption and its challenges for AFD Group.

This day, which gathered a number of professionals (representatives from the World Bank, Transparency International and the Central Service for the Prevention of Corruption, an investigator from the European Anti-Fraud Office and a lawyer), gave AFD Group officers the opportunity to discuss and share their questions on issues related to the fight against corruption for a donor, recalling, as the Deputy Chief Executive Officer stressed during his introduction to the day “fighting against corruption means creating development”.

The discussions, during which practical cases were presented on the misuse of the financing of other donors, highlighted typologies of fraud affecting certain types of project (soft infrastructure), and particularly in the context of the award and performance of public contracts financed with aid, working methods showing the importance, for officers, of developing good reflexes in detecting abnormalities, the role and value of a zero tolerance policy, which shows the donor’s position and provides a form of protection for operational staff and, finally, the importance of the view of representatives from civil society – beneficiary populations, NGOs and other whistleblowers – who expect an irreproachable attitude on the part of donors.

This day, based on the practices of other donors and institutions, such as the European Union and World Bank, fed into reflection on the relevance of actions to fight against corruption and the misuse of AFD Group financing and identified possible ways of improving practices and operating methods.)

39

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Inter view

The team in charge of AFD Group’s Compliance function 2000s. Since this period, a very large number of French companies have strengthened their financial security and ethics mechanisms and have adopted a whistleblowing mechanism, which is sometimes called an “ethics alert” or “professional alert”.

AFD Group has just decided, after consulting its staff representative bodies and the approval of the Board of Directors, to set up a whistleblowing mechanism for its employees.

Can you tell us what this mechanism is all about?

A whistleblowing mechanism allows the employees of a company to report problems that may seriously affect the activity of a company or render it seriously liable.

This whistleblowing mechanism may be in the form of a telephone number, a form on the company’s Intranet website or a dedicated email address, for example. It is strictly regulated by the CNIL (National Commission for Information Technology and Civil Liberties). It complements the different whistleblowing systems that already exist and is in no way mandatory.

The creation of this mechanism is part of the Group’s Corporate Social Responsibility policy and aims to strengthen the tools available to AFD Group employees all over the world in the field of financial security and social legislation.

This mechanism in AFD Group is an important issue for the Group as it prescribes in advance the changes prescribed in the “Sapin 2” draft law on the transparency of economic life.

Indeed, this text lays down the obligation to prevent corruption risks. Companies subject to this obligation will need to take “effective” measures to prevent and detect risks, in France or abroad, of acts of corruption or influence peddling. Among the measures planned in the text, companies will be required to set up an in-house whistleblowing mechanism.

Is this a practice that is currently being developed?

Whistleblowing came about with the financial scandals which smeared the reputation of large financial groups in the USA in the

C O R P O R AT E

SOCIAL

RESPONSIBILITY

40

What types of alert does this mechanism concern?

This mechanism aims to allow AFD Group officers to issue alerts on suspicion of corruption, fraud and anticompetitive practices which tarnish the projects financed by AFD Group or outside of funded projects. The alerts can also concern the field of in-house social relations and be related to suspicions of discrimination, harassment, or involve issues of occupational health and safety.

How will this mechanism be coordinated with the existing mechanisms?

The aim of the whistleblowing mechanism is to strengthen the means of expression of each employee so that everyone participates even more in the mechanism to prevent, detect and manage the Group’s risks. It is an additional mechanism for AFD Group employees, which is not intended to replace the other whistleblowing channels that already exist – line management, internal audit, auditor, DRH, staff representation bodies, labor inspectorate. It is an alternative and voluntary way of whistleblowing when the employee considers that the existing whistleblowing procedures have not functioned properly.

What will be the role of the Ethics function in this mechanism?

The Ethics Advisor is the entry point for the mechanism. He must decide on the admissibility of the form of the report made by the issuer of the alert. When the eligibility of the form has been established, the alert is transferred to the departments concerned – the Operational Risk Monitoring and Compliance Department (CPC) for alerts concerning allegations of corruption or fraud, and the Human Resources Department (DRH) for those concerning social matters – which analyze the eligibility of the substance of the alert. These alerts are subsequently dealt with using the methods and mechanisms that already exist in AFD Group.

How will the confidentiality of information be ensured? Can the whistleblowing be anonymous?

Anonymous alerts are not admissible in order to ensure that the issuers take responsibility and limit risks of slippage, while guaranteeing the user of the mechanism that their identity will be anonymized with respect to the entities in charge of dealing with the alert.

In addition, the people in charge of dealing with the alerts are subject to an increased obligation of confidentiality, which is included in their employment contract, in accordance with the requirements of the CNIL. Finally, it should be noted that the protection of the issuer of the alert is provided for in French regulations and that protective provisions for this purpose have been included in the Labor Code. The “Sapin 2” draft law on the transparency of economic life also provides for strengthening the protection of the issuer of the alert.

The Compliance Committee is given an anonymized report, in the form of a typology of cases, on the different cases handled.

In practical terms, how will the system operate (entry point on the Intranet website, processing time…)?

The whistleblowing report will be received by the Ethics Advisor via an electronic form available to employees on the Group’s Intranet website.

The employee who has submitted the alert will be informed by the Ethics Advisor whether or not thei r report is admissible within 15 days following receipt of the alert.

They will also be informed by the Ethics Advisor of the way in which the alert has been handled, i.e. if corrective measures have been recommended and if other measures will be taken.

6.2

GRI G4-14

Managing the environmental and social impacts of projects A number of development operations may involve risks vis-à -vis the environment and populations concerned.

The approach taken by AFD Group is based on the World Bank Safeguard Policies and International Finance Corporation (IFC) Performance Standards and involves (i) assessing the environmental and social risks and impacts of each project submitted to the decision-making bodies and the remedial measures already planned to

G4-SO2 G4-DMA

be implemented by the beneficiaries of the financing; (ii) proposing additional measures to be implemented by the beneficiaries, which aim to limit these risks or offset the effects; (iii) monitoring the implementation of these measures during the implementation phase of the operation; (iv) managing unforeseen events; and (v) improving project quality and the environmental and social performance of the beneficiaries of its financing.

41

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Inter view

Jean-Noël Roulleau, Head of the Environmental and Social Support Division

2015: A year to enhance the effectiveness of the environmental and social risk management mechanism In 2015, AFD considerably developed procedures for environmental and social risk management. What was the reason for this?

As a reminder, a study was conducted in 2014 on the mapping of Environmental and Social Management Plans (ESMPs) for the higher-risk projects. This study showed that there were weak points in terms of monitoring these plans. The development of the mechanism comes in response to this observation.

What are the new measures which will strengthen this environmental and social monitoring?

The monitoring of higher-risk projects (projects classified A) should be made easier by the creation of a “B+” category of classification, which identifies projects with a high, but manageable, risk and consequently requiring less attention from AFD’s teams.

There are now fewer projects classified A and they will be monitored more closely.

Another effective way of strengthening this monitoring is that “Environment and Social Commitment Plans” (ESCPs) must now be included in the financing agreements concerning A, B + and B projects. The “Plans” aim to structure, together with the beneficiary of the financing, the planning for the entire environmental and social risk management process throughout the project.

What will be the content of these “Environment and Social Commitment Plans” to be annexed to the financing agreement?

This E&S Commitment Plan has been structured according to the ten new E&S standards which the World Bank is in the process of establishing. It can serve as a checklist summarizing all the E&S issues that are likely to be addressed during project preparation.

The intention is for the content of the ESCP to be gradually simplified, through a dialogue with the beneficiary of the financing, and only retain the E&S issues and activities that are actually relevant to the project in question.

This ESCP does not replace the other E&S documents, such as the E&S Impact

Assessment or the Resettlement Action Plan, which remain in effect when they have been deemed essential in order to address the project’s environmental and social issues.

What has been planned to assist actors with these developments?

These developments in procedures are combined with the continuation of the dedicated in-house training program.

E-learning and general training on the process and thematic training sessions (decent work, vulnerability to the climate risk…) will once again be implemented in 2016.

AFD’s Environmental and Social experts, who traditionally provide support in-house and for counterparts to analyze the risks, and for the implementation of E&S due diligence, will also contribute to assisting project teams in the application of this new due diligence.

A publication on the updated environmental and social risk management process is planned in the course of 2016. This is a way for AFD to reaffirm its objectives in terms of its level of requirements for sustainable development.

FOCUS PROPARCO: Enhanced ESG monitoring and support In 2014, PROPARCO adopted environmental and social performance tools and indicators to strengthen the environmental and social monitoring of projects. Monitoring is systematically conducted by independent consultants and/or PROPARCO’s team for the higher-risk projects. In 2016, a project Watch List will be introduced and presented to the Risk Committee.

In terms of governance, PROPARCO also conducts a corporate governance assessment of the companies in which it takes an equity stake and monitors, where required, the implementation of improvement measures negotiated with its client.

PROPARCO also focuses on scaling up the support provided to its clients on ESG issues. In 2015, 30 projects received support from PROPARCO to improve their environmental and social performance. Furthermore, 8 projects – companies and financial intermediaries – benefited from technical assistance.

PROPARCO will report on the effectiveness of these procedures and support via an analysis of the ESG performance indicators.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

42

6.2.1 Environmental and social risk management during the project cycle E &S risk management during the project cycle

FIND OUT MORE www.afd.fr/lang/ en/home

28

www.afd.fr/webdav/shared/RSE/AFD%20-%20 RSO%20-%20Liste%20d'exclusion.pdf

AFD Group does not finance certain projects due to criteria of an ethical, regulatory, environmental and social nature. These criteria are set out in an exclusion list, which is validated by the Boards of Directors of AFD and PROPARCO and published on their websites.28 In addition, in line with its Strategic Intervention Frameworks, the Group ensures that none of the projects it finances, whoever the initiator, contribute to forest degradation or deforestation and does not finance the purchase, promotion or multiplication of genetically modified seeds. In accordance with the law on development and international solidarity, AFD Group refuses to finance coalfired power plants.

The assessment of environmental and social risks is crucial prior to any decision to allocate financing. There is a typology of risks for each

sector, to which AFD Group responds in an appropriate manner via its environmental and social risk management process. A set of tools for ex ante assessment and environmental and social monitoring has been put in place.

The monitoring of the environmental and social risk distribution concerns all AFD and PROPARCO “project” operations, whether they are financed directly or via financial intermediaries (banking institutions in particular). For 2015, all AFD and PROPARCO projects were subject to an environmental and social analysis and assessment.

Given their specific features and environmental and social impact, which is negligible or impossible to assess, AFD’s “non-project” financing is currently not subject to an environmental and social assessment. This is, in particular, the case for Global Budget Support (GBS), loan refinancing for Heavily Indebted Poor Countries, the Study and Capacity Building Fund (FERC) and the Governance Capacity Building Fund (FRCG). This is also the case for financing by the French Facility for Global Environment (FFEM), projects initiated by NGOs and fund delegations from the EU and Ministry of Foreign Affairs and International Development (MAEDI), which have specific appraisal procedures.

E&S risk management throughout the project life cycle

E&S risk management throughout the project life cycle

Improve the quality of projects and environmental and social performance of beneficiaries of financing

Assess the environmental and social risks and impacts of each project submitted to the decision-making bodies Formalize these measures by contract Propose appropriate measures to limit exposure to these risks, or offset the impacts

PROPARCO

AFD

Pre-filter Identification

Assessment of risks and impacts

Monitor the application of these measures during the operation’s implementation phase

Manage unforeseen events

Decision

Supervision

> Exclusion list > Climate mandate > E&S classification > Provisional sustainable development opinion

> Final sustainable development opinion and action plans > Higher-risk projects: validation of impact assessments and E&S action plans prepared by the contracting authority

> Sustainable development opinion included in the note to the Board of Directors > Inclusion of the contracting authority’s E&S commitments in the financing agreement > Requests for reporting

> Monitoring of the implementation of the E&S commitments by the contracting authority > Analysis of and report on the effectiveness of the process by AFD based on periodic reports produced by the contracting authority and/or supervision missions

> Exclusion list > Climate mandate > E&S classification > Level of E&S due diligence

> E&S audit of companies and/or analysis of E&S gaps in the impact assessments compared to IFC standards > Carbon footprint > Definition of E&S action plans

Inclusion in the legal documentation of: > E&S clauses > Action plans > Requests for reporting

> Monitoring of the implementation of the E&S action plans and management of unforeseen events > Reporting > Technical assistance where required

43

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Environmental and social risks of AFD’s portfolio in 2015

FI

FI

A 56

1,278

70

A

NUMBER OF PROJECTS

C

96

121

904

2,363

AMOUNTS (EUR M)

B 2,097

C

B Environmental and social risks of PROPARCO’s portfolio in 2015

A

FIC 5

FIC

4 12

NUMBER OF PROJECTS

FIB 26

56

B+

4 0

B C

FIB

305

B+: Moderate to high risks C: Little or no risks FIA: Financial intermediary - High risks FIB: Financial intermediary - Moderate risk FIC: Financial intermediary - Little or no risk

C O R P O R AT E

SOCIAL

RESPONSIBILITY

44

AMOUNTS (EUR M)

36 40

B+ B C

312

FIA

B: Moderate risks

86 164

16

A: High risks

A

FIA

Appraisal

Decision

For the higher-risk projects, the contracting authority conducts specific studies, with support from specialized consultants, such as an impact assessment and environmental and social audit, which describe the negative environmental and social risks and impacts, and propose the mitigation measures to be implemented. They are generally set out in an Environmental and Social Management Plan (ESMP).

Following these procedures, the Group’s specialized teams define specific environmental and social clauses and management plans for the environmental and social issues, which are included in the contractual documentation: loan, grant or equity investment agreements. Their implementation is monitored regularly, with support from independent consultants for the higher-risk projects.

For companies and financial institutions, AFD Group can request additional studies or audits in order to assess the compliance of their environmental and social practices with international standards.

Furthermore, attention is paid to ensure that the beneficiary takes the environmental and social dimensions into account in the bid invitations in order to give priority to responsible companies in the award of works contracts, especially for those with high impacts, and that the recommended mitigation measures will actually be implemented.

AFD has developed model bidding documents for this purpose, with enhanced environmental and social clauses, which are proposed to contracting

Enhanced E&S clauses in bid invitations:

22 works contracts are concerned

80% of future contracts should be integrating this type of clause

authorities for the implementation of high-risk works. An initial review of the mechanism was conducted in 2015. It concerns 22 works contracts.

80% of future contracts should be integrating this type of clause.

Monitoring AFD Group’s specialized teams monitor the implementation of the environmental and social commitments by the beneficiaries of financing, through the monitoring reports they prepare, supervision missions or with support from specialized consultants.

For projects with the highest environmental and social risk cofinanced with multilateral donors, it is necessary to provide for a Complaints Mechanism to be set up to allow the contracting authority to handle complaints. This mechanism gives people who may be affected by projects the possibility of having a mechanism to collect and provide a response to their complaints and concerns related to the project impacts.

6.2.2 Due diligence by sector AFD Group has adopted general policies to ensure that sustainable development goals are respected and promoted in all its activities. It also has a crosscutting exclusion list which indicates the types of project that it a priori refuses to finance due to criteria of an ethical, regulatory, environmental and social nature. Finally, it applies its sustainable development policies to its sectors of operation, which are described below: Mining sector AFD Group appraises very few operations in the mining sector. For the exceptional operations appraised in this sector, AFD and PROPARCO carefully examine the institutional environment and ensure that the companies and governments adhere to the principles of the EITI. Major dams AFD applies enhanced due diligence for projects to finance major dams, which includes taking into account issues related to natural resources and biological diversity, health, safety, working conditions, land acquisition, involuntary displacement and population resettlement, dam safety with regard to the impacts of climate change, etc.

Agriculture and the food sector “Zero deforestation” target AFD Group ensures that none of the projects it finances, whoever the initiator, contribute to forest degradation or deforestation. On the contrary, the agricultural projects supported

must promote the conservation and restoration of forest areas and ecological corridors. The programs to extend or rehabilitate large plantations of perennial crops and monospecific forestry apply an exemplary “zero deforestation” policy. This policy requires that there is no loss of primary forests or biodiversity and compensation actions for any loss of secondary forests.

Respect of land rights The Group uses the “Guide to Ex Ante Analysis of Agricultural Investment Projects that Affect Land” (perennial plantations, agro-industrial crops, hydro-agricultural, pastoral, forest structures, etc.). This grid was developed on the basis of the work of the members of AFD and PROPARCO’s “Land & Development” technical committee and gives a better understanding, during the appraisal, of the criteria for the sustainability of the investment, the equitable distribution of added value between farmers and companies and compliance with land rights.

Sustainable fishing AFD Group supports fisheries policies which aim to maintain or rebuild stocks, create added value by equipping actors ashore, obtain the environmental certification of fisheries and strengthen public or professional institutions, which are essential in continuously adjusting the fishing effort and ensuring the measures adopted are respected.

AFD Group refuses to finance • The purchase, promotion or multiplication of genetically modified seeds; • The production, use or trade of pesticides/ herbicides.

Energy Renewable energy and energy efficiency a priority AFD Group gives priority to financing renewable energy and energy efficiency, with the aim of reducing the energy divide and improving access in rural and suburban areas, but safe energy is also an objective (protection and strengthening of energy systems).

Gas and hydrocarbons: Towards energy security and a minimum environmental footprint AFD now finances very few projects in the gas sector. The Group plans to launch a specific study on the investments it could support in the gas sector, specifying its position and the conditions for its operations in the different geographical areas. The study will specifically focus on identifying the priority areas for development by analyzing the added value of a public development agency like AFD in this sector. AFD will ensure that these areas for development fit in with a proactive transition combining energy

45

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-SO2

FIND OUT MORE www.afd.fr/lang/ en/home

29

www.fao.org/nr/tenure/voluntary-guidelines/en 30

31

www.foncier-developpement.fr

www.foncier-developpement.fr/wp-content/uploads/ Guide-analyse-ex-ante.pdf 32

security and a minimum environmental footprint.

It will, in particular, be necessary to distinguish operations between countries which have natural gas resources and those which rely on imports. AFD finances initiatives, alongside the World Bank and other donors, to limit gas flaring and find economic opportunities for recovered gas, on isolated production sites.

AFD appraises very few operations in the infrastructure sector related to the extraction of hydrocarbons.

http://www.diplomatie.gouv.fr/en/IMG/pdf/ Formalising-land-rights.pdf

Supervision of the development of biofuels Finally, the Group ensures that the development of biofuels is scrupulously planned and supervised to ensure that it benefits local communities, respects the environment, without destroying the forest heritage (positive carbon and energy footprints), and does not compete with local food crop production.

AFD Group refuses to finance • Coal-fired power plant projects if they are designed without CO2 capture or storage.

FOCUS 16th Annual World Bank Conference on Land and Poverty In order to address the acceleration of the history of land, largescale land acquisitions by investors, strong population growth (including in rural areas) and rapid urbanization in Africa with the associated rural development challenges, urban development and employment, in particular in the agriculture sector, most development agencies (DFID, FAO, KfW, USAID, etc.) work to define principles to improve land governance and supervise investments in the agriculture sector.

The 16th Annual World Bank Conference was held on this topic.

Over 1,200 participants – researchers, decision-makers, experts – from 123 countries came together to discuss the issue of: “Linking land tenure to land use” and, more specifically, the application in practice of the Voluntary Guidelines on the Responsible Governance of Tenure adopted in May 2012.29 Two guidance documents, prepared in partnership with the Land Tenure and Development Technical Committee,30 were presented by AFD and the Ministry of Foreign Affairs and International Development: the Guide on Agricultural Investments Projects that Affect Land31 and a general policy document on formalizing land rights.32 The latter puts into perspective the various experiences of formalizing land rights in the South over the past 30 years, questions their relevance, and identifies the conditions in which they can actually secure the rights and promote inclusive economic development.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

46

6.2.3 Due diligence on human rights

Consequently, the issue of the application of international standards for human rights is constantly raised and integrated into the implementation of all types of project. AFD Group uses the IFC Performance Standards and World Bank Safeguard Policies for this purpose.

AFD Group operates in countries where human rights are not always fully respected, despite the fact that these countries officially adhere to the relevant international conventions.

It is obligatory for the financing agreements signed with partners and beneficiaries to mention compliance with the ILO Fundamental Conventions in order to make them legally binding.

The mandatory due diligence in the field of operations specifically looks at child labor, forced or compulsory labor, the impact of population displacements, the respect of the rights of indigenous populations and the ban on operations in certain sectors.

This concerns all projects subject to the environmental and social risk management procedure, i.e. 100% of projects at AFD and PROPARCO.

FOCUS Lao PDR – Support for displaced populations around the Nam Theun 2 dam

The Nam Theun 2 dam is the largest hydroelectric dam and was commissioned in 2010. This project is monitored by donors, including AFD – which has been a stakeholder of this project for over 10 years –, particularly with regard to the environmental and social support and compensation measures. A panel of experts conducted a supervision mission on this issue from 18 April to 9 May 2015.

The objective of generating electricity from the dam has been achieved, but a component to support populations displaced for the construction of this dam needs to be completed. The main measure in question involves helping the 6,000 people recover a standard of living at least equal to what they had prior to the construction. Since 2013, 97% of the displaced persons have been above the poverty line, but the situation remains fragile. In this context, AFD is contributing to supporting displaced populations so that they recover sustainable sources of income. In this respect, forestry, fishing and livestock raising activities are specifically targeted, as they are activities suited to the resettlement area.

47

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-SO2 G4-FS11 G4-DMA

Inter view

Sylvain Clément, Deputy Director of the Yaoundé agency, Jean-Michel Mignot, Social and Environmental expert, and Didier Renard, Water and Sanitation project officer

Stormwater drainage in Douala: Discussions on measures to manage the social impacts of the project The project Didier Renard: The project involves rehabilitating 48 km of watershed drainage channels in the urban area of Douala. It aims to contribute to solving the recurrent problem of flooding affecting the city and neighboring populations. In addition to the civil engineering works, the project also includes a capacity building component for the contracting authority, as well as an information, education and communication component for the population. The project is being conducted by the Urban Community of Douala (CUD) and is in line with the city’s Urban Master Plan. AFD is financing the project for a total amount of EUR 130m.

This financing is partly based on the “Debt Reduction-Development Contract” signed between France and Cameroon (EUR 18m) and the remainder on a sovereign loan (EUR 112m). The works will begin in April 2016 and are scheduled to last for 2 years.

Social impacts Jean-Michel Mignot: The project area is prone to flooding, partly marshy, and ill-suited for housing. It has been receiving vulnerable populations since the beginning of the 20th century. To date, most of them do not have a property title. This project will involve displacing part of this population, meaning just under a thousand families.

A core component of the project is the establishment of expropriation, resettlement, compensation and support plans.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

48

Issues concerning the implementation of social due diligence Sylvain Clément: Paying attention to respecting the rights of people who are directly affected by the project is a core component, in line with our mandate and our requirements, but this component can prove to be difficult to manage! An example: the process leading to the compensation of populations can take a certain time, which contrasts with the urgent need of the contracting authority and final beneficiaries, in this case, those who suffer from flooding.

The improvement and strengthening of stormwater drainage in Douala constitute both a strong and longstanding demand from the city’s population and a political priority for local elected officials and the Cameroon authorities. There was an extremely intense dialogue with the urban community in order to reconcile these interests.

Didier Renard: Similarly, it was, and remains, necessary to hold a dialogue on the proposal to reduce the roads on the banks of the channels in order to limit the number of people to displace. We do not encourage a systematic application, but section by section (stretch by stretch), to achieve an optimization that takes into account the geography of the area and its integration into the urban fabric.

Outlook Didier Renard: There is an ongoing dialogue with CUD on these issues. For example, the operating method to apply the compensation decree for the affected populations still needs to be defined. In my opinion, the crucial point is to ensure that these issues are taken up by the project managers and executing companies.

It also seems necessary to me, when an issue like this arises and if we want to do things well, to anticipate it.

Sylvain Clément: A point that needs to be taken into account is to ensure there is consistency between the positions of the different actors. For the compensation of people, the dialogue made it possible to position the cursor between local regulations – which are obsolete and not very favorable for the displaced persons – and donor standards, which are considered as being too demanding by the local authorities.

This dialogue has had a real impact, as it has allowed levels of compensation to be provided which are more in line with the legitimate aspirations of populations. On this issue of compensation, for many other projects there is a distortion between what is stated and what is actually done in the field.

In this respect, this project contributes to creating a legal precedent.

Jean-Michel Mignot: The implementation of social due diligence in this project benefits from a remarkable mobilization of the project officer and agency, as well as the responsiveness of the contracting authority and local actors to requests on the issue.

This mobilization has had tangible results: with the measures to optimize the banks, we have gone from some 2,018 right holders potentially affected by the project to 988.

FOCUS Douala Sustainable City – Raising awareness of flood hazards AFD’s support to the Douala, Sustainable and Resilient City project is accompanied by EUR 1.5m of financing from the French Facility for Global Environment. This support is mainly provided on three levels: • The acquisition of local knowledge of flood hazards and the impacts of climate change in order to more effectively take them into account in urban planning. For this purpose, the FFEM funds are contributing to the creation of a local urban observatory and financing to model data to be integrated into the city’s Green Plan; • Support for the definition of a consultation framework, which gives a participatory dynamic to the drainage and urban development project. It is supported by AFD for the construction of walkways in the center of the Maképé Missoké neighborhood, the creation of a “Green House”, which will be a place where stakeholders can meet and exchange ideas, the organization of the consultation with training and workshop meetings, and the involvement of a local association, Doual’art; • The economic and environmental development of the informal housing settlements on the site, with the objective of both developing areas, while restoring the wetlands based on an approach by level of service, and promoting and developing the recycling and market gardening activities, with the creation of local employment for recreational activities.

1,359 hours

*

of training concerning

human rights

19 people received training in the vulnerability of projects to climate change in 2015

6.2.4 Training

• A 3-day face-to-face training session on the same topic of E&S risk management was held at headquarters in December 2015 with 14 participants, including 2 from agencies. It will be organized twice a year, starting in 2016;

Various training modules are offered to AFD employees to help them integrate human rights into project financing and gain an understanding of the contexts in which AFD operates.

• In 2015, 19 people also received training in the vulnerability of projects to climate change;

• An e-learning module on E&S risk management was launched in 2015. 17 officers attended an initial pilot session, including 14 in agencies and 2 at headquarters. A new session will be organized in 2016;

• In 2016, PROPARCO will once again be organizing a training cycle for its investment officers; • In 2015, 1,359* hours of training concerning human rights were dispensed for officers and 147 officers at headquarters relating to this topic.33

33 The training taken into account is training on “gender and development”, “child labor”, “conflict-sensitive programming”, “psycho-social programs, vehicles for development” and risk management. * This indicator was controlled by KPMG during the Management Report audit.

49

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-HR2)

6.3

GRI G4-EC7

Contributing to the Sustainable Development Goals

G4-EC8

Our results in the field

PROPARCO Overall expected results of projects committed in 201534 THE ECONOMIC FABRIC EUR 749m will be generated in the countries of operation via salaries and profits

AFD Ex post results of 2015

480,000

passengers a day use new or upgraded public transport TRANSPORT

ENERGY Generation of 3,187 GWh of renewable energy capacity a year 675,828 of teq CO2 emissions avoided every year EMPLOYMENT 120,000 direct jobs created or maintained and 750,000 indirect jobs in the value chain (suppliers, clients) of funded companies, infrastructure and banks

75,700

people connected to the electricity distribution grid or gaining access to electrification ENERGY

1,181

MW of installed renewable energies

HEALTH 380 additional beds installed to increase the capacity of hospital structures EDUCATION 45,700 students will benefit from high-quality services in the funded structures MICROFINANCE Access to microfinance for 145,827 people Financing and cofinancing committed in 2014.

34

C O R P O R AT E

SOCIAL

RESPONSIBILITY

50

380,000

people with improved or secured housing POOR NEIGHBORHOODS

1.8 million

people gained access to a sustainable source of drinking water WATER AND SANITATION

220,000

gained access to an improved sanitation system

15,597

1.3 million

children attending primary and secondary school

small businesses have benefited from support or financing MICROFINANCE AND ECONOMIC FABRIC

EDUCATION AND EMPLOYMENT

142,000

young people received in vocational training systems

700,000

family farms directly supported AGRICULTURE

95% of operations were subject to a sustainable development opinion

6.3.1 Sustainable Development Analysis and Opinion In 2014, AFD established a “Sustainable Development Analysis and Opinion”. It aims to ensure that operations financed by AFD contribute to the different dimensions of sustainable development by a questioning throughout the project appraisal process. It involves a “sustainable development analysis” conducted by the project team during the appraisal, which assesses the expected outcomes – either positive or negative – for each of the dimensions of sustainable development, and an independent “opinion” set out in the notes to the decision-making bodies. The mechanism now covers practically all of the projects financed by AFD.

In 2015, 95% of operations were subject to a sustainable development opinion.

In 2015, a tutorial was made available to all employees to help them get to grips with the mechanism. It presents, using practical examples, the methodology for analyzing and rating the six dimensions of sustainable development.

Capitalization work on the mechanism is ongoing.

It will refine certain aspects of the analysis (the dimensions of “economic development”; “social well-being” and “governance/project sustainability”) and ensure they are fully consistent with the Sustainable Development Goals (SDGs).

DIMENSION 2 Social well-being and reduction of social imbalances

DIMENSION 1 Economic development

SOCIAL ECONOMIC

DIMENSION 3 Gender equality

SUSTAINABLE DEVELOPMENT

DIMENSION 6 Sustainability of project impacts and governance framework

DIMENSION 4 Biodiversity conservation, management of natural environments and resources

ENVIRONMENTAL

DIMENSION 5 Fight against climate change and its impacts

GOVERNANCE

51

C O R P O R AT E

SOCIAL

RESPONSIBILITY

FOCUS Implementation of the sustainable development opinion PERU Financing investment projects to fight against climate change in the agriculture sector: A project in line with all the dimensions of sustainable development EUR 50m of financing has been allocated to the Peruvian agricultural bank – AGROBANCO – the State’s main instrument to finance the agriculture sector. The aim is to support its transformation into a sustainable development bank. Indeed, Peru’s agriculture sector is marked by strong social inequalities (8% of land is owned by about thirty owners) and faces issues concerning environmental sustainability (it causes half of GHG emissions; soil degradation) and vulnerability to climate change.

The sustainable development analysis of the project emphasized the fact that there was a positive contribution to all the dimensions of sustainable development.

The analysis highlights the expected outcomes for the fight against climate change and its impacts, both in terms of adaptation (e.g. water management) and mitigation (e.g. land use, energy efficiency). They were also included in the INDC submitted by the Peruvian authorities for the preparation of COP21 (30% reduction of GHG emissions by 2030 compared to a trend scenario).

In addition to these positive aspects for the environment (more economical technologies in terms of natural resources), the project aims to achieve significant impacts for economic development, with increased competitiveness of farms through better agricultural practices.

Significant impacts on social well-being and reducing social imbalances are also expected by targeting Peru’s banking activity towards small and medium-sized farms which find it more difficult to access credit in the most disadvantaged regions.

Finally, the extensive technical cooperation program combined with the financing (technical support for the project initiator, implementation of the environmental and social risk management system and in-house CSR component, etc.) will guarantee the development impact of this project.

BENIN “Porto-Novo Green City” – Financing a climate change adaptation project AFD is providing EUR 8m of financing to the municipality of Porto-Novo in Benin to assist it in developing the lagoon area in order to protect existing wetlands and structure existing activities. The project aims to reconcile biodiversity protection, urban growth and development and the improvement in the quality of life for the population of Porto-Novo (renovation of and access to public spaces, fight against urbanization in flood-prone areas, conservation of nature in the city).

This project not only plans activities aiming to preserve and develop the lagoon area (sensitive ecosystem – preservation of biodiversity, management of natural environments and resources, adaptation to the impacts of climate change, economic development), but also, and on the basis of an in-depth analysis of the vulnerability of the territory of Porto-Novo, to prepare a sustainable urban development plan for the city (management of urbanization, land, and spatial development).

The analysis of the project also shows that the governing principle defined for the operating method is the rationale for co-construction and consultation. This will strengthen cohesion between the residents of the city (social well-being and reduction of social imbalances) and, in view of the importance given to gender issues, it will improve gender equality (orientation of development choices, access to rehabilitated and improved spaces, greater economic and social roles for women).

While there are still some institutional issues (renewal of municipal council, revision of the town planning code and land code and their potential impact on the preparation and approval of the urban development plan), the dynamism of the city teams, the involvement of civil society and planned support mechanism provide some guarantees concerning the sustainability of the project’s impacts.

The analysis of this project has highlighted the various contributions made by this operation to sustainable development issues for all of the six dimensions of the sustainable development opinion.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

52

6.3.2 Building the capacities of counterparts and partners

EUR 310m of financing were allocated to finance capacity building for partners in 2015

CEFEB contributed to building the capacities of some

2,000 executives

Attention is given to the capacity of beneficiaries to successfully implement their projects, by managing debt risks or via the capacity building tools. The aim of the capacity building activities is to allow the contracting authority to more effectively manage the works contracts and, in addition, handle the specific actions it is responsible for and for which the lack of experience can be detrimental to their proper performance.

AFD’s two main support methods are to share its know-how (sectoral expertise and institutional arrangements for the project) and finance external expertise activities (training, exchanges of experience, technical assistance).

AFD also supports capacity building with dedicated tools, such as the Study and Capacity Building Fund (FERC), the Governance Capacity Building Fund (FRCG) and the Technical Expertise Fund (FEXTE). All AFD’s sectors of activity are concerned, whether it be for residential technical assistance and short-term expertise, or periodic expertise.

PROPARCO manages the technical assistance activity of FISEA (Investment and Support Fund for Businesses in Africa), which supports capacity building for companies located in SubSaharan Africa. FISEA invests in them either directly or indirectly, via investment funds.

The aim of the EUR 6.5m technical assistance facility is to contribute to these objectives by helping improve the performance of companies through support for their capacity building: leadership and organization, marketing, human resources, financial management, technical functions. The FISEA fund is actively involved in the implementation of the Social Business strategy.

CEFEB, AFD’s corporate university, is one of the actors in capacity building for AFD’s partners. In 2015, the training center organized 68 seminars on topics such as public-private partnerships, project management and inclusive finance. It thereby contributed to building the capacities of some 2,000 executives, mainly from SubSaharan Africa, North Africa and Southeast Asia, from ministries, public institutions, financial institutions, companies and NGOs, including 75 young professionals for the long cycle (Masters Degree course in Public and Private Works and Project Management).

Breakdown of capacity building projects by geographical area and by sector financed in 2015

8

49

20

Productive sector Health

8

Multi-continent

Mediterranean and Middle East

27

Agriculture and food security

54

BY GEOGRAPHICAL AREA IN EUR M

85

157

Sub-Saharan Africa

Water and sanitation

110

BY SECTOR IN EUR M

22

Infrastructure and urban development

Education

Asia

11

Latin America and Caribbean

17

Other

51

Environment and natural resources

53

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-DMA

FOCUS Capacity building for smallholder cocoa farmers in Côte d’Ivoire via FISEA As an example, this technical assistance project aims to assist Advans Côte-d’Ivoire in the development of credit products for cocoa farmers in Côte d’Ivoire, who are grouped together in cooperatives, in order to facilitate their access to inputs (fertilizer and phytosanitary products) and control their use.

Advans Côte d’Ivoire has financed access to inputs for over 11,800 cocoa farmers in over 80 cooperatives. The repayment rate of the cooperatives was 100%. The product tailored to the needs of smallholders has now been developed. It is based on the specific functioning of the sector and includes all the partners (cooperatives, exporters, input suppliers).

Capacity building support in the Central African Republic The acute crisis in the Central African Republic (CAR) prompted AFD to take a new approach combining immediate and long-term actions.

This Capacity Building Support project comprises three phases: a “quick wins” rapid intervention phase, which combines a rapid analysis of capacity building needs and initial responses, in particular via training, an analysis phase, which aims to elaborate on the initial diagnostic of needs by developing actual capacity building plans through a participatory approach, and validate the methodologies used in the first phase. Finally, the last phase involves scaling up the capacity building support with assistance from several donors.

CEFEB-MEDNER partnership: A roadmap to develop the expertise in energy efficiency of Mediterranean actors in the building sector

CEFEB-AFD a partner of the Mediterranean Climate Forum (MEDCOP21)

Energy efficiency in buildings is a key issue in reducing energy consumption and supporting sustainable development in the Mediterranean region. Some 450 million people live on the two shores of the Mediterranean, mainly in urban areas, and the population is expected to continue to increase. Consequently, 42 million housing units will be necessary by 2030, which will lead to a 40% increase in energy demand.

Several projects supported by residential and commercial housing agencies have already led to the construction of energy-efficient buildings in compliance with the thermal regulations of each country.

The additional cost for the construction of an energy-efficient building is low (less than 10% in Morocco), with a saving on the energy bill which can be in excess of 50%. The social housing sector poses a specific challenge, with the need to reconcile energy-efficient buildings and renewable energy sources, and with a moderate cost.

From 1 to 3 June 2015, CEFEB jointly organized a workshop on energy efficiency in the building sector in the Mediterranean with ADEME and the association MEDNER, with a focus on social housing. Some fifteen donors, real estate developers and construction managers (engineering consulting firms, architects) from Algeria, Lebanon and Morocco attended this event.

This training workshop improved the participants’ knowledge of the basic principles of sustainable construction and allowed them to gain an understanding of all the regulatory, financial and social aspects related to it.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

54

Capacity building and Corporate Social Responsibility

8 new technical assistance

projects

AFD and PROPARCO contribute to the dissemination of Corporate Social Responsibility standards and help the organizations it finances take ownership of these practices and implement them. Consequently, certain projects receive specific support, technical assistance or financing in this area.

For example, for several years, PROPARCO has been developing capacity building tools in addition to its financial tools, with a range of technical assistance services which aims to assist client companies in their governance and in-house management, or improve their environmental and social practices. In 2015, 8 new technical assistance projects were initiated. One of them is dedicated to measuring the impacts of the client company.

CEFEB also includes the issues of social responsibility and sustainable development in its training programs via the Masters Degree course in “Public and Private Works and Project Management” (MOPP), technical seminars,

and the LeaD Campus program, a high-level training program for young African leaders from the private sector. In 2016, CEFEB will be proposing an MOOC35 on the energy and ecological transition, which aims to sensitize AFD’s partners in emerging countries to issues related to a more sustainable mode of development.

Partnerships have also been mobilized with the aim of building the capacities of partners and raising awareness of CSR. Partnerships with the French Global Compact network and the association RSE&PED were renewed in 2015, with the aim of helping these associations promote the principles of CSR to actors in the South. The actions conducted in 2015 include: • The participation by Global Compact and AFD in the first CSR forum organized in Togo; • The contribution to the webinar program developed by RSE&PED, which included organizing two webinars, one on mainstreaming gender issues into the environmental and social risk management process and the other on PROPARCO’s E&S risk management process.

FOCUS Cambodia – AFD launches a program with a high social impact in the garment sector In Cambodia, AFD is developing an integrated approach to the garment sector, with two interrelated objectives: promote the productivity and competitiveness of the sector, and improve working and living conditions for its employees.

Back in 2004, AFD supported the development and sustainability of a socially responsible garment industry via the “Better Factories Cambodia” program. This program was set up by ILO and aims to guarantee the quality of working conditions in factories.

AFD has also financed a pilot health microinsurance project. The project, called the “Health Insurance Project”, aimed to offer a voluntary health insurance system to employees in the sector.

AFD has allocated a loan to the Garment Manufacturers Association in Cambodia (GMAC) to build and equip a vocational training center for the garment industry and train trainers. This project should give some 8,000 Cambodian workers access to middle management and management positions. This will have an impact on income and employment and should give new professional opportunities to employees in the sector.

The conference organized on the garment sector by AFD in Phnom Penh in late 2015, “How to make the garment sector in Cambodia a model of competitive, social and sustainable industry”, gathered around a hundred people. The conference attracted actors from the sector and brought industry leaders, principals, ministries, NGOs, donors, trade unions and workers around the same table.

MOOC: Massive Open Online Course.

35

55

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-EN12 G4-EN13 G4-DMA)

EUR 253m were earmarked for AFD’s “biodiversity” activity in 2015

i.e.

EUR 246m excluding the delegation of funds from other donors in foreign countries and the French overseas territories.

6.3.3 Impacts on biodiversity AFD has adopted a Crosscutting Intervention Framework on Biodiversity for 2013-2016 in order to guide actions. The objective is to protect, restore, manage and develop ecosystems, mainstream biodiversity into development policies, and strengthen partnerships for biodiversity between France and developing countries.

For the first two years of the implementation of the intervention framework, the average volume of commitments stands at EUR 176m. In 2016, the mainstreaming of biodiversity into the intervention strategies and funded programs will be strengthened with tools such as the exclusion list for financing and ex ante analyses of their environmental impacts.

In 2015, 18 Group officers followed a training course on the topic of biodiversity, representing 619 hours of training.

6.3.4

C O R P O R AT E

SOCIAL

RESPONSIBILITY

56

37 M hectares have benefited from conservation, restoration or management programs in 2015

FOCUS Martinique: Promoting biodiversity conservation Martinique is characterized by a great diversity of ecosystems and habitats. Nationwide, it is home to 396 species of trees, including 14 which are unique to the island or endemic, 65 species of birds, 2 of which are endemic, 8 species of reptiles, 2 of which are endemic, over 500 species of molluscs, and 202 species of orchids.

The Martiniquans are fully aware of the island’s natural assets and the resulting challenges and have been implementing a proactive policy for several years to preserve and develop natural wealth.

The AFD loans allocated in late 2015 are supporting the Martinique Regional Nature Park’s actions to restore and promote Martinique’s natural heritage.

Three projects have already been set up: the creation of a pedagogical pavilion in the Domaine d’Emeraude in Morne Rouge,36 the refurbishment and fit-out of the reception premises of Vatable Forest in Trois-Ilets,37 and the rehabilitation of the Botanical Garden in Saint-Pierre.38

Online training: Protected areas management, for all!

AFD, via the France-IUCN partnership for Nature and Development, has cofinanced an MOOC (Massive Open Online Course), an online training tool on the topic of protected areas management.

This new tool is innovative, free and available to everyone. It will help give an understanding of the conservation challenges in Africa and how protected areas can help address them, from the local to global level. Management, governance and sustainability are among the themes it explores using the best practices published by the World Commission on Protected Areas (WCPA), case studies, and testimonies from all over Africa.

DRC: Sustainable forest management The Democratic Republic of Congo holds over 60% of the Congo Basin forests, but its industrial timber production is low compared to exporting countries in the region (less than 5% of exported timber). However, its forests are threatened every year by the extension of traditional slashand-burn agriculture39 and the multiplication of artisanal exploitation.

The most threatened areas are forest concessions, the outlying areas of cities and community forests.

AFD has allocated a EUR 6m grant to contribute to sustainable forest management in the Congo as part of a project initiated in 2011. This financing is contributing to the efforts made to protect the Congolese forests, which play an essential role in carbon storage and account for several years of global greenhouse gas emissions.

http://www.afd.fr/webdav/site/afd/shared/PORTAILS/PAYS/MARTINIQUE/PDF/PNRM%20-%20Emeraude.pdf http://www.afd.fr/webdav/site/afd/shared/PORTAILS/PAYS/MARTINIQUE/PDF/vatable.pdf 38 http://www.afd.fr/webdav/site/afd/shared/PORTAILS/PAYS/MARTINIQUE/PDF/jardinbotaniqueo.pdf 39 Agrarian system whereby the fields are cleared by fire, which transfers fertility. They are subsequently cultivated for a short period and left fallow.

36 37

57

C O R P O R AT E

SOCIAL

RESPONSIBILITY

6.3.4 Impacts on climate change

GRI FS8

Climate change has become a key issue for AFD’s economic model.

Climate change complicates efforts to reduce poverty by causing increasingly frequent and serious damage in economically precarious areas, and by introducing the need for a lowcarbon path.

FIND OUT MORE www.afd.fr/lang/ en/home

The Gender CIF is available on its website: http://www.afd.fr/webdav/site/afd/shared/ partenaires/CIT-genre.pdf

Climate change issues are mainstreamed into AFD’s strategy through objectives formalized in the “Climate” strategy for 2012-2016: • Achieve and maintain an objective for 50% of AFD’s annual allocations in developing countries to have “climate co-benefits”, and for 30% for PROPARCO’s annual allocations; 40 • Systematically assess the carbon footprint of directly financed projects that have a significant impact in terms of greenhouse gas emissions (positive or negative). An ex ante analysis is required of the carbon footprint of all directly financed projects (excluding budget support, financial intermediation and capacity building) which have a significant and quantifiable impact in terms of greenhouse gas emissions (increase or decrease); • Select projects with regard to their impact on the climate, taking into account the level of development of the countries in question.

The impact of projects in terms of greenhouse gas emissions is taken into account via the application of a selectivity grid, which may lead to certain projects not being eligible for AFD financing, depending on the level of development of countries and their climate policy. This grid identifies 3 categories: mitigation or “neutral” project, emissive project (>10 kt CO2 a year) or highly emissive project (>1 Mt CO2 a year).

In 2015, EUR 2.9bn* were committed by AFD Group for “climate” projects, corresponding to a participation in financing 82* development projects with co-benefits for the fight against climate change and its impacts. Financing for mitigation (reduction of greenhouse gas emissions) accounted for EUR 1.678bn and EUR 575m were earmarked for adaptation projects.

Among the projects with a significant carbon footprint calculable ex ante, it has been established that in 2015, 30 mitigation projects cofinanced by AFD Group will contribute to reducing or avoiding greenhouse gas emissions by 3.3m CO2 teq a year throughout their lifespan.

Direct financing for renewable energy projects accounted for EUR 536m, for example, to support an increase in hydropower generation capacity or wind, solar or biomass generation.

In 2015, 20 officers received training on the topic of the fight against climate change.

AFD was accredited as a financial intermediary for the implementation of financing from the Green Climate Fund (GCF) in July 2015. Alongside 12 other institutions, including the World Bank and European Bank for Reconstruction and Development, AFD joined the first seven institutions accredited back in March 2015.

Following a strong mobilization throughout 2015 (Climate Finance Forum, Lyon Climate and Territories Summit, etc.), at COP21, AFD was able to promote a great deal of research and expertise in fields as diverse as climate finance, cities, agriculture, the building sector, transport, the energy transition, vocational training, forests, water etc.

FOCUS Colombia: Supporting climate change policies Colombia is a low emitter, but is highly vulnerable to climate change due to the interannual climate variability of the El Niño-La Niña phenomenon. Its population is divided between the highlands (Andean regions), which are prone to water shortages and land instability, and coastal areas which suffer from a rise in the sea level and increased flooding.

It is in this context that AFD allocated a EUR 275m loan to support Colombia’s climate policy. It is combined with a technical cooperation program on energy, the macroeconomic management of climate finance, and sustainable rural development.

The commitment for the Asia and Latin America regions stands at 70%. For the Mediterranean and Sub-Saharan African regions it stands at 50% and 30%, respectively. * This indicator was controlled by KPMG during the Management Report audit.

40

C O R P O R AT E

SOCIAL

RESPONSIBILITY

58

FOCUS Coalitions of financial actors to fight against climate AFD has played a leading role in moving structural issues ahead in terms of climate finance and bringing together a coalition of financial actors from the North and South. This has in particular concerned: • Establishing accounting standards on climate finance for mitigation and adaptation between IDFC (International Development Finance Club), which includes 22 major development banks from the North and South, and MDBs. Work on developing and sharing this method will continue, with the aim of making it the international reference adopted by funders and referenced by UNFCCC for climate reporting; • Setting up an international initiative on “the principles of mainstreaming climate into the strategies and practices of public and private funders”. This initiative aims to establish international “climate” principles and standards for the financial world. A coalition of 26 banks was launched at COP21. The initiative is being structured and gaining momentum with the objectives of new deliverables in 2016 and the extension of the coalition; • Achieving significant progress in terms of harmonizing international financial practices: i) for carbon footprint measurement and ii) for reporting on green bonds. This work will continue and be extended to other sectors in 2016.

Cities and climate initiatives In the context of the Lima Paris Action Agenda (LPAA), COP21 saw the increasing importance of the role of non-State actors, particularly local governments. 38 international actors at COP21, including AFD, recognized the importance of collective action to support the efforts made by sub-national actors for the fight against climate change by 2020. This commitment has led to a Five-Year Vision, which outlines the modalities for the operational implementation via 4 pillars (planning, resilience, financing and vertical integration).

In this vision, AFD is particularly involved in the implementation of actions to prepare projects, design innovative mechanisms, and disseminate knowledge via three programs: (i) “100 cities/100 climate projects” initiatives, (ii) design of innovative financing mechanisms, (iii) support for the City Climate Finance Leadership Alliance.

Supporting renewable energy in Africa The Africa Renewable Energy Initiative (AREI), which is strongly supported and followed by France, aims to provide Africa with 10 GW of additional renewable energy by 2020 and has a target of 300 GW by 2030. On the financial level, 10 donors have pledged to mobilize USD 10bn over the next four years, including EUR 2bn for France via AFD.

Contribution to the definition of national contributions for COP21 (Intended Nationally Determined Contributions – INDC) AFD has set up a EUR 3.5m grant facility which aims to assist African countries and Small Island Developing States in defining their national contribution in the context of the international negotiation on climate change. Twenty-six countries, mostly in Africa, directly benefited from short-term assistance in defining their INDCs.

59

C O R P O R AT E

SOCIAL

RESPONSIBILITY

6.3.5 Impacts on gender equality

GRI G4-FS7 G4-DMA

With reference to AFD’s Gender41 strategy, AFD’s projects42 are examined with regard to the contribution they make to reducing gender inequalities. Consequently, AFD has made a commitment for at least 50% of projects financed in foreign countries to have the promotion of gender equality as the primary or secondary objectives, according to the definition of the DAC marker.

In 2015, 41.5% of projects met these criteria: 36.7% of these projects were rated 1 (secondary objective) and 4.8% rated 2 (primary objective).

The objective for 2016 is 45%.

In 2015, several tools were developed to support the operational implementation of this strategy: • A “Gender Break” information program, which offers an introduction to the main

concepts and themes (gender and women, gender mainstreaming…). It provides information on gender mainstreaming in the international development agenda (conferences and reference international legislation, post-2015 gender issues…). It will be implemented in development actions on a sectoral and operational basis (gender and education, gender and agriculture…); • “Gender Profiles” (22 to date): country fact sheets which provide contextual data on the social, economic, legislative and institutional specificities for gender in each country.

They also identify the various national, international and governmental actors and NGOs working on gender issues in the country.

These fact sheets can serve as a basis for the development of dialogues and cooperation between AFD and these actors present in the country; • Toolkits (9 to date), which aim to facilitate gender mainstreaming into the different sectors of operation, as well as AFD’s E&S due diligence.43 These toolkits are available at afd.fr.

Number of projects including a Gender dimension in 2015 (Scope: AFD)

10 4.8%

85

AFD PROJECTS INCLUDING

36.7% A GENDER DIMENSION IN 2015

134 59%

(IN N° OF PROJECTS

Significant objective

AND %)

EUR 26m

30

PROJECTS AT THE INITIATIVE OF NGOs INCLUDING A GENDER DIMENSION IN 2015

35

EUR 35m

(IN N° OF PROJECTS AND EUR M)

6

Main objective

EUR 4m

Other projects

There are 3 criteria to define a social business:

6.3.6 Social Business Social business is an important issue for AFD Group, as it acts as a catalyst for private initiatives and innovation for development. The objective is to support projects conducted by companies or private actors which want to give excluded populations access to essential services, such as health, education and financial services. It also involves promoting financially sustainable projects, which can be reproduced and are less burdensome on public resources.

• Have a social or environmental objective, the aim of which must be the rationale of the enterprise; • Not be dependent on grants and have an autonomous and sustainable economic model; • Have management practices that are consistent with the social objective, particularly in terms of governance, socially responsible practices and profitability targets.

Operations with companies from the inclusive economy are part of the 10 objectives of PROPARCO’s strategy for 2014-2019. They also provide an opportunity for AFD Group to support more sustainable and shared economic growth and improve living conditions for the poorest.

Crosscutting Intervention Framework on Gender, which was approved by the Board of Directors in March 2014.

AFD’s Gender CIF is available on its website: http://www.afd.fr/webdav/site/afd/shared/partenaires/CIT-genre.pdf 42 The scope this indicator applies to is: loans and grants (209 Program project support, Trade Capacity Building Program, microfinance, Solidarity-Health-Sahel Initiative), C2Ds, financing for NGO initiatives.

GBS, FERC, FRCG, non-earmarked credit lines and delegated funds are not included.

43 Education, training, employment; Health and social protection; Private sector, entrepreneurship and financial inclusion; Water and sanitation; Transport and mobility; Urban development; Rural development, agriculture, biodiversity; Energy; Environmental and social due diligence.

41

C O R P O R AT E

SOCIAL

RESPONSIBILITY

60

Inter view

Bertrand Willocquet, Director of the Istanbul agency

Actions for gender and gender equality led by the Istanbul agency The Istanbul agency launched several actions for gender and gender equality over two years ago. What is the context of this policy?

One of the priority areas defined by the Istanbul agency in its strategy for 2014-2017 does, indeed, concern promoting equal access to employment for men and women. The participation rate for Turkish women is under 30%, meaning the lowest in OECD countries.

Our aim, through our action, is to contribute to reducing all the types of barriers that women can meet in the employment sector, as an increase in female participation in the labor market is today a prerequisite for the economic development of Turkey, which has set the ambitious objective of being one of the world’s top ten economies by 2023.

Furthermore, the 1st W20 (Women20) summit was created at the initiative of Turkey, under its presidency of the G20, and was held in Istanbul on 16 and 17 October 2015.

In practical terms, what actions is the agency conducting to contribute to this pro-gender objective?

Since 2013 and the adoption of its gender strategy, AFD in Turkey has scaled up

exchanges with Turkish actors working to support women’s employment (particularly ministries, municipalities and NGOs), conducted studies and organized meetings (with support from the French ConsulateGeneral) in order to contribute to the debate on reducing gender inequalities in employment.

For example, AFD initiated a study on early childhood, called “Supporting Access and Continued Employment of Women by Enhancing Child Care Services in Turkey”. The study conducted by Development Analytics proposes to develop affordable care services for young children both in the private and public sectors, by implementing an early childhood policy. Improving care facilities is today considered as one of the prerequisites to providing women with access to the labor market and maintaining them in employment.

How does the agency involve local actors in this reflection on gender in Turkey?

The agency contributes to feeding into this reflection via a dialogue with the many local associations involved in this subject.

A workshop was organized in July 2015, on the theme mentioned before, on the role that child care services play in women’s access to the labor market. For the first time, it gathered some fifty participants committed to defending women’s rights and from the political sphere (two recently elected MPs in

the constituency of Istanbul), municipal sector (three municipality city halls represented), associations and economic sphere (over fifteen associations and NGOs were present).

We also have regular exchanges with donors to identify projects which can receive future financing. For example, last July, we hosted the 4th roundtable on gender at our agency office gathering all donors. This meeting gave the Istanbul agency the opportunity of advocating for our approach, which aims to promote all types of direct or indirect operation to support women’s employment and their empowerment. An expanded conference, in partnership with the French Consulate-General, on women’s employment in Turkey and the various types of child care services has also been scheduled in March 2016: it will provide the opportunity of promoting French expertise and experience in this field and of giving the floor to Turkish actors on the situation of women on the labor market.

FOCUS Social Business – Development of a tool to analyze social businesses in partnership with the CERISE network AFD set up a mechanism to support social enterprises in early 2015. It is intended for private organizations (associations, mutual organizations, cooperatives, foundations, commercial enterprises) whose primary objective is a social and/or environmental mission, with an economic model that aims to reach financial equilibrium in order to ensure it is sustainable.

There is an apparent need to define clear and shared criteria in order to give greater credibility to approaches related to social business and avoid diverted uses of this concept. It is in this context that AFD has developed, with the CERISE44 network (which is specialized in microfinance), a tool to analyze social enterprises in a working group gathering about ten organizations.

This reference system is an analysis grid comprising 7 “Ps”: Project, Public, Products and services, HR Policies and social practices, ethical Principles, Profit, Partnerships. These dimensions are independent and make it possible to take account of a set of structural components for social entrepreneurship.

44

www.cerise-sb.org

61

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI FS6

GRI G4-DMA

7 Promote a responsible organization in its in-house operation

I

n a context of change and major strategic developments, building and consolidating human capital is one of the key areas of AFD Group’s human resources management strategy and is reflected in Corporate Social Responsibility commitments.

The objective of AFD’s Corporate Social Responsibility as an employer is to provide the most favorable working conditions possible in order to attract and retain talented people, offer rich and motivating career paths, promote diversity in AFD Group, strengthen in-house cohesion and, finally, encourage a continuous and high-quality social and managerial dialogue.

C O R P O R AT E

SOCIAL

RESPONSIBILITY

62

3

5

7.1

GRI G4-10

Supporting career paths for all and a meaningful work environment

G4-LA1 G4-LA3 G4-EC3 G4-EC5 G4-EC6

Gender ratio:

7.1.1 Employment conditions

level of qualification, increased feminization – particularly for management functions – as well as the development of the use of local skills in countries where AFD is established by recruiting highly-qualified local executives in the agencies.

AFD Group today employs 2,185 officers worldwide. Over the past ten years, the headcount around the world has increased by 34%. This development is characterized by a rejuvenation of staff, a higher average

Locally recruited executive officers account for 22% of the headcount in the network. In 2015, the total number of recruitments stood at 136 new employees, including 54 recruitments of local staff.

(Scope: Group)

52.8% of women

Breakdown of headcount by gender and age* 60 and +

96

58

55 to 59

154

157

50 to 54

156

145

45 to 49

144

137

40 to 44

157

167

35 to 39

154

230

30 to 34

119

192

25 to 29

50

64

24 and -

2

3

115

International volunteers

348

Headcount of the Instituts d'Emission

575

TOTAL HEADCOUNT OF AFD GROUP IN 2015

1,262 Staff recruited in mainland France

45.7

Locally recruited staff (foreign countries and French overseas territories)

43.4

= 1,032 = 1,153

2,185

44.5 136

French overseas territories

Average age*

45.7

384

43.4

Sub-Saharan Africa and Indian Ocean

44.5

GEOGRAPHICAL BREAKDOWN OF THE GROUP’S* “NETWORK” HEADCOUNT

66

Latin America and Pacific

45

133 Asia

104

Mediterranean and Middle East

Excl. France, excl. the Instituts, excl. TA, MAD, DET This indicator was controlled by KPMG during the Management Report audit.

45 *

63

C O R P O R AT E

SOCIAL

RESPONSIBILITY

In-house mobility:

231

Recruitments and departures of officers on permanent contracts in 2015 (Scope: Group)

In 2015, the total number of departures stood at 101* worldwide (50* officers from the general framework and 51 local employees).

employees in 2015 Officers from the general framework

Locally recruited officers

Total

TOTAL

82

54

136

incl. Instituts

4

5

7

Recruitments

Integration of young people:

27% of recruits are under 30

Reasons for departure Retirement

115 international volunteers

118 interns

28 GRI G4-LA3

fixed-term professionalization and apprenticeship contracts in 2015

Officers from the general framework*

Locally recruited officers*

Total departures*

Turnover rate*

21

14

33

1.6%

Contractual termination

6

0

6

0.3%

Resignation

12

15

27

1.3%

End of secondment

4

0

4

0.2%

End of fixed-term contract

0

19

19

0.9%

Departure after trial period

2

0

2

0.1%

Dismissal

4

2

6

0.3%

Death

1

1

2

0.1%

TOTAL

50

51

101

4.7%

incl. Instituts

5

9

14

Parental leave45 (Scope: France)

2012 2013 2014 2015

Recruitment:

136

GRI G4-EC3

new employees, 82 recruited in mainland France and 54 recruited abroad or in overseas France

Number of employees who left on childcare leave during the year

11

11

15

Incl. % women

100

100

100

100

Incl. % returned or retained

100

100

100

100

Social benefits depending on type of contract

AFD ensures that the salary level of its officers is competitive and motivating, both at headquarters and in the different agencies around the world. The wage policy applied is regularly analyzed for each market on the basis of common principles, but also by adapting this analysis to the different country contexts.

Locally recruited officers have social benefits comparable to those of officers in the general framework.

Furthermore, all officers benefit from a redistribution of the fruits of AFD’s economic performance (incentive scheme for officers in the general framework and the French overseas territories and a performance bonus for officers recruited locally in foreign countries).

The total compensation of AFD officers also includes a social protection component (healthcare expenses, pension schemes, disability insurance and retirement), which applies to all staff members, including the local staff recruited in agencies. AFD’s pension scheme is subscribed in the form of a group insurance for which the contribution is entirely

covered by the employer. It covers not only active staff members and their dependents, but also retired staff and their dependents.

Consequently, in 2015, all officers recruited in France and locally abroad were covered by social protection schemes. They are additional to existing schemes, where applicable.

The annual minimum gross wage provided for in AFD’s staff regulations is 24% higher than the French legal minimum. (Scope: France) Coverage of pension schemes

AFD officers who come under French legislation benefit from a three-tier pension scheme composed of the compulsory basic scheme, supplementary pension schemes (AGIRC and ARRCO schemes) and an additional pension scheme, set up by AFD for all its officers. Unlike the first two schemes, this system is based on the principle of a capital funded pension and allows officers to build up retirement savings in addition to the compulsory schemes. Full entitlement applies to the savings, even in the event of a departure from AFD prior to the officer’s retirement.

Any officer with a minimum seniority of one year can benefit from full-time or part-time childcare leave.

45

C O R P O R AT E

SOCIAL

RESPONSIBILITY

64

17

Quality of working conditions and staff safety

Following on from the actions undertaken since 2004 on psycho-social risks and the perception that employees have of their working conditions, an in-house perception survey was conducted in 2015 of all employees (general framework and local staff). This survey aims to more clearly identify the expectations and perceptions of teams concerning management and organizational methods in order to ensure that there is well-being in the workplace.

The results of this survey will feed into reflection on the quality of life at work with a view to a negotiation which will be initiated in 2016.

7.1.2 Development of skills and employability (Scope: Group)

AFD Group has adopted a set of human resources management tools to recruit and integrate talented employees both in France and in AFD’s countries of operation, offer motivating career paths, and give everyone, via the training policy, the means to develop their skills and strengthen their employability.

For the Group’s external recruitments, the skills primarily sought remain closely linked to the activities of technical and financial engineering, intellectual production (economics, politics), sectoral expertise (health, education) and the renewal of support and management functions (risk analysis, internal audit, project management,

management control, back office…). This recruitment policy is combined with an integration system which offers a comprehensive training and support program (sponsorship). In addition to a simple familiarization with the working environment, it provides a clear understanding of AFD’s current and future strategic focuses, missions, challenges and procedures.

AFD Group offers diversified career paths – via its functional and geographical professional mobility policy – which permanently develop the skills AFD needs, both in its functional activities and in the field, and meet the professional aspirations of officers.

This is in particular realized on the basis of a provisional management of jobs and skills (GPEC) approach. In 2015, the GPEC approach was extended to all local employees, with the aim of having an overall vision of the professional activities and skills, whatever the employee’s status.

In addition to the deployment of these GPEC tools, the annual appraisal tools have been overhauled in order to take better account of skills in the appraisal of employees.

The career interviews, which support employees in their reflection on their career paths, have continued, with some 570 interviews conducted by the Human Resources Department in 2015.47 In 2016, reflection will be initiated on career management and the mobility policy for local staff, thereby recognizing the increasingly important role played these staff members, particularly local executives, in the operation and development of agencies.

FOCUS Occasional work from home: A flexibility of individual organization for collective efficiency

Occasional work from home was introduced over 10 years ago under an enterprise agreement. It gives employees who are autonomous in organizing their working time the possibility of doing some of their work at home from time to time, subject to the agreement of their

line management. This method of organizing working time is based on a voluntary principle and allows activities or periodic missions that do not require being in AFD’s premises to be conducted at home, for example, to draft reports, notes, or studies.

504 officers benefited from this arrangement in 2015, representing 2,575 days of work. This flexibility given in carrying out their activity is an aspect of the quality of life at work expected by AFD’s employees. According to the in-house perception survey conducted in 2015, 50% of respondents would like to work from home on a regular basis and 30% occasionally.

In 2016, changes in the arrangements for working at home will be central to the reflection on how to improve the quality of life at work and the professional fulfilment of AFD’s employees.

The Law of 5 March 2014 introduces an obligation to conduct a professional interview every 2 years, for all types of contract, fixed-term or permanent.

52

65

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-LA9 G4-DMA

Some

570 interviews conducted by the Human Resources Department in 2015

A payroll effort of

The training policy offers a set of actions which aim to maintain and permanently develop the skills and expertise that AFD Group needs, in a context whereby development issues involve many disciplines and require mobilizing broad and high-level skills: sectoral skills (energy, transport, water and sanitation, biodiversity, agriculture and food security, urban development, education, health…), financial skills, economics, project management, managerial skills…

To meet this objective, 27,72148 hours of training were given in 2015. 78% of officers benefited from at least one training course. 56% of training hours were followed by women and 79% of executive officers received training. The total number of training hours corresponds to a payroll effort of 3.9%, which is to be compared with the French legal obligation of 1.6%.49

3.90%

Inter view

Finally, 2016 should be a year where emphasis will be given to the provisional and forwardlooking component of the GPEC approach.

This training effort also concerns local officers working in agencies: in 2015, 191 local officers benefited from training, for a total of 5,905 training hours.

To implement this training, AFD in particular relies on in-house skills and resources, which allows it to offer a diversified provision tailored to the needs of the institution. Consequently, all the structures contribute to the development and dissemination of skills in-house. 43% of the training hours given correspond to training actions organized in-house. The number of training hours given by in-house trainers demonstrates the considerable investment made by a number of employees and managers to pass on their knowledge and expertise: 3,586 hours were given in 2015, against 2,183 hours in 2014.

The Human Resources Department, with assistance from CEFEB, supports this process by providing in-house training for trainers.

In-house training and experience sharing Marine Karcher, Geographical Coordinator for Asia “My experience as project manager at CEFEB has left me with a liking for training, which I enjoy continuing by giving the training course on the project cycle at AFD. My current position as Geographical Coordinator, at the center of operations, helps me to illustrate this cycle, which is presented from a theoretical perspective in the procedures manual, and make it more lively. This training course is a moment for discussing and sharing with the participants who, each with their

own background, enrich the sessions.

In order to meet increasing demand for training on this subject (about a dozen training sessions a year, which is not always compatible with an operational agenda), we have created a group of Geographical Coordinators from several geographical departments to jointly lead these workshops.

This has made it possible to increase the number of annual sessions, while mobilizing trainers from different backgrounds.

This contributes both to transferring knowledge (towards the participants) and expertise (between trainers).”

Aude Penent, Financial Engineer “I have had the opportunity of giving a number of training courses for about ten years, both in-house and externally (training in microfinance or on our financial model, for officers, international volunteers, newcomers or for courses on development assistance at IEDES, and lectures on the Masters in Finance at Science Po, etc.). This activity,

48 49

C O R P O R AT E

SOCIAL

RESPONSIBILITY

which amounts to almost a hundred hours a year is both extremely interesting and instructive. It is a great challenge to clearly explain concepts which are sometimes complex to a varied audience which, once you have taken it up, becomes a source of great satisfaction. Training strengthens or creates a positive link with collective work. By sharing

knowledge, we also share the challenges and constraints of our activities or, more generally, of development. So, it makes it easier to understand and respect one another and therefore to work together.”

It is the number of accountable training hours, in accordance with French legislation, for training which comes under the 2483 FR declaration.

Figures for the 2483 FR declaration.

66

Breakdown of training hours by age bracket in 2015 (Scope: AFD headquarters and network)

Under 30 Officers Hours

30/39

40/49

50 and over

Total

66

389

282

255

992

2,535

14,132

8,771

6,309

31,747

FOCUS The “MetDev” Development Activities cycle and World seminar: Two training cycles for exchanges to provide a response to issues of in-house cohesion and gain a better understanding of AFD’s mandate

Met Dev in Santo Domingo

The Development Activities cycle was created 10 years ago to support AFD’s transformation and staff renewal.

Its objectives: strengthen the sense of belonging to a community of employees and the corporate culture, gain a better understanding of development issues and challenges, and promote everyone’s role within the Group.

This training cycle is based on three main stages – a theoretical stage concerning the fundamentals of development, a discovery trip in the field, and capitalization and feedback work in front of Group managers – and is intended for new employees. It contributes to bringing people closer to the field whose position does not always allow them to be familiar with this key dimension of AFD’s mandate.

Over the past ten years, 33 MetDev cycles have been organized, gathering over 700 trainees and 60 local executives. 18 countries around the world have hosted the study trip, thereby creating professional and social ties between AFD’s employees over the years.

The World Seminar was restarted in 2015 and every year allows about twenty agency employees from all geographical areas to come to AFD’s headquarters in Paris for a week. It is a time for exchanges of experience and learning and for sharing in terms of the Group’s operational and strategic concerns.

Inter view

World Seminar – Ceyda Cesur (Turkey): “A customized organization!”

I have been working as a project officer at the Istanbul agency for six and a half years in the financial and private sector. I was born in Istanbul and studied here in Paris, at the Sorbonne.

By attending this seminar, I wanted to meet officers from AFD’s other geographical areas. I then wanted to have an overall vision of AFD’s activities: the history, financing, strategies for operations… particularly for the other geographical areas.

67

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Breakdown of training hours by theme in 2015 Scope: AFD and Instituts d’Emission

5,421 Banking/finance 1,459

Office automation

The Fundamentals of Development and Crosscutting Themes

3,799

9,394

Personal Development, Communication and Human Resources

4,003

Sectoral expertise and specialized techniques

968 Management/finance/accounting 1,594 IT 1,896 Legal 2,832 2,391 0

Languages

Management

2,500

5,000

7,500

10,000

Breakdown of officers trained by theme in 2015 for officers over 50

1

Banking

3 Banking/finance 3 14 Office automation 10 8

23

13

2 4

SOCIAL

RESPONSIBILITY

68

75

Sectoral expertise

27

12 6

C O R P O R AT E

DPCRH

FDVT DVPT

190

Management/finance/accounting

1

0

46

10

18

109

IT

Legal

TOTAL

12

Languages

11

Management

20

299

40

60

80

7.1.3 Social dialogue Social dialogue, meaning what characterizes relations in the institution, through regulatory social dialogue, dialogue between the manager and the members of his/her team and participatory approaches, is a pillar of AFD Group’s policy. Indeed, in addition to providing a response in terms of social legislation, it is an essential vehicle for in-house equity, Group cohesion, commitment and skills development for employees.

7.1.4 Dialogue with staff and their representatives Number of staff representatives in 2015

Works Committee

18

Staff representatives

12

Central Works Committee

3

Group Committee

1

The social dialogue in AFD Group is conducted on the basis of four key principles: • A constructive dialogue: the Management and staff representatives work together to support AFD’s developments. Their joint action is characterized by the objective of seeking the collective interest; • The respect of everyone’s prerogatives: the roles of the Management and representatives are complementary, without them being confused; • The professionalism of negotiations: AFD ensures that staff representatives are given the means to fully exercise their mandate (transparency of the information provided, training or external support in the event of complex negotiations…); • Anticipation: through social dialogue, AFD seeks to find solutions to medium-term social issues, particularly in relation to societal changes.

Consequently, major changes planned at AFD are subject to negotiation procedures with trade union organizations and information and/or consultation procedures with staff representative bodies. A change in the organization leading to significant consequences on employment, training and working conditions, or on the general operation of the institution, can only be made after a minimum period of one month dedicated to informing and (or) consulting Staff Representative Bodies (IRP).

Organization of staff representative bodies G4-26

Staff representation is organized as follows: • A Works Committee at headquarters and four local Works Committees for the overseas departments (DOM) (which have over 50 employees) give a collective voice to employees for any questions relating to economic and financial developments in the institution, the organization and conditions of work, vocational training and social protection. They also manage the social and cultural activities organized in the institution; • A Central Works Committee meeting is organized twice a year with the representatives of the five Works Committees and addresses the economic and financial projects concerning all employees covered

by French legislation; • A Group Committee meeting is organized once a year with all the staff representatives of AFD and its subsidiaries; • The committees for Health, Safety and Working Conditions at headquarters and in the DOM agencies work on staff protection and safety and on improving working conditions; • Staff representatives (headquarters and agencies) collect and present to the employer any individual and collective complaints made by employees about the application of the law, the statutes and joint appeals boards.

Elections for the Works Committee/staff representatives were held in April 2014.

A policy for the representation of local staff in foreign countries came into effect in 2015.

Indeed, in order to make up for the lack of formal staff representation in a number of agencies, in particular due to a lack of local legislation in this field, the appointment of a “social dialogue contact person” has been introduced for all agencies in this situation with over 6 people. This initiative has increased the representation rate of local staff to 92%, against 56% previously.

Furthermore, compliance with social regulations and the organization of a dialogue in the agency are subject to a periodic control during inspections of the agency.

Collective Agreements

The employment contracts of AFD officers under French law are governed by specific staff statutes for each establishment (1 statute for the headquarters and 4 statutes for the DOM).

The staff recruited in agencies abroad have an employment contract governed by a staff statute and a possible association with a collective agreement in the country in question (collective agreements of banks and financial institutions).

69

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-11 G4-DMA

GRI G4-LA4

Review of Collective Agreements

GRI G4-11

Signing dates and purpose of the agreements signed during the year 5 agreements in 2014

10/07/2014

Memorandum of Understanding on the scheme for mortgage loans allocated to AFD staff*

11/07/2014

Amendment to the Memorandum of Understanding on the buyback of mortgage loans allocated to AFD staff*

11/07/2014

Amendment to the Company Savings Plan (contributions)*

30/09/2014

Incentive Agreement*

30/09/2014

Agreement on the Employment of Persons with Disabilities*

Disability Agreement: Review and outlook

The employment of persons with disabilities is an important issue for the Corporate Social Responsibility of AFD, which has been implementing a policy for several years for their integration, formalized by an agreement since 2007. In 2015, a new disability agreement was signed for 2016-2018, underscoring the objective of continuously developing more direct and indirect employment for persons with disabilities.

In addition to these commitments, awarenessraising and communication actions are regularly organized by AFD’s Disability mission. Between 2013 and 2015, 750 employees, including 80 managers, were sensitized to the issue of disability in companies.

Review of the first Disability Agreement for 2013-201550

14

8

new employees

permanent contracts (target: 4)

4

13

797 797employees, including 125 managers, sensitized during the annual campaigns

sandwich course contracts (target: 2)

2

people from the protected and adapted sector employed for services of between 3 months and 2 years

interns (target: 2)

“Disability Contact” employees

Results approved by regional administrative services. *This indicator was controlled by KPMG during the Management Report audit.

50

C O R P O R AT E

SOCIAL

RESPONSIBILITY

70

24

Rate of women managers (excluding heads of “unit”):

35%

Number of information and communication supports produced in 2015 Echo des Continents

4

Gaia news

750 Instruction and information notes

100

Agreement on professional gender equality

Following the agreement signed in 2014 to promote professional gender equality, a revision amendment was signed in June 2015 and contains a set of quantified objectives which aim to promote the professional development of women throughout their career and ensure that there is a balanced representation of women and men at all levels of the institution.

Ambitious objectives have been set for 31 December 2016: • Rate of executive women: 50% (achieved at the end of 2015: 48.2%); • Rate of women managers (excluding heads of “unit”): 35% (achieved at the end of 2015: 31%); • Rate of women in the network: 33% (achieved at the end of 2015: 29.6%); • Rate of advancement and promotion of men and women proportional to the composition rate for each level of employment.

Organization of the managerial dialogue at AFD

Dialogue at AFD is organized on the basis of the dissemination of information: information notes, in-house magazine “Echo des Continents”, news disseminated very regularly on the Intranet Gaia.

It is also organized in the context of meetings between the Chief Executive Officer and officers, which allow AFD’s activity, strategy and current important issues to be reviewed. In 2015, the Chief Executive Officer held four meetings with teams from AFD headquarters.

The field visits made by the Chief Executive Officer and directors provide opportunities for exchanges and dialogue with local staff.

FOCUS Network week: A highlight in the life of AFD Every year, Network Week is held in the first week in January. It brings together all the agency directors and Group representatives in the field to exchange and dialogue with the Chief Executive Officer, supervisory authorities and development experts about AFD’s strategic issues and the main development issues (climate, countries in crisis, migration, social protection, financing for the private sector, etc.).

This Network Week also sets aside time for a managerial dialogue, the management convention, which allows the Group’s community of managers to discuss topics such as the mobilization and commitment of employees, or professional fulfilment and the performance of teams.

Finally, this week provides an important opportunity to maintain links between the headquarters and its agencies, inform each other about developments, and share operational concerns.

Throughout the week, there are a series of conferences, thematic sequences, working meetings, bilateral exchanges…

Human Resources Department (DRH) meets teams in the field The objective of the missions that DRH and its teams regularly conduct in the field is to meet staff, exchange, discuss and gain a better understanding of the activities conducted and the professional context of the agencies.

These visits are also an opportunity to hold discussions with staff representatives on specific issues concerning human resources management in the agencies. For example, in March 2015, the Noumea agency received a mission by the Human Resources Director, which mainly aimed to start negotiations on the establishment agreement for the AFD and IEOM agencies in Noumea. The work conducted

by DRH, the management of the two agencies and trade union organizations led to the signing of a method agreement, which sets the framework for the future negotiation.

71

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Participatory approaches

The commitment of employees is a guarantee of their success and professional and personal

fulfilment. This commitment is also supported by collective approaches which aim to promote initiatives and facilitate the development and implementation of new ideas.

FOCUS AFD 2025: “What possible developments or breaks could AFD experience in 2025-2030?”

Extensive collective reflection was launched in the summer of 2014 on the possible futures of AFD post-2025.

The strategic forward-looking approach, AFD 2025, seeks to explore the various possible, probable, acceptable and desirable futures by analyzing the dominant trends, but also by detecting weak signals or imagining breaks.

The “AFD 2025” forward-looking approach was launched in 2014 and continued throughout 2015. This work is fed into by exchanges with a large number of AFD employees in the context of over twenty working groups or during sessions to present the reflection. In addition to group work, a survey was launched in June 2015 via which 450 employees expressed their vision of the world and of AFD in 2025.

This reflection is forward-looking, non-institutional, and open to all on a volunteer basis. It has brought out new ideas, defined possible scenarios for the future and identified the challenges and opportunities for AFD.

7.2

Reducing the environmental footprint in in-house operation The “in-house environmental responsibility” action plan is based on four areas: 1/ EVALUATE: Conduct annual Bilans Carbone®

(carbon footprint assessments) of AFD’s inhouse operation, completed with periodic environmental diagnostics and a regular monitoring of various impact indicators: energy and paper consumption, waste production…;

2/ TAKE ACTION: Strengthen AFD’s priority

action plan to reduce its ecological footprint, with a focus on the following themes: responsible procurement, energy efficiency and renewable energies, travel, waste management;

3/ OFFSET: Voluntarily offset the greenhouse

gas emissions generated by AFD’s activity by financing environmental projects in developing countries (purchase of carbon credits);

4/ RAISE AWARENESS: Communicate to AFD

officers in order to sensitize them to sustainable development, both as professionals and citizens.

In order to address the environmental issues related to AFD’s operations, actions to sensitize and promote initiatives are showcased via a

dedicated Intranet website, in-house news releases and press articles, exhibitions, conferences, and the creation of events during major international events (“Sustainable Development Week”, “European Week for Waste Reduction”, etc.).

7.2.1 Issue of professional travel Professional travel by officers and consultant missions is AFD Group’s main item for greenhouse gas emissions and accounted for 51.6%* of total emissions at headquarters in 2015. It is a source of carbon that is difficult to reduce in view of AFD’s activity, as the field missions conducted by AFD are essential for the appraisal and monitoring of projects on the spot and for the 75 agencies established all over the world.

AFD has set out to effectively contain the emissions related to travel by implementing solutions to reduce them, such as videoconferencing and working from home.

This indicator was controlled by KPMG during the Management Report audit.

*

C O R P O R AT E

SOCIAL

RESPONSIBILITY

72

Inter view

Guillaume de Saint-Phalle, Head of the Knowledge Management and Dissemination Division

For responsible publishing For the publication of our studies and research, we are working on having a responsible procurement policy, especially for printing. In addition to taking an environmental approach with FSC-certified printers, we decided to reserve one of our

bid invitations for a batch of printing for an ESAT (Center and Service for Support through Employment). In practical terms, this means that for this batch of printing, only ESATs were allowed to submit a bid, in accordance with the regulations in force. We are currently printing our first copies with the Handiprint workshop, which won the bid invitation. All

the publications from the Macrodev, Ex Post and A Question of Development collections which are not produced in-house are printed

by Handiprint. In this way, AFD promotes the indirect employment of persons with disabilities who work in this ESAT.

FOCUS In-house environmental actions A system to manage paper waste, bottles and plastic cups was set up in 2015. This has led to the installation of paper collection points, which are located near photocopiers and available at the Barthes and Mistral sites. Individual collectors have been distributed to each employee in order to support this approach. “Shred-it” manages the entire collection and recycling service in France.

Voluntary collection points for plastic cups and plastic bottles are also available near the water fountains and drinks machines.

AFD is engaged in an approach for the responsible management of its publications. There has been a marked reduction in the distribution of paper publication, with a 70% decrease in 2015 compared to the previous year. In 2015, one of the contracts for printing publications was entrusted exclusively to a Center and Service for Support through Employment (ESAT), with the aim of promoting the employment of disabled people. The two external printers selected also benefit from an environmental certification (FSC or PEFC).

For the first time, a “100% organic” meal was proposed to AFD officers in February 2016, at the initiative of our mass catering partner. On this occasion, all the dishes on the menu were made with products from organic farming and were, where possible, local.

Operations to raise awareness of in-house environmental responsibility are conducted in the Group every year: European Week for Waste Reduction in November, Sustainable Development Week in early June…

7.2.2 Carbon offset at AFD At the same time as reducing carbon emissions, the voluntary process towards carbon neutrality is part of AFD’s environmental approach.

In 2015, the acquisition of carbon credits fully offset AFD Group’s greenhouse gas emissions for 2015, i.e. 28,756 teq CO2*. Two projects were consequently financed: one for drinking water purification in Kenya and the other for the fight against deforestation in Peru.

FOCUS Good environmental practices in AFD’s offices abroad The entire network of AFD Group agencies is engaged in a process to reduce its carbon footprint. Some examples…

Waste management processes have been set up: the Mexico City agency recycles and sorts its waste, the Colombo agency recycles water bottles, the Brazzaville agency uses cloth rather than paper wipes for hands. In Hanoi, the focus is on increasing the lifespan of equipment, in Tunis the paper purchased is certified and recycled, which is also the case for IT equipment.

Steps are taken to make full use of local resources: the furniture in the Brazzaville agency is made with local raw materials. The Colombo agency, for its part, purchases local supplies.

Finally, procedures for responsible mobility have been implemented in the Hanoi and Colombo agencies, for example.

This indicator was controlled by KPMG during the Management Report audit.

*

73

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI EN30 G4-DMA

GRI G4-18 GRI G4-19 GRI G4-20 GRI G4-21 GRI G4-22 GRI G4-23

8

Methodological note

GRI G4-24 GRI G4-25 GRI G4-26 GRI G4-27 GRI G4-28 GRI G4-29 GRI G4-30 GRI G4-31 GRI G4-32 GRI G4-33

C O R P O R AT E

SOCIAL

RESPONSIBILITY

74

8.1

GRI G4-18

Determination of the content of reporting

G4-19 G4-20 G4-21

AFD Group’s Corporate Social Responsibility Report firstly aims to meet the requirement of accountability towards internal and external stakeholders, in particular by enhancing the clarity and accessibility of information.

In this 2015 Corporate Social Responsibility Report, the most relevant information for AFD Group’s activity, defined by a materiality analysis, has been taken into account. The aim of this analysis is to identify and prioritize the main Corporate Social Responsibility issues of a given entity, depending on its specific activities and objectives and the expectations identified of its external and internal stakeholders, by combining sources of information.

This process, identifies and prioritizes the main Corporate Social Responsibility issues of the organization. The interest and added value of this type of exercise lies in the capacity to provide a consensual view of the priority issues in order to select the most relevant qualitative information and indicators for the Corporate Social Responsibility Report.

The issues are predefined by the Global Reporting Initiative (GRI-G4 “Aspects”) and its sectoral NGO and Financial Sector supplements. They are structured according to the following categories: Economic (7 issues), Environment (12), Labor Practices (8), Human Rights (10), Society (7) and Product Responsibility (14), i.e. a total of 58 categories.

The materiality analysis of AFD Group was conducted by combining internal sources of information (employees, managers…) and external sources (press reviews, external studies and reports, surveys, interviews…). It is consistent with the CSR commitments and Action Plan.

The methodology adopted to identify material issues was as follows: • The analysis was firstly based on issues predefined by the GRI following the approach proposed by this reference system, which led to the identification of 58 CSR issues falling within the scope of AFD’s activity; • Secondly, an initial pre-positioning of the material issues deemed the most significant for AFD was conducted on the basis of a documentary analysis: • A set of documents (120) representative of AFD Group’s strategy and the expectations of external stakeholders identified over the past five years was analyzed by the independent consulting firm Deloitte, which openly provided its analysis methodology and shared the results

with AFD. It involves in-house strategy papers, action and activity plans, surveys, reports on internal and external meetings and interviews, communication supports, press articles, NGO reports and reports from non-financial rating agencies; • 29 documents were subject to a quantitative analysis of the frequency of occurrence and the importance given to Corporate Social Responsibility issues. The other documents were subject to a qualitative analysis of the content addressed; • A benchmark of material issues identified by comparable institutions allowed the practices of peers and the practices of the sector to be taken into account; • Qualitative interviews were conducted with members of Senior Management in order to gather their perception of the main Corporate Social Responsibility issues for AFD in general, and in their scope of responsibility in particular; • Adjustments were made throughout the process with GRI terminology being adapted to AFD’s activity; • The procedures for updating and submitting results to external stakeholders are in the process of being defined.

Following these stages, a list of 16 material issues was defined and validated by a decision of the Chief Executive Officer.

These issues are as follows: • Economic performance; • Transparency on the financing allocated; • Dialogue with local stakeholders; • Management of the grievances related to the impact of our activities; • Coordination with the other development actors; • Impact of our activities on development; • Impact of our activities on climate change/ biodiversity/gender equality; • Analysis of environmental and social risks and monitoring during project implementation; • Human rights; • Capacity building; • Financial security, fight against fraud and corruption and AML/CFT; • Ethics; • Development of skills and employability (staff at headquarters and local staff); • Transparency over social information; • Social relations (including social dialogue and the manager/employee dialogue processes); • Impacts of travel on climate change.

AFD Group sets its report within the technical frameworks of the Global Reporting Initiative (GRI G4), SO 26000 and Global Compact.

75

C O R P O R AT E

SOCIAL

RESPONSIBILITY

G4-24 G4-25 G4-27 G4-28

GRI G4-17

8.2

GRI G4-18

Scope and period of reporting

G4-20 G4-21 G4-23 G4-29

The scope of the reporting comprises the parent company AFD and its majority-owned subsidiary PROPARCO. These structures account for 99% of the total balance sheet and consolidated net banking income. In the event where an indicator does not cover the entire scope of the reporting, the scope presented is specified and the reason for which the publication is partial is explained.

G4-30

The reporting is conducted once a year. AFD Group’s first Corporate Social Responsibility Report was published in 2012 and concerned

2011. The 2015 report covers the period from 1 January to 31 December 2015. In cases where the data have not yet been calculated for 2015, the qualitative data for 2014 are given. This report also includes some highlights (qualitative data) from early 2016.

No significant change has been identified compared to the previous period concerning the scopes, period and methodology of the reporting.

8.3

Methodology to conduct the reporting The qualitative and quantitative data in this report have been collected and consolidated in accordance with the Group’s current administrative management procedures. The data provided have been established based on exchanges with the reference persons in their departments and various documents (reports, evaluations, etc.). Monitoring dashboards are used to trace and consolidate the data supplied.

In 2015, an examination of the information on Corporate Social Responsibility in the 2014 Management Report was conducted by one of

our auditors designated as an independent thirdparty body, the consulting firm KPMG S.A., in accordance with the rules of Article 225 of the Grenelle Environment Act. The indicators verified in this context are marked with a “*” in the text.

The independent third-party body expressed a conclusion of moderate assurance, based on the fact that all the significant aspects of the Corporate Social Responsibility information, taken as a whole, are presented in a sincere manner in accordance with the Reference Framework. The report by the independent third-party body is available on AFD’s website.

8.4

GRI G4-32

Reporting supports For more clarity, the content of the 2015 Corporate Social Responsibility report is based on three supports: • This document, “AFD Group 2015 Corporate Social Responsibility Report”, an exhaustive technical document in line with the GRI framework; • A document, “Corporate Social Responsibility – 2015 Commitments and Results”, a summary communication support; • The section “AFD’s Corporate Social Responsibility” on AFD’s website, which presents, in addition to the two reports mentioned above, the specific policy C O R P O R AT E

SOCIAL

RESPONSIBILITY

76

documents (exclusion list, financial security, environmental and social risk management, etc.).

The Corporate Social Responsibility Report may be read as a complement to the Annual Report, which is mainly intended for the general public, and the Registration Document, which is intended for financial market actors.

All the non-financial data relating to social matters required by French law is given in the latter (Law on “New Economic Regulations”, amended in 2010, and “Grenelle 2” Act).

8.5

Index of GRI G4 content The index of the content of the GRI G4 is available on AFD’s website: http://www.afd.fr/ webdav/site/afd/shared/RSE/Index%20GRI.pdf

This Corporate Social Responsibility report has also been submitted to the GRI “Report Services” for verification.

8.6

Verification of the reporting Internal audit

External audit

The Corporate Social Responsibility process is subject to validations at various levels of the organization to ensure the data is reliable:

The external auditors are appointed by the Chief Executive Officer of AFD for one year. They are accredited by Cofrac (French Accreditation Committee) as independent third parties. For 2015, AFD decided to entrust this external verification mission to the Audit firm KPMG.

• At the level of “direct contributors” (project managers, directors of geographical areas, etc.): control of the consistency and completeness of the data entered in the tools or transferred to the reference person; • At the level of the “reference persons”: the reference person controls the data, which he/ she consolidates via consistency controls and random controls prior to transferring them to the CSR team; • At the level of the “CSR team”: the data received for consolidation are subject to consistency controls and a joint analysis with the reference persons to identify needs and possible areas of improvement management.

The data sources, as well as the data measurement, calculation and consolidation documents, must be verifiable by the external auditors. The corresponding documents and supporting documents (invoices, meter readings, calculation files, time sheets for training, etc.) must be kept and made available for a minimum of 3 years. The archived data must also be accessible to the auditors. The contributors are consequently made aware of the importance of this traceability.

77

C O R P O R AT E

SOCIAL

RESPONSIBILITY

GRI G4-33 GRI G4-32

The calculation, measurement and analysis methods used comply with the appropriate national or international standards, when they exist. If they do not exist, documentation concerning the methods used must be retained and kept available.

GRI G4-31

The audit of the Corporate Social Responsibility Report concerns the presence of information

with regard to the criteria required by the GRI content index. In a first stage, AFD decided to answer the GRI-G4 “core” option.

According to the assessment methodology recommended in the GRI G4 Implementation Manual, the self-assessment of the Corporate Social Responsibility reporting of the Group for 2015 leads to the “core” level of implementation.

8.7

Person to contact for further information Louise de La Forest delaforestl@afd.fr tel: +33. (0) 1.53.44.47.36 5 Rue Roland Barthes 75598 PARIS CEDEX 12

8.8

Reporting on the environmental and social risks of projects The classification of the environmental and social risk is systematically validated for all projects during Identification Committee meetings, on the basis of a classification tool mentioned in the Operational Procedures Manual. The units in charge of environmental and social risk management keep an environmental and social risk classification table up to date for the projects identified. This table is compared to the tables for the commitment approvals allocated

during the year by the decision-making bodies of AFD Group, which come from AFD Group’s information system (SIOP), in order to produce the statistics given in the Corporate Social Responsibility Report.

8.9

Reporting on the impacts of financing in the field AFD has adopted a number of tools and methods to strengthen the measurement of the results of its operations. They include aggregatable indicators, which are specifically oriented with a twofold purpose of institutional communication and to contribute to the analysis of AFD’s strategic positioning. PROPARCO has adopted a tool developed by its German counterpart, DEG.51 This tool, which is common

C O R P O R AT E

SOCIAL

RESPONSIBILITY

78

to a number of European development finance institutions, called GPR52 (Geschäftspolitisches Projectrating©), has been adjusted to the needs and realities of PROPARCO. The effective development results indicators for AFD Group operations were validated during the CICID meeting and confirmed in the LOPDSI Law. They were implemented back in 2013 and

FIND OUT MORE www.afd.fr/lang/ en/home

51

www.deginvest.de

Geschäftspolitischen Projektrating: adaptation of the mechanism developed by Germany’s DEG.

52

53

European Development Finance Institutions.

the publication of the data for 2013 in the 2014 Annual Report constituted a first structural stage in terms of accountability. Since 2015, AFD has had historical data for a three-year period (2012, 2013, 2014) and will continue its approach to analyze and communicate on these results.

In 2014, PROPARCO finalized the review of its results measurement tool and has developed and harmonized its indicators with AFD and the other EDFI53 member donors. PROPARCO has been measuring the expected outcomes of its operations since 2008. The analysis of the expected outcomes will be finalized in 2015 for

the projects in the portfolio committed in 20082009 and 2010. It is also planned to produce more detailed analyses of the outcomes and impacts on development and thereby complete the communication and accountability on the subject. Furthermore, in 2016, a study will be conducted on the topic of employment in infrastructure.

FOCUS Aggregatable Indicators (AI) – the main principles These aggregatable indicators were introduced with the aim of quantifying and consolidating, in a summarized form, the outcomes of AFD’s operations in foreign countries (since 1 January 2004), and in the French overseas territories (since 1 January 2005).

These indicators, which are monitored every year, have been subject to an overall review of eight years of use. The diagnostic was completed in March 2013, and the indicators were subject to a revision which takes into account the lessons learned from this study.

The “aggregatable” indicators proposed are quantified indicators which include indicators on achievements and outcomes. They are consequently positioned between monitoring the means and the impacts themselves: • Means: Financial commitments; • Achievements: Number of schools built, number of health structures built…; • Outcomes: Number of children entering school, number of beneficiaries of health structures…; • Impacts: Improvement in the literacy rate, reduction in the mortality rate…

The aggregatable indicators (AI) are not, strictly speaking, impact indicators. They measure the achievements and outcomes made possible by the initial means mobilized thanks to external financing.

Consequently, the achievements and outcomes are the most tangible instrument that can be monitored during the cycle of operations.

To take this further, impact assessments estimate the effect which can be directly attributed to an operation, by comparing situations before and after the operation between the beneficiary group and a comparable control group.

The impact indicators do not allow the consequences of Official Development Assistance action to be rapidly identified. These impact indicators (“child mortality”, “literacy rate”…) generally have a high level of inertia, are statistical measurements of highly complex phenomena, on which ODA generally only has a partial impact, and very often depend on the complex major macroeconomic and sociodemographic trends. In addition, the time factor plays an important role in them.

The contribution rationale consists in considering that AFD’s contribution participates in achieving the overall outcome of the funded project or program. This means that in the case of a cofinanced project, AFD contributes to all the project outcomes and does not only attribute certain outcomes to itself, which would only be attributable to the components it finances, or part of the overall outcomes in proportion to its financing.

In 2006, a decision was made over the question of quantifying the AI in proportion to the share of AFD’s financing: the quantification is carried out for the entire project/program, and the compilation of the Aggregatable Indicators (AI) includes AFD’s “effort ratio”, i.e. AFD’s share in the total financing. This choice stems from the combination of two arguments: 1/ The approach taken is that of the contribution to and not the

attribution of development outcomes, in line with the Paris Declaration;

2/ The monitoring of implementation and final evaluation concern

the entire investment financed.

AFD has a guide which aims to provide a methodology on how to use and estimate Aggregatable Indicators (AI) for its operations in foreign countries. It gives an overview of all the questions the user will have to address when he is dealing with the AI. It is also a support for reading and understanding the development outcomes estimated by AFD thanks to the AI. • User Guide for Aggregatable Indicators in Foreign Countries (2007): www.afd.fr/webdav/site/afd/shared/ELEMENTS_COMMUNS/ AFD/Efficacite%20Aide/Guide_d%27utilisation_des_indicateurs_ agregeablesEE.pdf; • User Guide for Aggregatable Indicators in the French Overseas Territories (2007): www.afd.fr/webdav/site/afd/ shared/ELEMENTS_COMMUNS/AFD/Efficacite%20Aide/ Guide_d%27utilisation_des_indicateurs_agregeablesOM.pdf.

79

C O R P O R AT E

SOCIAL

RESPONSIBILITY

FOCUS PROPARCO’s tool to measure results and impacts In addition to rating the risks of the counterparty, the profitability of the operation, the alignment with PROPARCO’s strategic orientations and its advisory role, the GPR tool assesses the impacts that the various types of funded projects have on development, i.e., in particular, the impacts of operations on public revenues, employment, training, the transfer of know-how, governance, environmental and social performance, the social impacts (social protection, non-discrimination, gender) and environmental impacts (green projects, ecological footprint, certification efforts…), as well as the local accessibility of products and services.

8.10

Reporting on in-house social responsibility AFD’s social reporting has been developed using the Human Resources Information System, comprising a commercial software package (Pleiades), which is used to manage all the headquarters and expatriated staff (administrative management, career management…), and is the source of all the Group’s social data concerning staff.

The reporting on HR data for locally recruited officers in some 72 agencies around the world is mainly based on data collected monthly in the agencies, by headquarters, in the context of HR Group management (career and recruitment management, administrative management and

C O R P O R AT E

SOCIAL

RESPONSIBILITY

80

compensation, budget management control).

It also allows this population, who are also covered by AFD’s social protection mechanisms and the pension scheme subscribed in the form of a group insurance and entirely covered by the employer, to be updated in the Pleiades.

Scope of “social” indicators: • “Group”: AFD, PROPARCO and Instituts d’Emission headquarters (100% of Group headcount); • “France”: all employees under French law at the AFD, PROPARCO and Instituts d’Emission headquarters and agencies, excluding local staff in the agencies.

8.11

Reporting on in-house environmental responsibility

The data collected cover the period from 1 January of year N to 31 December of year N. Reporting on this data is conducted annually and covers the scopes 1, 2 and 3.

The indicators relating to the number of officers have been calculated on an average full-time equivalent (FTE) basis, excluding service providers.

Two types of scope of study are taken into account to make the environmental review:

Scope of “environment” indicators: • “Group”: AFD, PROPARCO, and Instituts d’Emission headquarters (100% of Group headcount); • “AFD”: AFD headquarters and agencies (90% of Group headcount); • “Headquarters”: AFD and PROPARCO headquarters (58% of Group headcount); • “AFD headquarters”: only AFD’s headquarters, including CEFEB and excluding PROPARCO (50% of Group headcount); • “AFD Paris headquarters”: AFD headquarters, excluding CEFEB: Barthes and Mistral buildings (48.5% of Group headcount); • “France”: all employees under French law, headquarters and agencies, AFD, PROPARCO and Instituts d’Emission, excluding local agency staff.

• An “organizational scope” reflecting the structural and legal organization of the institution (inventory of the sites and entities concerned); • An “operational scope”, which defines the types of sources to be taken into account on a given site. To represent AFD’s operations and activities, the decision was made to apply the operational control approach. Consequently, the entities to be included are all the entities where AFD has the power to modify the operational policies.

A Bilan Carbone® (carbon footprint assessment) is an estimate, not an exact calculation of greenhouse gas emissions. The carbon equivalent of the gases identified is an approximation. The level of uncertainty varies depending on whether or not the data (for example, waste, freight) is hypothetical. The result of the Bilan Carbone® of the headquarters is known with an uncertainty of around 13%.

To be eligible for the “Bilan Carbone ®” certification, the assessment of AFD’s GHG emissions takes into account all the sources of emissions (direct or indirect).

The environmental reporting of the network of agencies abroad is mainly based on a questionnaire, which is available on an online platform. The agency’s Bilan Carbone® reference person, who has previously been identified and authorized to feed into the questionnaire, is responsible for collecting data. Following the collection phase, the data are aggregated in order to develop a Network Bilan Carbone®.

It is sometimes difficult to obtain certain data due to the economic or structural context of agencies (complicated geopolitical framework, difficulties to access information, joint property ownership…). There is a 71% response rate.

Information system The data provided are established on the basis of exchanges with the resource persons from the departments and local agencies concerned, and using various documents – contracts, project sheets, reports, invoice statements and management systems. Monitoring dashboards for environmental indicators, which are validated during committee meetings, are also reporting tools to trace the data transferred and ensure it is reliable.

The data collection process requires the contributors to collect and consolidate, where necessary, the activity data according to the defined scope. They ensure that these data are consistent.

Various tools support the preparation of the assessment of the GHG emissions of AFD’s headquarters (collection file, consolidation tool and the Bilan Carbone® spreadsheet of the Bilan Carbone Association (ABC)). A management and support tool is made available to contributors in the network: an online platform allows the data from the contributors of each agency to be collected and consolidated.

81

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Comments by type of data Professional travel (Scope of data: “Headquarters”)

Professional travel includes travel by train and plane.

It is mainly managed by the service provider Amex, which provides an annual extraction from its system including the number of kilometers travelled by officers from the headquarters of AFD (Mistral and Barthes) and PROPARCO and

Additional reporting is conducted in order to report on the travel by CEFEB officers and the missions entrusted to consultants.

8.12

• Crosscutting Intervention Framework “Biodiversity” 2013-2016: http://www.afd. fr/webdav/shared/L_AFD/L_AFD_s_engage/ documents/CIT%20BIODIVERSITE%203%20 juin%202013.pdf

Appendix • CSR Action Plan 2014-2016: http://www. afd.fr/webdav/shared/RSE/AFD-Plan%20 d'actions-RSO-GB-BAT2.pdf • Ethics Charter: http://www.afd.fr/webdav/ site/afd/shared/ELEMENTS_COMMUNS/pdf/ AFD-Professional%20Ethics-Charter-Internet.pdf • Transparency Policy: http://www.afd.fr/ jahia/webdav/site/afd/shared/PORTAILS/ PUBLICATIONS/RSE/pdf/2-Politique%20 transparence%20-%20version%20internet.pdf • E n v i r o n m e n t a l a n d s o c i a l r i s k management of operations financed by AFD Group: http://www.afd.fr/op/preview/ lang/en/home/AFD/developpement-durable/ DD-et-operations/maitrise-risques • General policy on combating corruption, fraud, anti-competitive practices and AML/FT: http://www.afd.fr/webdav/ shared/L_AFD/L_AFD_s_engage/documents/ Politique_AFD_lutte_contre_corruption_ VA.pdf • Sectoral Intervention Framework “Energy” 2012 – 2016: http://www.afd.fr/webdav/ shared/L_AFD/L_AFD_s_engage/documents/ CIS%20Energie%20AFD%209%20 octobre%202012.pdf • Crosscutting Intervention Framework “Gender” 2014-2017: http://www.afd.fr/ webdav/shared/partenaires/CIT-genre.pdf • Sectoral Intervention Framework “Food security in Sub-Saharan Africa” 20132016: http://www.afd.fr/webdav/shared/L_ AFD/L_AFD_s_engage/documents/CISsecurite-alimentaire.pdf

C O R P O R AT E

SOCIAL

RESPONSIBILITY

82

by type of transport (plane and train) and the class in which the employee travelled. The Amex reporting can include data on travel by consultants (excluding officer staff). This travel is estimated at less then 5% of the data provided by Amex. This methodology has been refined compared to 2013.

• Crosscutting Intervention Framework “Climate-Development” 2012-2016: http://www.afd.fr/webdav/site/afd/ shared/L_AFD/L_AFD_s_engage/ documents/CIT%20climat%20-%20note%20 g%C3%A9n%C3%A9rale%20-%20121011. pdf • Carbon Footprint Headquarters and Network, 2013-2015: http://www.afd. fr/webdav/site/afd/shared/RSE/PDF/ Groupe%20AFD_Bilan%20Carbone_2015.pdf • AFD’s Code of Conduct for Buyers: http://www.afd.fr/webdav/shared/L_AFD/ Opportunites_d_affaires/Code_de%20_ conduite_Achat.pdf • Annual Report, 2015: http://www.afd.fr/ lang/en/home/publications/Publicationsinstitutionnelles/rapports-annuels • Registration Document, 2015: http:// www.afd.fr/lang/en/home/publications/ Publications-institutionnelles/documentsreference • Registration Document, 2015: http:// www.afd.fr/webdav/site/afd/shared/L_ AFD/L_AFD_s_engage/documents/ CIT%20climat%20-%20note%20 g%C3%A9n%C3%A9rale%20-%20121011. pdf

Photo credits p.2 Manfred Meiners/p.5 Eric Thauvin/p.7 Eve Rieublanc/p.12 Jean-Claude Galandrin/p.14 Thierry Trouillet/p.17 Etienne Woitellier/P. 21 Eric Thauvin/p.22 Eric Beugnot/p.27 Oriane Zerah/p.28 Vincent Joguet/p.31 Benjamin Petit/p.32 Cyril Ison/p.37 James Keogh/p.39 Guillaume Le Bris/p.39 Carole Loison/p.40 Carole Loison/p.46 Oriane Zerah/p.46 Aurélie Chevrillon/p.47 Eric Beugnot/p.49 Eric Bureau/p.51 Oriane Zerah/p.54 Marianne Mensah/p.55 Eric Beugnot/p.56 Manfred Meiners/p.57 Manfred Meiners/p.57 Guillaume Josse/p.58 Oriane Zerah/p.59 Cyril Ison/p.60 Oriane Zerah/p.62 Cyril Ison/p.67 Eric Bureau/p.74 Paul Kabre/p.80 Etienne Woitellier Coordination Anne-Françoise Dayon (AFD), Louise De la Forest (AFD) Editorial staff Anne-Françoise Dayon (AFD), Louise De la Forest (AFD), Lili Steffan (AFD) Graphic design Agence PatteBlanche – www.patte-blanche.com Translation Warren O’Connell

83

C O R P O R AT E

SOCIAL

RESPONSIBILITY

Tel.: +33 1 53 44 31 31 Fax: +33 1 44 87 99 39 5 rue Roland Barthes 75598 Paris Cedex 12 France www.afd.fr

C O R P O R AT E

SOCIAL

RESPONSIBILITY

This product is printed on paper from sustainably managed forests and controlled sources.

Agence Française de Développement