CSR Report 2011

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AFD Group Corporate Responsibility

2011 report

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How to read through this report

Interactive table of contents

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Contents

Letter from the AFD Group Chief Executive

Part 1. AFD Group’s Environmental, Social and

Governance Reporting

Part 2. Our Approach to Environmental, Social and

Governance Responsibility

Foreword

Environmental, Social and Governance Responsibility

Policy Goals

Operating Risk Management

Internal Organization for Environmental, Social and

Governance Responsibility

Part 3. Our Internal Governance, Corporate Ethics

and Anti-Fraud and Corruption Controls

Part 4. Our Stakeholders

Stakeholder descriptions and interactions

Stakeholder Engagement

Improvement Plan for 2012-2016

Partie 5. Our Funding Operations

Corporate Responsibility in External Operations

AFD Group’s Climate Strategy: An Exemplary Approach

Partie 6. Our Work Force

Our Commitment to Our People

Avenues to Improvement

2011 Human Resources Outcomes


Partie 7. Environmental Responsibility

in Our Internal Operations

Managing AFD Group’s Environmental Footprint



Partie 8. Our Method

Inspired by the Global Reporting Initiative Framework

Report Scope and Boundaries

Reporting Period

GRI Indicator Index

Abbreviations

4 75

87

104

5

9

25

29

50

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The AFD Group strategy for 2012-2016 sets more strin-

gent requirements for our organization – requirements that

push it to be exemplary in all its work. We must be as

demanding of ourselves as we are of our aid beneficiaries,

particularly with regard to the environmental, social and

governance responsibility issues so central to our activity.

The development of our new strategy reaffirmed our com-

mitment to an ambitious corporate responsibility policy,

one that we will soon submit for third-party validation.

Environmental, social and governance issues remain

essential concerns when we consider development aid

operations for funding. For example, our Group has a cli-

mate-change strategy that stipulates that 50% of our fun-

ding must combat atmospheric greenhouse gas effects.

More generally, our aid interventions successfully disse-

minate good practices, particularly good labor and gover-

nance practices – two of the essential components of

genuinely sustainable development.

Internally, we will further formalize our protocols to enhance

corporate responsibility practices. We will consolidate our

Letter from the AFD Group Chief Executive

reporting, broaden its scope, and improve its measure-

ments. These aims drove our preparation of this first

annual report dedicated to corporate responsibility, as we

anticipate more rigorous reporting regulations for public

institutions in years to come.

In the wake of several years’ growth and expanded hiring,

AFD Group’s strengthened commitment to corporate res-

ponsibility is more essential than ever. In addition to mee-

ting accountability obligations, corporate responsibility

measures contribute to work force cohesion and shared

values. In the same vein, we have also revised our code

of business ethics to strengthen and adapt it to the needs

of a larger organization.

I want to thank Jean-Loup Feltz, a close adviser, who died

suddenly at the beginning of 2012. He championed a more

evolved and aware sense of corporate responsibility for

the Group, and through his technical and human gifts, he

succeeded in showing us that this step was essential – a

major affirmation of AFD Group’s identity.

Dov ZERAH

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AFD Group’s Environmental, Social and Governance Reporting

1. his inaugural Environmental, Social and Gover-

nance Report embodies a key commitment of

the AFD Group: responding to stakeholders’

demands for transparency, responsibility and

accountability. In accordance with French and European

Union rules for nonfinancial reporting, this report has a

dual purpose: (1) providing visibility on the Group’s internal

and external operations, and (2) clearly demonstrating the

Group’s ongoing progress in managing social, environmen-

tal and operational risks.

TPhoto Ademe ©

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1•

1. For financial statements, see Reference Document section of the AFD Group 2011 Annual Report.

2. Etablissement public industriel et commercial, or EPIC.

3. More information on the Global Reporting Initiative is available at www.globalreporting.org

4. The Charter of the United Nations is available at www.hrweb.org/legal/unchartr.html

5. The 8 fundamental conventions include: freedom of association and the effective recognition of the right to collective bargaining, the elimination of all forms of forced or compulsory labor, the effective abolition of child labor, and the elimination of discrimination in respect of employment and occupation. Complete texts are available on www.ilo.org/global/standards/introduction-to-international-labour-standards/conventions-and-recommendations/lang--en/index.htm

AFD Group’s EnvironmEntAl, sociAl AnD GovErnAncE rEportinG

The AFD Group consists of the Agence Française de Déve-

loppement (AFD), France’s bilateral development finance

agency, and the Société de Promotion et de Participation

pour la Coopération Economique (PROPARCO), a majo-

rity-owned (59%) subsidiary focused on private-sector

development. Both entities are based in Paris and work

in developing and emerging countries and France’s over-

seas provinces. AFD and PROPARCO use various financial

and other instruments – grants, loans, general budget

aid, guarantees, equity participations, studies, research,

and so forth – to meet aid beneficiaries’ needs. In the

lowest-income countries of sub-Saharan Africa, the Group’s

funding centers on grants and highly concessional loans

with subsidized interest rates and terms. Middle-income

developing and emerging countries and France’s overseas

provinces, as well as companies in foreign countries and

the overseas provinces, benefit from loans (often unsub-

sidized) and other types of financing.

Together, AFD and PROPARCO account for 99% of the

Group’s assets and consolidated net income1. Under

French law, AFD is both a public industrial and commercial

institution2 and a specialized financial institution subject

to bank regulation and risk controls. AFD Group strives

to be an exemplary public entity, spreading good social,

environmental and governance practices with its develop-

ment activities. This report adheres to the Global Repor-

ting Initiative’s G3.1 Guidelines to identify key corporate

responsibility issues and indicators; these are summarized

in the index at the end of this report3.

In conceiving and writing this report, AFD Group drew upon

France’s international commitments to human rights, as

expressed in the Charter of the United Nations (UN)4,

and to rights of workers as outlined in the “fundamen-

tal” conventions of the International Labour Organisation

(ILO)5. The Group also draws upon the Organisation for Eco-

nomic Co-Operation and Development (OECD) guidelines

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1•presented to AFD’s and PROPARCO’s respective board of

governors in 2012. The policy’s scope and strategic fra-

mework covers both AFD and PROPARCO – not least in its

labor relations aspects, since employees of both entities

share a common AFD employment contract, comply with

the same rules, and enjoy the same work force protections.

Because AFD Group regularly borrows in capital markets

to finance its development work, it publishes full financial

statements and disclosures in an annual report known as

the “registration document,” as required by French banking

regulations and endorsed by the French Financial Markets

Authority11. Since 2006, the registration document has

contained all nonfinancial information required by French

for multinational enterprises6, the principles espoused

by the Global Compact7, of which AFD is a member, and

those embraced in the Sustainable Development Charter

for French Public Institutions and Enterprises8. Finally,

the report also owes its inspiration to France’s National

Sustainable Development Strategy for 2010-139 and the

International Organization for Standardization (ISO) 26000

social responsibility standard10.

While this is the first report solely dedicated to social

and environmental responsibility and governance, the

AFD Group instituted its first five-year social and environ-

mental responsibility policy in January 2007. That policy

is currently being updated for 2012-2016, and will be

6. Full text of 2011 edition available at www.oecd.org/dataoecd/43/29/48004323.pdf

7. The United Nations Global Compact centers on 10 universally accepted principles in the areas of human rights, labor, environment and anti-corruption. Full text is available at www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html

8. Charte française du développement durable des établissements publics. The charter is available in French at www.developpement-durable.gouv.fr/IMG/pdf/3_-_Charte_DD-2.pdf

9. The full text is available in English at www.developpement-durable.gouv.fr/IMG/pdf/NSDSp60.pdf

10. Additional information about the voluntary ISO standard for social responsibility is available at www.iso.org/iso/iso_catalogue/management_and_leadership_standards/social_responsibility/sr_discovering_iso26000.htm

11. Autorité des marchés financiers, or AMF.


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1•law12 about the Group’s impact on its work force, its com-

munity and society at large.

Overall, AFD Group’s approach to corporate responsibility

covers two dimensions of its activity:

•Internal operations of AFD’s and PROPARCO’s headquar-

ters in Paris, their 70 field offices in foreign countries and

French overseas provinces, and AFD’s corporate university,

the Center for Economic, Financial and Banking Studies

(or CEFEB)13, in Marseilles, France.

•External operations for development project financing

and execution.

AFD Group’s chief executive, Dov Zerah, has long empha-

sized that internal and external operations require constant

progress in corporate responsibility; this report is but one

manifestation of that emphasis. In November 2010, he

named a special report coordinator for this long-term mis-

sion, who in turn led a working Group in monthly meetings

that examined cross-cutting social, environmental and

governance issues. This has refined the conception and

furthered the operational reach of the Group’s corporate

responsibility policy, principles and goals – subjects cove-

red in detail by this first overview. This full AFD Group 2011

Environmental, Social and Governance Report is available

for download from the Internet on www.afd.fr. A summary

also appears in the print version of the AFD 2011 Annual

Report, available to interested parties upon request and

particularly useful for those without easy access to the

Internet. ■


12. The laws are known as “new economic rules” (nouvelles régulations économiques, or NRE) and “Grenelle Environment II,” which were updated in 2010.These laws aim to reduce French greenhouse gas emissions by 75% by the year 2050. In particular, they foresee a series of measures to encourage “ecological urban planning” that, rather than requiring excessive land and energy resources, uses new technologies in new buildings and more efficient heating systems in older buildings. This would entail the comprehensive application of low-energy-consumption building standards by 2012, along with the construction of energy-positive buildings that generate more energy than they consume.

13. Centre d’études économiques, financières et bancaires, or CEFEB.

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Our Approach to Environmental, Social and Governance Responsibility

2. Foreword

he AFD Group began developing its corporate

responsibility approach in 2005, and formula-

ted its guiding principles in 2007. Until now,

the Group has primarily communicated its

social, environmental and governance efforts to interes-

ted parties in the financial markets, where it raises funds

through bond issues. The Group’s corporate responsibility

TThe « A Cleaner World Without Cans » operation in New Caledonia

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2•

reports were included in the registration document section

of its annual financial and activity report, and published

online by the French Financial Markets Authority.

This inaugural iteration of the AFD Group’s dedicated

Environmental, Social and Governance Report covers the

Group’s 2011 activities. It is intended for a wider range

of readers than the registration document and addresses

all of the AFD Group’s stakeholders – investors and regu-

lators, but also peer institutions, nongovernmental organi-

zations, citizen’s groups, policy makers, aid beneficiaries,

employees, French citizens and those of the countries

where the Group operates. This report affirms the Group’s

commitment to accountability, progress and dialogue –

as befits a public institution pursuing the public interest

– while demonstrating that good governance must now

include social and environmental imperatives.

Environmental, Social and Governance Responsibility Policy Goals

AFD Group promotes sustainable and equitable develop-

ment in developing and emerging countries and in France’s

overseas provinces, always striving to improve how it inte-

grates these concerns in its business conduct. To this end,

AFD Group created a policy for environmental and social

responsibility and governance for its internal and external

operations, which was validated by its board of governors

and implemented in 2007.

The following precepts and goals guide AFD Group’s envi-

ronmental, social and governance responsibility policy.

They draw on the values, principles and rules for res-

ponsible and equitable development that underpin major

international charters and conventions, as cited in the

previous section, AFD Group’s Environmental, Social and

Governance Reporting.

The AFD Group’s eight guiding principles and goals are

as follows:

•Focusing external and internal operations on people

– improving their living conditions and well-being, while

respecting the fundamental rights and social and cultural

diversity of all the Group’s collaborators.

•Affirming the three-pronged need for economic growth,

wealth redistribution, and reduction of both long-term unem-

ployment and globalization’s work force impact (as defined

by the Group of Twenty in Cannes in November 201114 ).

our ApproAch to EnvironmEntAl, sociAl AnD GovErnAncE rEsponsibility

14. A description of the G20 package of measures is available at www.g20.org/Documents2011/11/Cannes%20Action%20plan%204%20November%202011.pdf.

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•Meeting the obligation to use public funding efficien-tly

by ensuring the quality of the Group’s practices and results,

and by integrating lessons learned through regular project

performance evaluations.

•Promoting transparency and stakeholder engagement

by improving public access to information about opera-

tions, while complying with confidentiality rules and data

privacy laws.

AFD Group’s corporate governance policy helps its per-

sonnel integrate these principles into the Group’s strate-

gic programs, thereby fostering other key aims: ensuring

greater public information about these issues, promoting

related know-how internally, reducing the Group’s eco-

logical footprint, and strengthening oversight of these

concerns in all Group-financed aid operations.

The policy spurs managers and employees in all 70 field

offices and AFD’s headquarters to design and execute

corporate responsibility action plans. These plans are

overseen by a corporate responsibility steering committee,

which includes several key positions: the Group’s chief

human resources officer, responsible for labor relations;

the chief administrative officer, responsible for internal

All require specific measures to achieve sustainable

and equitable development that alleviates poverty and

inequality.

•Preserving climate, renewable natural resources, and

ecosystems crucial for economic and social development;

focusing the greatest efforts on environmental remediation

and climate change mitigation and adaptation, in order to

decrease the vulnerability of the poorest.

•Contributing financing for cultural heritage preserva-

tion and appreciation, in accordance with the 2002 World

Summit for Sustainable Development in Johannesburg:

this summit defined culture as the fourth pillar15 of sus-

tainable development, alongside social, economic and

environmental support.

•Adapting aid interventions to the needs of fragile situa-

tions in countries affected by violent conflicts, creating

effective conditions for dispute resolutions that restore

social cohesion and peace.

•Giving priority to partnerships and joint actions that

exploit the wide range of professionals and organizations

dedicated to sustainable and equitable development, while

promoting good social, environmental and governance

practices among these partners.

15. More information is available on http://www.un.org/esa/sustdev/documents/WSSD_POI_PD/English/POI_PD.htm.


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Operating Risk Management

Financial and Economic Risk Management

AFD Group senior management takes many steps to ensure

adequate attention and resources to the management of

financial and economic performance risks. These steps

are detailed in the Group’s strategy for 2012-2016, and

align with the means-and-objective agreement the Group

signed with the French government, covering AFD Group’s

cooperation and development mandate. As a credit insti-

tution, the Group is regulated by French banking laws and

oversight, both of which mirror European Union and other

international directives; therefore, the Group’s capital

management is subject to the Basel III Accords. The pre-

ceding Basel II Accords rested on three precepts: (1) mini-

mum bank capital requirements, measured by a liquidity

ratio, (2) improved tools for capital adequacy assessments

by bank supervisors, and (3) more extensive disclosure

requirements to help enforce market discipline. Following

the 2007 financial crisis, Basel III16 introduced reforms,

extending some Basel II rules while upgrading others to

strengthen the financial system. One of the reforms calls

environmental impacts; the director of external rela-

tionships and partnerships, responsible for transparency

in communications; and the respective chief operating

officers of AFD and of PROPARCO, responsible for deve-

lopment aid projects financed by the Group.

AFD Group’s chief executive has emphasized environ-

mental, social and governance concerns and risk mana-

gement by appointing a special coordinator to champion

the policy and to set up a performance evaluation system.

This system uses key responsibility indicators that mea-

sure progress at two levels – management effectiveness

and impacts –the better to manage environmental, social

and governance risks in internal and external operations.

These indicators are explained in detail in the following

parts of this report.

As part of AFD Group’s 2012-2016 strategic plan, and

under the aegis of the special coordinator, the 2012-

2016 corporate responsibility action plan will progressi-

vely strengthen these performance indicators, measuring

improvements in the relevance and execution of internal

and external actions.

16. The Group of Governors and Heads of Supervision announced higher global minimum capital standards in September 2010.


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The Group’s aid operations address priority issues – areas

where, compared with peer entities, AFD Group is particu-

larly well-situated to act. This attention to leveraging the

Group’s strengths underpins the Group’s 2012-2016 stra-

tegy. Every three years, on average, senior managers define

priority intervention frameworks for each country, working

with their embassies, economic services, backgrounds

and apparent needs.

As part of its risk-management exercise, AFD Group’s senior

management examines the economic impact of every aid

operation it finances; it also conducts post-project perfor-

mance evaluations,. An additional tool for performance

benchmarking arises out of strong partnerships with peer

institutions. These partnerships foster an ongoing dialogue

that identifies areas for improvement within the Group.

Peer reviews also foster sharing of good practices and

other means to bolster internal and external operations.

Such feedback also helps the Group better target aid fun-

ding, making its interventions more effective.

for a gradual phasing-in of higher minimum capital require-

ments, beginning 1 January 2013. Other Basel III reforms

increase capital buffer and liquidity requirements. AFD

Group vigilantly follows international regulators’ changes

to prudential rules, even though the Group’s lending and

other activities are less sensitive to some types of credit,

counterparty, model and market risks.

The Group’s management of its capital requirements

includes a systematic review of all risks and regular

reviews of the Group’s lending and investment portfolios,

particularly at fiscal year end. AFD created an executive-

level Risk department in 2010, and PROPARCO will create

a better-staffed Commitments department in 2012: both

departments will use improved risk management tools and

other means to secure their respective assets.

AFD Group’s board of governors analyzes financial accounts

and budgets each year, paying special attention to organi-

zational efficiency by examining its cost-income ratio. The

board watches over the stability of the Group’s financial

performance and gauges its outcomes in the international

context, where the work of AFD and PROPARCO depends

on the work of private sector entrepreneurs, suppliers and

business services providers.


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These measures control access to the premises, prevent

fire and water damage, and account for seismic risk in

buildings, with upgrading or changing of premises as requi-

red. At the Paris headquarters, senior management has

put a designated employee in charge of safety to better

highlight and address these issues.

Environmental Risk Management

AFD and PROPARCO manage and mitigate environmen-

tal risks, both internally and in development aid opera-

tions, via project selection standards, as well as tools

that identify projects’ impacts on climate change and

natural resources. These efforts are guided by a 2012-

2016 climate strategy and an internal environment stra-

tegy, approved by AFD’s board of directors in 2011 and by

PROPARCO’s board in 2012. The climate strategy applies

to external aid operations, while the internal environment

strategy aims to reduce the Group’s own environmental

footprint. The strategies promote the following environ-

mentally-friendly and “pro-climate” practices for external

and internal operations:

The Group manages human-resources and other risk as

follows:

•Senior management has ensured containment of cer-

tain labor risks, especially those related to supplemen-

tary pensions. In 2008, AFD Group’s in-house pension

system was reformed and incorporated into a collective

fund managed by a French public industrial and commer-

cial entity, the National Provident Fund17 ; present-day

workers pay into this fund for benefit-drawing pensioners.

•Employee remuneration is adjusted on a by-country

basis using a grid that calibrates pay, benefits and wor-

king conditions to local laws. In addition, AFD Group has

its own in-house benefits regime that complements the

public one and enhances its employees’ pension rights,

social insurance and other benefits.

•Senior management initiated a program to increase

internalized expertise and skills, rather than relying on out-

side consultants; this program will be pursued rigorously

under the 2012-2016 strategy.

•To ensure the physical safety of staff members and

visitors, a risk-management team has established rules

and tools for use at headquarters and in the field offices.


17. Caisse Nationale de Prévoyance, or CNP.

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2••Internally, AFD Group has a dedicated employee char-

ged with measuring the environmental impacts of AFD,

PROPARCO and CEFEB internal operations. AFD Group

conducts environmental audits and carbon footprint calcu-

lations to monitor the impacts and improve the reliability

of measurement indicators.

•Senior management has defined and implemented action

plans to reduce the environmental and carbon footprints

of the Group’s internal operations. Priority actions include:

(1) reducing business travel by using video conferencing,

(2) reducing water and paper consumption, (3) developing

plans to increase energy efficiency and use renewable

energy sources, (4) offsetting carbon emissions by purcha-

sing carbon credits to achieve carbon neutrality, (5) ove-

rhauling waste management systems, and (6) pursuing a

responsible and environmentally-aware purchasing policy.

•Internal communication raises employee awareness

about sustainable development and encourages “green

behavior” in all areas.

•Dedicated environmental and social support units within

AFD and PROPARCO provide technical assistance and

advice to their respective development project teams.

These support units also identify financial levers that will

encourage borrowers or aid beneficiaries to improve their

own environmental performance.

•Another unit dedicated to pro-climate support works

with project teams to systematically measure the carbon

footprint of funded projects, using a robust and conser-

vative in-house emissions measurement tool.

•Senior management has committed to long-term pro-

climate project funding, aiming to invest 50% of AFD’s

annual commitments in foreign countries, and 30% of

PROPARCO’s, in projects with positive climate impacts

that also meet poverty alleviation and economic develop-

ment goals

•When reviewing projects for funding, project teams use

“positive impact on the climate” as an additional selection

criterion, while also considering the Group’s geographic

priorities, the target countries’ economic development

levels, and their climate concerns as addressed in their

own national development plans and policies.


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•The Group promotes diversity through commitments to

gender equality and greater opportunity for the disabled in

hiring and management, as per employment agreements

signed with workers in 2007 and again in 2011.

•Since 2007, the Group’s occupational safety and health

office has improved working conditions through programs

for alcohol-abuse prevention and workstation manage-

ment. In 2012, the health and safety office will focus on

preventing work-related stress and psychological problems.

•AFD’s chief executive ensures that a senior manager

attends each committee meeting of employee and union

representatives, in order to encourage dialogue and main-

tain high quality labor relations. A Group-wide meeting in

Paris provides an opportunity for senior management to

meet with employee representatives from headquarters,

as well as directors of field offices and employee repre-

sentatives (from one-third of the field offices each year).

Social Risk Management

AFD Group cultivates and sustains a diverse work force;

it promotes nondiscriminatory behavior and respect for

human rights among its employees, its aid beneficiaries

and its suppliers. The Group also works to reduce inequity

in the communities in which it operates, and takes into

consideration environmental, social and governance fac-

tors in both selecting projects for funding and their imple-

mentation methods. These practices align with the Group’s

commitment to environmental and social stewardship, to

prudent risk management, and to serving the best inte-

rests of aid beneficiaries.

Labor Initiatives

•In conjunction with an increase in project commitments,

AFD Group has redoubled efforts to strengthen its human

capital, in particular by sharing know-how, optimizing its

field offices through new regional hubs, and increasing

recruitment among skilled local nationals for permanent

in-country positions.

•The Group has improved operations in field office

networks by unifying all human resources supervision

and helping all employees plan and train for future career

paths.


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2••The Group’s code of business ethics will be revised

in 2012; it covers conflicts of interest and other ethical

issues and describes behaviors that do not comply with

laws or internal rules.

•The Group performs an internal audit of personnel

management procedures in field offices and at headquar-

ters. These procedures promote fair employment practices

and address issues related to employee discipline and

fraudulent behavior.

•The Group has long guaranteed freedom of associa-

tion and has negotiated a collective bargaining agreement

specifically for its employees. Over time, labor relations

have been professionalized; discussions about achieving

union-type goals in funding, materials and policies have

not reached a formal agreement but remain ongoing.

Management scrutinizes the promotions of employees

who represent the trade union to ensure they are not dis-

criminated against.

•In its external aid operations, AFD Group performs due

diligence in agreements signed with borrowers and aid

beneficiaries, insuring respect for the rights of indigenous

peoples and preventing child labor, forced or compulsory

labor, and work in prohibited sectors.

Human Rights Initiatives

•In 2011, for internal and external operations, AFD Group

instituted the use of filters that preclude companies vio-

lating human or workers’ rights from bidding on AFD or

PROPARCO contracts.

•AFD Group began modernizing its purchasing depart-

ment in 2011, and will include human rights concerns

when training buyers in administrative procedures, monito-

ring suppliers, and so forth. The management of tenders

has been automated and follows standard European Union

operating procedures.

AFD Group signed a commitment to nondiscrimination

on the basis of disability in 2011, and will sign further

nondiscrimination pacts on the basis of disability and

age in 2012. Compliance with these commitments has

entailed creating an online job application that publishes

all openings and serves as the single point of entry for

candidates.

•Internally, AFD Group uses committees and a work

council that equally represent employees and manage-

ment; these manage staff promotions and employee com-

plaints, grievances and appeals.


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Community Initiatives

•AFD Group environmental and social support units pro-

vide technical assistance, advice and support to borrowers

and aid beneficiaries so that they may improve their own cor-

porate responsibility performance. The support units also

identify financial levers to encourage such improvements.

•AFD Group works to avoid corruption and misappro-

priation of funds in beneficiary countries through internal

rules and operating procedures, contractual provisions

agreed with funding recipients, and inspections that must

be made or verified by its own agents.

•The Group avoids anti-competitive practices. For

example, aid is “untied,” meaning that funding does not

depend on whether recipients use it to buy goods or ser-

vices from French suppliers; all tenders awarded as part

of a funding agreement are formally open to competition.

•AFD Group also produces multi-purpose knowledge that

informs and shapes public policy, particularly on topics of

interest to the countries and the communities it serves.

The Group shares its knowledge about shared priorities

such as sustainable development, agricultural production,

food security, infrastructure construction, education and

health, particularly in low-income Sub-Saharan African

countries. It also shares its knowledge about the climate


and the environment, private enterprise and entrepre-

neurship, urban development and neighborhood renewal,

focusing on middle-income and emerging countries.

•As a good corporate citizen, AFD Group complies with

all laws and regulations in France and in the countries

where it carries out development projects. It ensures

compliance through internal controls, internal audits, and

internal and project monitoring, alongside supervision by

regulatory agencies such as the French Court of Auditors,

the General Inspectorate of Finance, national banking

supervisors and others.

Funding Initiatives

•AFD Group ensures that the grants, subsidized or mar-

ket-rate loans it commits to foreign countries and France’s

overseas provinces properly match each locality and each

type of intervention. The Group achieves this by directly

verifying the intervention subject and applying an interest

rate grid that allows for zero, fixed, variable or capped

interest rates.

•The Group further ensures the integrity of its allocations

by managing the social, environmental and governance

risks of projects prior to funding approval, during imple-

mentation, and after project completion.

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Internal Organization for Environmental, Social and Governance Responsibility


CEO

Decides

Management Board

Informs and proposes

Executive Board

Prepares decisions

Helps the group processadvance through discussion,

analysis and proposals

Corporate ResponsibilityWorking Group

Represents all divisionsfrom AFD, Proparcoand the field offices

Management CommitteeMember in charge of

coordinating corporateresponsibility policies

Leads and coordinates

Corporate responsibilitygoals

Promote a safe, healthy,diverse, talented workforce

Control environmentalimpacts of headquarters

and field officeenvironmental impacts

Control environmental,governance and social risksin external aid operations

Strengthen AFD Group’sbrand image and acceptance

among stakeholders

AFD Communications andPartnerships Division

in charge of transparencyand developed-world

partnerships

Human Resources DivisionIn charge of internalsocial responsibility

IT and BuildingDepartment

In charge of internalenvironmentalresponsibility

Proparco Operations DivisionIn charge of corporate

responsibility forexternal aid operations

AFD Operations Division In charge of corporate

responsibilityfor external aid operations

Definition andimplementation

Contribute to internal andexternal discussions about

and acceptance ofcorporate responsibility

Chief Strategy Officerin charge of strategic

plans

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Internal Social Responsibility

The AFD Human Resources division director and her team

are responsible for ensuring internal labor practices and

overseeing work force relations, via two offices and three

departments.

Work Force Management and Budget Office18

This office provides employee-related administrative repor-

ting and supports the Human Resources division’s stee-

ring, budgeting and budget monitoring efforts.

Industrial Relations Office19

This office participates in meetings with work force repre-

sentatives, prepares and organizes union negotiations,

monitors employment law and compliance, and provides

employment-related legal advice.

Department of Training, Continuing Education

and Human Resources Development20

This department ensures employee skills development,

implements training and education programs, and improves

human resources processes.

Management Coordination

In November 2010, the AFD Group’s chief executive officer

appointed a special coordinator for environmental, social

and governance responsibility policy to formulate a cohe-

rent corporate responsibility program. In 2011, the chief

executive prioritized reporting on the subject, setting the

stage for this inaugural report; the corporate responsibility

program will be finalized in 2012.

Dedicated Working Group

After six months of preliminary work, on 23 June 2011 the

special coordinator and the AFD Group Executive Board

decided to create a dedicated corporate-responsibility

working group. Since then, its fifteen members from AFD,

PROPARCO divisions and some field offices have met on

a monthly basis to discuss practical, cross-functional

topics, and to work on issues related to the Group’s cor-

porate responsibility approach. Each working group mem-

ber relays information about this work and offers relevant

training to other employees in their respective divisions

and departments.

18. Pôle Contrôle de Gestion Sociale et Budgétaire, or PGS.

19. Pôle Relations Sociales, or RSO.

20. Division Formation Continue et Développement des Ressources Humaines, or FCD.


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21. Division Gestion des Carrières et Recrutement, or GCR.

22. Division Administration et Rétributions, or ADM.

Internal Environmental Responsibility

An individual reporting to the AFD Group chief adminis-

trative officer and working in the Effective Professions

Office acts as the point person for internal environmen-

tal responsibility issues. The cross-functional office sets

up organizational systems and procedures for all Group

departments.

The head of internal environmental responsibility helps

define the Group’s environmental policy and strategy and

coordinates carbon emission-reduction projects for inter-

nal purchasing, waste management, power consumption,

and so forth. He pursues five principal tasks:

•Using diagnostic tools to examine the environmental

and carbon footprints of AFD Group headquarters buildings

and field offices, measuring the Group’s greenhouse gas

(GHG) emissions and managing its ecological footprint.

•Proposing and initiating GHG emission reduction pro-

jects.

•Offsetting the Group’s emissions by purchasing carbon

credits, aiming for carbon-neutral operations.

Career Management and Recruiting Department21

This department analyzes internal needs for specific

skills, recruits new hires, oversees employee inductions,

manages careers and job mobility, and provides advice

and support to managers and other employees to prevent

work-related psychological risks.

Administration and Remuneration Department22

This department manages employee remuneration and

benefits, related administrative and legal matters, work

force protections, pension administration and oversight,

and the Human Resources division information system.

The department maintains employee records in all ope-

rating countries and manages employee travel, pension

plans, and health, life and disability insurance. It also facili-

tates geographic mobility through individual work contracts,

provides tax advice, and manages expatriations, worker

protections, benefits, and employee personal insurance

and savings plans.


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23. Département des Appuis Transversaux, or DAT.

24. Division d’Appui Environnemental et Social, or AES.

25. Division de Changement Climatique, or CLI.

Environmental and Social Support Office24

The Environmental and Social Support (E&SS) office

provides expertise to AFD project teams, helping them

manage environmental and social risks as they prepare

and monitor AFD-financed development projects.

This office also conducts training and awareness exercises

in environmental and social responsibility and governance

issues for project managers and all other AFD employees,

the better to integrate the Group’s approach.

Climate Change Office25

The Climate Change office leads, supports and consoli-

dates AFD projects that affect the climate, whether for

climate-change adaptation or mitigation.

Within PROPARCO

Within PROPARCO, the Environment, Social and Impact

Unit26 reports to the deputy chief executive in charge of

general administration. The unit has three main tasks:

managing environmental and social risks for PROPARCO-

financed projects; improving the environmental and social

•Raising awareness about the environmental aspects

of sustainable development within the work force, and

mobilizing concern for the environment, climate change,

waste management, energy efficiency, and so on.

•Participating in working groups with national and inter-

national partners on the topic of environmental responsi-

bility, and assisting the start-up and supervision of studies

on the subject.

External Environmental and Social Responsibility

Within AFD

Within AFD’s Operations division, the Cross-Functional Sup-

port23 department implements environmental, social and

governance risk management for external (aid) operations.

The department supports operational teams, manages

and monitors cross-functional projects, performs quality

controls, and keeps current on new tools and procedures.

Within the department, two offices focus on operational

corporate responsibility issues.


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•Providing support for corporate responsibility by crea-

ting tools, and by offering training and similar measures

to other departments in the Group.

Transparency

In 2007, the AFD Group adopted a transparency-in-com-

munications policy, inaugurated with detailed informa-

tion about its business operations and projects on the

AFD website, www.afd.fr. Since the policy’s inception, an

employee dedicated to the subject has explained the trans-

parency policy internally and ensured its implementation

through annual action plans.

26. Unité Environnement, Social et Impact, or UESI.

27. Direction des Opérations, or DOP.

28. Division du Portefeuille, or PTF.

29. Division des Risques, or RIS.

30. Division Juridique, or DJU.

quality of PROPARCO projects and related borrower per-

formance; and measuring PROPARCO development pro-

jects’ impacts and results. To achieve these aims, the unit

provides technical support to business managers in the

Operations division27 and the Portfolio department28, and

to analysts in the Risk Division29. It also works with the

Legal department30 to define aid beneficiaries’ contrac-

tual environmental and social commitments. Managing

these risks and commitments includes:

•Participating in the AFD Group’s definition of environ-

mental and social responsibility and governance strate-

gies, and adapting them for PROPARCO.

•Helping manage environmental, social and governance

risks in PROPARCO-financed projects, from initial identifi-

cation through post-project evaluation.

•Promoting better environmental and social performance

in projects.

•Analyzing PROPARCO borrower commitments to mana-

ging their environmental and social risks, and monito-

ring implementation of these commitments, as per PRO-

PARCO’s funding contracts.


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2• Organizationally, the Strategy division does not have spe-

cific human or other resources dedicated to corporate

responsibility issues or implementation. Rather, the divi-

sion’s managers and their teams are exposed to social,

environmental and governance imperatives “naturally” in

the course of their work and have shared their thoughts

on several topics for this report: these include, among

others, AFD’s corporate university, its knowledge-produc-

tion activities, and the environmental financing facility34

it manages. ■

Strategy

The AFD Group Strategy division31 has two means of inte-

grating environmental, social and governance concerns into

its objectives: (1) it provides internal critiques, questio-

ning the Group’s actions in the two crucial realms of inter-

vention strategy and operations quality, and (2) it keeps

abreast of international standards, rules and conventions

for strategic purposes.

Within the Strategy division, the Strategic Steering and

Forecasting department32 houses the Organizing and Fore-

casting department33 – a central but not unique place for

incubating new ideas and examining new topics. Once new

thinking has matured sufficiently, the Strategy division

shares it with the Group’s operational departments. The

Strategic Steering and Forecasting department contributed

much to the corporate responsibility process, for example,

and to transparency in particular.

31. Direction de la Stratégie, or STR.

32. Pilotage Stratégique et Prospective, or PSP.

33. Animation et Prospective, or APR.

34. The French Global Environment Fund (Fonds Français pour l’Environnement Mondial, or FFEM)

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Internal Governance

s a public establishment and specialized

financial institution, AFD Group is accoun-

table for its activities. Its governance rests

on structures that ensure transparency and

good management. These structures include a strategic

orientation board that oversees preparation and execution

of the “means and objectives” contract between France

AOur Internal Governance, Corporate Ethics and Anti-Fraud and Corruption Controls

3.

AFD’s Corporate Responsbility working group

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and the Group, a board of governors that deliberates on

the Group’s strategic direction, its contract with the French

government, its financial operations and investments, its

borrowings and project financing, its asset management,

and its selection of internal and external auditors. An exter-

nal auditor and the internal audit committee assist the

board of governors in its supervisory role. The audit com-

mittee verifies the quality of information furnished by all of

the AFD Group’s divisions, and assesses the accounting

methods used as well as the quality of internal controls.

The French Institute of Internal Audit and Control35 certifies

the Group’s auditing methods and internal control activi-

ties in accordance with French professional internal audit

procedures and international audit and internal control

standards. AFD and PROPARCO each have an Executive

board of senior managers that oversees their respective

internal and external operations.

Corporate Ethics

Since 2004, AFD Group’s corporate ethics program has

used codes and counselors to encourage and facilitate ethi-

cal business practices. The program has three objectives:

(1) provide guidelines for expected ethical and professional

behavior, (2) help employees facing ethical dilemmas to

respond appropriately, and (3) foster work force and inter-

company solidarity and strengthen Group performance by

improving and unifying business practices.

The ethics program rests on two written codes, the AFD

Group corporate code and the code of business ethics, both

having supplemental instructions. The program also fea-

tures an ethics advisory and support service for employees.

The corporate code sets out the Group’s mission and values

statement, and expresses the Group’s goal of creating a

community of professionals dedicated to development. It

emphasizes essential individual and collective commit-

ments, notably to social and environmental responsibility,

compliance with laws and regulations, and the fight against

money-laundering, terrorism financing and corruption. The

code of business ethics describes specific ways that mana-

gers, employees and the Group (as an employer) should

act on these commitments. A corporate ethics advisor

interprets how the code should be applied on an everyday

basis, and is available to offer counseling to employees. The

ethics advisory may also ask the Group’s corporate ethics

advisory committee to rule on internal matters, and make

recommendations for improvements to the ethics program.

our intErnAl GovErnAncE, corporAtE Ethics AnD Anti-FrAuD AnD corruption controls

35. Institut Français de l’Audit et du Contrôle Internes, or IFACI.

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ciples in an equity participation. This background informa-

tion fuels the project team’s extensive financial analyses

and also serves the know-your-customer due diligence

required of all financial institutions. Such due diligence

especially looks for “politically exposed persons,” such as

senior politicians and high-ranking government, judicial or

military officials and executives of state-owned corpora-

tions. It also requires understanding certain things about

the managers and management structure of a borrowing

company. The project team clarifies any suspicious infor-

mation or activity, which may, in turn, lead the team to

deny funding for a project.

•AFD Group routinely finances aid beneficiaries’ pur-

chases of a variety of goods and services for public

works and services, such as construction works, in a

process known as “procurement” that follows speci-

fic procedures. To fight corrupt practices – fraud, price-

fixing, coercion, collusion, graft, and so forth – the Group

puts selection criteria in place to prequalify bidders prior

to advertising the tender. It also requires borrowers

and grant recipients to deploy anti-corrupt-practices

controls to ensure integrity, transparency, equity and effi-

ciency at various stages of the procurement process.

The main control device is the “no objection letter” that

the borrower or grant recipient must issue at specific

Anti-Fraud and Corruption Controls

As France’s central operator for bilateral development

aid, AFD Group is particularly vigilant that all loans, gua-

rantees and subsidies that it grants are allocated to their

intended purposes. The Group is equally vigilant about

investing only in reputable and well-governed companies.

This vigilance goes hand-in-hand with the Group’s man-

date to alleviate poverty, because corrupt practices, fraud

and other misappropriations of development-aid funding

hinder the Group’s mission. The same is true of any aid

financing that is used – unbeknownst to the Group – to

launder money or finance terrorism.

AFD Group is relentless in combating everything that might

tarnish its development financing: collusion, coercion,

corruption, graft, fraud, money laundering, terrorism finan-

cing and so forth. The Group has introduced a number of

internal rules, operating procedures, contractual arran-

gements and inspection points that its employees must

apply or verify.

•When reviewing a potential project, an AFD Group pro-

ject manager and his/or her team must gather informa-

tion about the potential aid beneficiary – the recipient of

a grant, the borrower in a lending transaction – or a com-

pany’s (or other legal entity’s) beneficial owners and prin-


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contractors, to take other steps to combat corrupt prac-

tices, money laundering, and terrorism financing. These

steps include swearing that they have not unduly influenced

the project’s execution to the detriment of the aid bene-

ficiary, and that nothing in the tender, negotiation or exe-

cution of any works or services could be construed as a

corrupt practice, as defined by the 2003 United Nations

anti-corruption convention.


During 2012, AFD Group will update its online training

courses for new hires, and strengthen its anti- fraud, cor-

ruption, money-laundering and terrorism-financing policy

when it ratifies its third strategic orientation plan for 2012-

2016. Two of the plan’s cornerstones rest on ensuring

financial safety and combating corruption in the Group’s

internal and external operations. ■

points in the bid process to assure it has performed its

due diligence on bidders, in compliance with the Group’s

financing agreement. Once the bidding process has ended,

the Group’s project team regularly monitors the borrower

or grant recipient and the financed work.

•In 2011, the Group set up an internal, online anti-money-

laundering training course. Directed toward employees who

have or may hold a job where money-laundering could

occur, 1300 have already completed the course.

•AFD Group also provides all employees an intranet tool

to filter lists of financial and trade sanctions, embargoes

and restrictions imposed by the European Union, France,

Great Britain, the United Nations and the United States

against certain entities and sectors. Project teams use

the filter when first reviewing a potential project, before

starting a business relationship, and periodically during a

project’s lifetime. They apply the filter to all sectors, sup-

pliers (for in-house purchases and for aid beneficiaries’

purchases), aid beneficiaries including private companies,

and the beneficial owner(s) and major shareholder(s),

directors and managers related to that company.

•AFD Group also funds non-public works and services

through direct to borrower loan financing, grants and other

funding agreements contain a number of clauses that

require grant recipients and borrowers, and their sub-


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Our Stakeholders4.

The photo exhibition, « A New Look at Developing Countries”, in Paris

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our stAkEholDErs

Stakeholder descriptions and interactions

Bilateral and multilateraldevelopment banks and funds,

including FGEF

GroupAFD

Proparco

NGOs, foundations, charities,nonprofits, local governments,

universities academic institutions

Central governments,public services

Parliament

Supervisory ministries Regulators

AFD Group Stakeholder Configuration

InternalExternal

Civil society

Partner networks

Aid beneficiaries

Suppliers /Subcontractors

Public authorities

Shareholder Frenchgovernment (100%)

Board of Governors /Executive &Management

Boards

Local governments

Public and privateenterprises

NGOs, nonprofitsfoundations

Employees, interns,consultants

Enterprise committeerepresentatives

Employee delegates

Unions

Central work council

Enterprise committees

Hygiene, Security andWorking Conditions committee

Employees

our stAkEholDErs

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Stakeholder Engagement

Over the past ten years, AFD Group has developed increasin-

gly open and accessible means of communicating with

internal and external stakeholders. This strategy is partly

driven by regulatory requirements, but also by a desire

to more fully engage the public and other stakeholders.

Specific provisions of French law mandate and regulate

the Group’s communications with employees, trade unions,

investors, regulators and other national authorities. Labor

law requires that the Group communicate with employees

and work councils about employee representation, trade

union laws, labor discussions and negotiations. Banking

law requires communication with investors and France’s

Financial Markets Authority about internal controls, finan-

cial statements and annual activities. Public enterprise

law requires communication with the Group’s national

oversight authorities and institutions.

European public developmentfinance institutions

Proparco

Non-European publicdevelopment finance institutions

Private sector financialinstitutions

Proparco Stakeholder Configuration

InternalExternal

Civil SocietyShared Group actions

Partner network

Borrowers

Suppliers /Subcontractors

Private sector non-financialcompanies

Employees

Employee representativeon Board of Governors

Employee delegate

Central work council

Enterprise committees

CHSCT

Employees

Shareholders,including AFD (59%)

Public andprivate directors

Internal/externalGroup controls

our stAkEholDErs

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our stAkEholDErs

visibility through communication, bolstering civil society’s

awareness and understanding of French aid policies. This

attention to public accountability helps create quality dia-

logue and trust-filled relationships with all stakeholders

over the long term.

The AFD Group’s stakeholder engagement strategy centers

on three principles – visibility, dialogue and accountabi-

lity36 – and four main objectives:

•Communicating about AFD Group’s public interest mis-

sion.

•Raising awareness and understanding about the Group’s

aid activities.

•Explaining the Group’s vision and strategy.

•Establishing ongoing dialogue with stakeholders and

other interested parties, in a spirit of transparency and

mutual understanding.

AFD Group has invested in these expanded means and

increased the quality of its dialogue with other French

and international stakeholders: aid beneficiaries, donors

and peer institutions, nongovernmental organizations,

civil society, private sector companies, and others. The

Group makes some 130 anonymous email contact points

available to facilitate stakeholder communication with

headquarters and field offices, including one dedicated

to transparency, [email protected].

This active communication and reciprocal dialogue allows

the Group to improve its services, funding instruments

and expertise while allowing stakeholders to do likewise.

Suggestions from any stakeholder – regardless of role in

the Group– can help advance its public service mission:

financing development.

Accountability to Stakeholders

AFD Group’s stakeholder engagement strategy addresses

accountability expectations within its sphere of influence,

in the spirit defined by the ISO 26000 social responsibi-

lity standard. As France’s central operator for develop-

ment aid, the Group seeks to increase its credibility and

36. Visibility measures include the AFD Group website, www.afd.fr and the transparency contact point, [email protected]; examples of dialogue occur in the four “town hall meetings” conducted annually with the French public and an NGO; accountability efforts include discussions with the public and parliamentarians during the Group’s 70th anniversary events in 2011.

our stAkEholDErs

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projects are published on the AFD Group website as soon

as these receive funding approval from the Group’s board

of governors and either the Project Committee or the NGO

Project Committee. Of 330 projects approved for funding

in 2011 (including those conducted with NGOs from deve-

loped countries), 263 were posted by September 2011.

By year end, the overall publication rate reached 81%;

only 67 communiqués remained unpublished as of 31

December 2011 (see figure below).

Many of AFD Group’s French and international develop-

ment peers, as well as donors, civil society organizations

and partners, have repeatedly asked the Group to better

publicize its mission and work before approved projects

actually begin. Consequently, communiqués about new

AFD Group’s Accountability and Transparency Boundaries

Government officials Supervisory ministriesParliamentarians Directors

Civil Society

NGO Public Local governmentsRating agencies Aid beneficiaries

Companies

Influences Influences

Accountability

Transparency

To publish

Published

To publish

Published

39%

61%

Non-NGO Projects Publication Rate 2011

19%

81%

All Projects Publication Rate 2011Non-NGO Projects Publishing Rate 2009-2011

December 2009 December 2010 December 2011

26

6761

%

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The percentage of new project communiqués published for

joint AFD-NGO partner projects is relatively high because

they are less expensive and less complex than projects

that AFD implements directly. Excluding NGO partner pro-

jects, the publication rate falls to 61%, somewhat lower

than in 2010. Grant recipients and borrowers review and

approve all new project communiqués prior to their publi-

cation.

AFD Group also plans to publish post-project evaluation

overviews (on qualifying projects37) to increase its accoun-

tability to stakeholders. After a pilot phase, management

increased the number of projects evaluated and gradually

expanded a decentralized post-project evaluation system,

where the local or regional field office conducts the eva-

luation in the project country. In 2011, 78% of projects

that qualified for evaluation were assessed. By 2013,

AFD Group aims to systematically evaluate 90% of such

projects.

To publish

Published

To publish

Published

39%

61%

Non-NGO Projects Publication Rate 2011

19%

81%

All Projects Publication Rate 2011Non-NGO Projects Publishing Rate 2009-2011

December 2009 December 2010 December 2011

26

6761

%37. Projects that can be evaluated entail commitments greater than €750,000, excluding funds for studies and capacity building, fungible projects, global budgetary aid, and credit or other risk guarantees for PROPARCO’s loans and equity participations.

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that the share of projects in foreign countries scoring

“satisfactory” or better was stable from 2006 to 2011,

representing 77% in 2011. This resembles the trends

observed when assessing projects during execution.

The Group uses evaluation criteria defined by the OECD’s

Development Co-operation Directorate38, assessing each

project’s relevance, effectiveness, efficiency, impact and

sustainability. In general, post-project evaluations indicate

Foreign aid post-project evaluations 2007-2011

62

2007 2008 2009 2010 2011

82

68

8178%

"Satisfactory" or better foreign aid projects 2006-2011

80

2006 2007 2008 2009 2010 2011

73

83

76 7776

%

38. More information about the OECD criteria is available on http://www.oecd.org/dataoecd/42/6/49756382.pdf

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and headquarters. In the same spirit, the chief executive

regularly emails employees about his work-related trips to

foreign countries and France’s overseas provinces.

Additional internal stakeholders include the following com-

mittees, each composed of employees and, in some cases,

external advisors.

Central Work Council39: a legally mandated committee

for work force relations and trade union negotiations.

Enterprise Committee40: a legally mandated committee

in every French enterprise with 50 or more employees,

whose purpose is to express employee wishes on a variety

of topics. AFD Group has five enterprise committees, one

in Paris for AFD and PROPARCO, and one in each of the

four largest overseas provinces; see Part 5 of this report,

“Our Work Force.”

Hygiene, Security and Work Conditions Committee41:

a legally mandated committee focusing on workplace

improvements, with an equal number of representatives

from the Paris Enterprise Committee and from AFD and

PROPARCO employee delegates; see Part 5 of this report,

“Our Work Force.”

Since October 2011, the Group’s IT system has been

programmed to generate post-project reports and perfor-

mance scores. These reports should help project teams

improve performance scores improve in the future.

Stakeholder Descriptions

Internal stakeholders: Employees, committees and CEFEB

In 2011, employees participated in designing a new five-

year (2012-2016) strategic plan for AFD Group, stimula-

ting additional internal dialogue. Employees debated one

another about the Group’s medium-term future and contri-

buted written observations and suggestions to a dedica-

ted intranet site. The Group’s oversight authorities also

participated in the strategic plan’s design. In 2012, the

proposed five-year plan will be submitted to AFD Group’s

board of governors for acceptance.

The Internal Communications department publishes a

bimonthly newsletter on the Group’s intranet, the Conti-

nents’ Echo, to promote work force cohesion. Targeting all

employees, the Echo provides information about projects

and important events, collected from various field offices

39. Comité central d’entreprise, or CEE.

40. Comités d’Etablissements, or CE.

41. Comité d’hygiène, de sécurité et des conditions de travail, or HSCT.

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Board of Governors and sub-committees42: legally

mandated committees that determine the AFD Group’s

strategic direction, financial operations, and borrowing:

see Part 2, “Governance.”

Audit and Internal Control Committee43: a legally man-

dated committee that serves the board of governors and

the inspector general; see Part 2, “Governance.”

Center for Economic, Financial and Banking Stu-

dies44, or CEFEB: a corporate university and training ins-

titute; see below.

Executive Board: one each for AFD and for PROPARCO,

these oversee operations and answer to the board of

governors; see Part 2, “Governance.”

42. Conseil d’administration et ses comités délégués.

43. Comité d’audit et le contrôle interne.

44. Centre d’Études Financières Économiques et Bancaires, or CEFEB.

45. For more information on the OECD non-binding principles and standards for responsible business conduct in a global context, consistent with applicable laws and internationally recognized standards, see http://www.oecd.org/dataoecd/43/29/48004323.pdf

Corporate Responsibility Training at AFD Group’s Corporate University

The Center for Economic, Financial and Banking

Studies, or CEFEB, is the Group’s corporate

university. Based in Marseilles, it aims to build

capacity and competency through professional training

courses and seminars. It serves those who help

implement AFD Group projects – Group employees,

but also professionals and officials in beneficiary

countries and provinces, and other partners in

developing, emerging and developed countries.

CEFEB promotes education as a means of increasing

social and environmental responsibility and good

governance, in accordance with OECD guidelines for

multinational enterprises45. CEFEB serves as both

a meeting ground and an important internal tool for

learning and engagement on these vital issues.

Since 2005, CEFEB has expanded the number

of corporate responsibility courses for AFD Group

aid beneficiaries and partners. It offers generalist,

professional certificate and degree programs, such as

a Masters in Public and Private Works, where students

spend 15% of their time on corporate responsibility

issues. It also offers longer or shorter courses

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46. Centre d’Etudes et de Recherches sur le Développement International, or CERDI.

47. See the AFD publication, Savoirs communs, number 11 (in French).

specializing in the subject. In 2011, CEFEB offered

more than three weeks of corporate responsibility

training in its Masters in Sustainable Development

program, in conjunction with the University of

Auvergne’s Center for International Development

Studies and Research in

Clermont-Ferrand46, France. Since 2007,

CEFEB has also included corporate responsibility

issues in many seminars on infrastructure

development (particularly for water, energy and

transportation) and on capital investment financing

in the poorest and emerging countries.

CEFEB regularly updates its list of seminars on

www.cefeb.org.

CEFEB also promotes corporate responsibility

by designing and teaching specific courses for

AFD Group employees. Since 2010, CEFEB has

conducted a seminar on biodiversity to highlight its

protection in countries where the Group operates. In

2010, CEFEB also retrofitted its Group-owned office

building in Marseilles to facilitate disability access.

The Group’s 2012-2016 strategy foresees CEFEB

efforts to include corporate responsibility issues in

more courses, particularly when training executives

working in AFD Group field offices. ■

External stakeholders: Civil society, NGOs, Aid Beneficiaries, Donors and Peer Institu-tions, Overseers and the French Parliament

For more than 10 years, AFD Group has conducted an

ongoing dialogue with all its external stakeholders: French

and foreign civil society, NGOs, aid beneficiaries, peer ins-

titutions, oversight authorities and the French parliament.

Since part of the Group’s aid funding comes from public

resources, the French public has an interest in the Group’s

activities. Inaugurated in 1941, AFD produced a number

of public events and communiqués about its work on

the occasion of its 70th anniversary in 2011. AFD Group

headquarters and field offices also engage civil society

stakeholders in the countries where the Group operates.

For example, in 2011, more than 40 field offices produced

their own public events for the Group’s 70th anniversary.

The Group also published a study47 about partnering with

civil society for development purposes. The study was co-

produced with an NGO, and examined simple yet fundamen-

tal ideas, such as the rationale for building civil society,

observations about intercultural dialogue, and explana-

tions for the relationship between food security and peace.

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financed projects and increase aid effectiveness – the

central topic of past development conferences in Accra,

Paris and Busan. At the end of 2011, AFD Group counted

55 partnership agreements with development finance ins-

titutions and agencies, as well as foreign governments,

foundations, nonprofit organizations and NGOs.

AFD Group also works with NGOs from developed and

developing countries to implement joint or independent

operations and to incubate ideas. At the beginning of

2009, AFD Group adopted a special funding mechanism to

finance the projects of French and European NGOs working

independently of AFD in the Group’s regions of operation.

AFD Group maintains supportive relationships with its aid

beneficiaries that go beyond simple financial ties. These

relationships are bolstered by the Group’s network of

employees working in each country, and through syste-

matic use of financing-contract clauses requiring regular

meetings and technical support.

AFD Group’s gradually assembled network of donor par-

tners and peer institutions has proven one of its major

strengths. The Group’s partners and peers share regio-

nal and local knowledge, design joint project-financing

programs, co-produce conferences and other events, and

make co-lending arrangements, leveraging each other’s

assets and skills. These partnerships improve the effec-

tiveness of aid operations and help spread good social,

environmental and governance practices. In particular, AFD

and PROPARCO maintain increasingly close cooperative

relationships with national development aid agencies in

the European Union, and with the European Investment

Bank (EIB) and the European Commission. For example,

EIB, AFD and KfW Bankengruppe, the German deve-

lopment bank, belong to the Mutual Reliance Initiative

network, which aims to simplify procedures for jointly-

An Opportunity to Share AFD Experiences with Citizens

As part of its 70th anniversary celebration, AFD

Group created a traveling open-air photo exhibition,

“A New Look at Developing Countries,” featuring

photos and videos of real people and projects in

developing countries. The Group expanded on the

show and included a series of public debates about

development aid, which shared the Group’s expertise

and experiences with a large audience. Nearly 175,000

people had seen the exhibition by the end of 2011.

In France, public conferences on topics related

to the photos attracted 3,200 attendees, while 40

AFD field offices in foreign countries produced 140

similar events. The debates and conferences proved

stimulating for the audiences and Group alike,

raising awareness about often-misunderstood topics

and issues while illuminating the Group’s work and

France’s development aid policy. ■

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AFD’s international stakeholder “ecosystem”�

International Foundations & Charities

Bill & Melinda Gates FoundationAga Khan Development NetworkPrince Albert II of Monaco FoundationConservation International

Emerging Donors

ChinaBrazilSouth AfricaArab States

Multilateral Donors

World BankAfrican Development BankAsian Development BankInter-American Development BankIslamic Development Bank

Bilateral Donors

German Foreign Aid (KfW, GIZ)British Foreign Aid (DFID)Japanese Cooperation (JICA)American Foreign Aid (USAID, MCC)

United Nations

UNDPUNEPIFADUNIDOGlobal Compact

European Donors

European Investment BankEuropean CommissionEuropean Development FinanceInstitutions

Global Funds

UNITAIDGlobal Aids FundFast-TrackGAVIGlobal Environment Fund

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AFD’s French partners and interlocutors

Nonprofits

Nongovernmental OrganizationsFrench National Platform

of International Solidarity NGOs(Coordination Sud)

Academics & Think-tanks

CERDI/FERDIIDDRI

Collège de France

Private Sector

CompaniesFoundations

Networks & Platforms

Decentralized FrenchCooperation

RegionsDepartments

TownsWater AuthoritiesCités Unies France

Parliamentarians

FranceEurope

The AFD Group also maintains contact daily with its French

oversight authorities, given that the Group has acted as

the sole authority for France’s foreign aid since 1998.

The policy’s strategic and financial implementation requires

constant contact between the Group and its overseers.

In 2011, French government officials defined a new

foreign aid strategy and means framework, which led to

a three-year means-and-objectives contract, signed by AFD

Group’s chief executive and six supervisory ministries on

29 October 2011.

The Group must also account for its actions to members

of the French Parliament, meaning the National Assem-

bly and the Senate. The Parliament affects the Group

through national budget decisions. It also affects the

Group through legislation, parliamentary reports, recom-

mendations, and related actions.

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The Relationship Between AFD Group and the French Parliament

AFD Group and the French Parliament traditionally

maintain an indirect relationship through an annual

“questions for the government” session, where

citizens ask questions and the Group prepares the

government’s answers on development subjects.

In some years, the Group and Parliament have

direct talks, as when public enterprise legislation

changes (as it did in July 2010), or in response to

parliamentary interest in how the Group executes

French aid policy – the subject of substantial

questioning in 2011. An AFD study and two

parliamentary reports published in 2009 and 2011

covered bilateral and multilateral aid issues; as a

result, the Group and government created four steps

to enhance France’s development aid strategy: (1)

simplifying the institutional architecture of French

aid; (2) recognizing the complementary nature of

bilateral and multilateral aid efforts; (3) aligning

bilateral aid for “proximate causes” and multilateral

aid for “great causes”; and (4) optimizing bilateral

partnerships. ■

The French Global Environment Facility

In 1994, France created the French Global

Environment Facility48 (FGEF), a bilateral fund for

sustainable development projects; it makes grants

in addition to and in tandem with those of the

Global Environment Facility (GEF). Between 1994

and 2014, the FGEF will have received €354.11

million from the French government to cover grants

and operating costs. Every four years, the French

government tops up the fund, providing about €20

million per year just for grants.

The FGEF follows a biannual strategy, validated

by a steering committee made up of representatives

from AFD and five French ministries: economy,

foreign affairs, sustainable development, research

and agriculture. AFD houses the FGEF secretariat,

providing administrative support and governance for

the fund on behalf of France. AFD also manages the

fund’s assets.

As the institutional arm of the FGEF, AFD spreads

exemplary environmental practices through

the FGEF’s innovative, socially-oriented and

48. Fonds Français pour l’Environnement Mondial, or FFEM.

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experimental funding operations. In the past 17 years,

the FGEF has funded more than 200 pilot projects

and programs that reconcile economic growth with

environmental protection. These innovative projects

serve as models; when they succeed on a small scale,

they expand France’s capacity to finance larger-

scale socially responsible environmental projects

and policies – ones that address climate change,

biodiversity preservation, international waters,

desertification, persistent organic pollutants and

stratospheric ozone.

AFD demonstrates its commitment to the

environment by initiating, financing and carrying

out FGEF projects, focusing on sectors that meet

basic human needs and preserve global public goods

– greater economic well-being, social justice, more

secure peace, environmental sustainability, and so

forth. ■

AFD Groupand Stakeholders Mutual Influences

Stakeholders’influenceon AFD

AFD Group’s influence on stakeholders

Involved ExternalStakeholders

Public authorities,shareholders, regulators,

supervisors

Internal StakeholdersEmployees, boards

of directors

Affected External StakeholdersAid beneficiaries, suppliers,

subcontractors, civil society, partners

Low High

High

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AFD Group and Human Rights

As befits a development finance institution dedicated

to fighting poverty, AFD Group has integrated

human rights into its operations and conduct

since its creation. Today this effort aligns with the

10th guideline of France’s current sustainable

development strategy. For example, AFD and

PROPARCO work in the microfinance sector in

partnership with other reputable funding agencies,

and in close collaboration with the Consultative

Group to Assist the Poor (CGAP), the World Bank’s

fiduciary fund supporting public policy and aid

agencies. In 2011, AFD and PROPARCO experts

actively helped prepare for the G-20 meeting in

France. The Group also leads and funds projects

for the so-called “base of the pyramid” to meet

the poor’s basic needs in emerging and developing

countries.

AFD Group has also further integrated human

rights in its external and internal operations.

Externally, project teams now target psychological

and social risks when preparing projects that address

traumatic situations – armed conflicts or natural

catastrophes. Project teams also include resources

for psychological and legal counseling within their

funding arrangements. Internally, the Group has

set up a unit, comprised of management, employee

representatives and delegates, to oversee working

conditions, prevent psychological risks, and listen to

individuals’ needs. ■

Promoting Corporate Governance in the Private Sector

In recent years, AFD has organized conferences with deve-

loped-world companies to bolster their environmental and

social responsibility, good governance, and investment

in the developing world. In partnership with firms doing

business in developing countries – especially French multi-

nationals – the Group also funds and co-produces research

on new business opportunities with positive economic

and employment potential. These efforts toward corpo-

rate responsibility and development contributions draw on

guidelines in France’s National Sustainable Development

Strategy and the ISO 26000 social responsibility recom-

mendations for community involvement49.

49. Community involvement and development refers to non-commercial, non-exploitative actions companies can take to benefit the locality(ies) and/or country(ies) where the company has operations.

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In 2011, AFD private-sector conferences and studies cen-

tered on three major topics. The first focused on so-cal-

led “base of the pyramid” strategies, showing companies

how to make their products and services more affordable,

accessible, available and appropriate for the poorest

consumers50. A second conference covered so-called

“fair trade” strategies to encourage equitable corporate

purchasing practices; a third reviewed “local community”

strategies in firms’ countries of operation, including job

creation, local hiring and purchasing, and time and money

donations to civic concerns51. To further encourage pri-

vate-sector development initiatives, AFD also partners

with national and international organizations involved in

sustainable development and corporate governance, such

as the United Nations and nonprofit business networks52.

50. One example of such products might be a low-cost family shampoo that works with cold water, one that can be produced, distributed and advertised efficiently through partnership with a local company

51. For more information (in French) see www.afd.fr/lang/en/home/AFD/nospartenaires/entreprises-partenaires.

52. For more information see http://www.afd.fr/lang/en/home/AFD/nospartenaires.

53. For more information, see AFD Group’s entry on www.globalcompact.org.

AFD Partners to Promote Good Corporate Governance in the Private Sector

United Nations Global Compact: In 2000, Kofi

Annan (the then-secretary-general of the United

Nations) launched the Global Compact. This

strategic policy initiative addressed businesses

committed to operating in line with ten universally

accepted principles, covering human rights, labor,

environment and the fight against corruption. In

2004, AFD was the first bilateral donor to sign onto

the Global Compact. Every year, the Group reports

on its operational progress on the ten principles and

good corporate governance53. AFD also manages

France’s financial contribution to Global Compact

operations.

France Global Compact: French companies

committed to the Global Compact have united in

their own nonprofit group, France Global Compact.

AFD sits on the nonprofit’s management committee.

On 25-26 October 2011, AFD, France Global

Compact and the French Ministry of Foreign and

European Affairs jointly sponsored two conferences.

One was entitled “How Can Companies Significantly

Help in Achieving the UN Millennium Development

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Goals?” and the other “What Kind of Partnerships

Can Occur Between NGOs, Companies and Public

Institutions?”

IMS-Entreprendre pour la Cité: The nonprofit

organization, IMS-Entreprendre pour la Cité

(Institute for Solidarity Giving-Entrepreneurs for the

City), was created in 1986 by socially-responsible

French business leaders. It now comprises nearly

200 French companies that improve social equity

by creating value for the communities in which they

operate, in France and abroad.

In 2008, AFD and the nonprofit organized a

colloquium, “Do Business for Development,”

where attendees discussed trends in corporate

commitments to help developing countries; they

also identified new avenues for partnerships between

public institutions, private-sector companies and

organizations, NGOs, and civil society. In 2011,

AFD and IMS-Entreprendre pour la Cité signed a

partnership with two goals:

(1) Preparing, funding and leading a collaborative

European platform for “Smart, Sustainable and

Inclusive Growth at the Base of the Pyramid;”

(2) Sharing governance best practices and

experiences with firms from developed and

developing countries by mobilizing French

companies, particularly small- and medium-sized

enterprises.

Institut Véolia Environment: The Institut Véolia

Environment, created by the French water, waste

and energy multinational Véolia Environment S.A.,

provides insights into major global challenges related

to the environment. On 27-28 June 2011, AFD and

the Institute organized an international conference

on reconciling poverty alleviation with environmental

quality preservation, with a session dedicated to role

of the private sector.

Plateforme pour le Commerce Equitable: The

Plateforme pour le Commerce Equitable (Fair Trade

Platform, or PFCE), a nonprofit organization, was

created in 1997 to lobby for fair trade and French

fair-trade companies. The PFCE works to ensure the

autonomy and dignity of producers in developing

countries, and argues for changes to conventional

international trade rules. AFD has partnered with

PFCE to help increase the share of fair-trade

products in corporate purchases and strategies.

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Ashoka France: Ashoka is a global nonprofit

network of social entrepreneurs engaged in

innovative projects. AFD recognizes the importance

and positive effects of social entrepreneurship in

developing countries. It therefore joined with other

donors in underwriting a summit meeting for social

entrepreneurs, organized by Ashoka France in June

2011. More than 300 social entrepreneurs from all

over the world participated in the summit, alongside

other stakeholders – large and small companies,

public-sector institutions and organizations, NGOs,

and the media. Another Ashoka event brought

African social entrepreneurs to Paris to meet with

AFD’s chief executive.

CARE France: CARE France is a chapter of

CARE, a leading humanitarian organization fighting

global poverty. Over the past 15 years, CARE

France has partnered with private companies to

address the causes of poverty. The partnerships ally

economic profit with benefits from positive social,

environmental and governance performance. AFD

signed an agreement in December 2011 to finance

CARE France’s corporate responsibility-oriented

partnerships with French companies.

These partnerships will address topics such as

access to basic services for the poor, the fight against

climate change, and firms’ creation of jobs and

economic growth in countries where they operate.

RSE & Développement: The French nonprofit

group, RSE & Développement (SER &

Development) researches and reports on corporate

social and environmental responsibility in developing

and emerging countries. It aims to increase public

awareness of these issues, and to encourage

companies toward development that meets the

United Nations Millennium Development Goals.

The nonprofit maintains the largest French-language

Internet portal on these subjects54. The website

aims to educate companies –from all nations and

levels of development – in corporate responsibility

issues and tools pertinent to developing countries.

It also encourages discussion of best practices

and their implementation, as well as collective

approaches to corporate responsibility. In 2011,

AFD signed a partnership agreement with RSE &

Développement to provide upgrade support for the

portal, making it more professional, modern and

comprehensive. ■

54. See www.res-et-ped.info.

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Sharing Knowledge with Stakeholders

The AFD Strategy Department contributes to operational

doctrines, five-year strategic plans, and the annual report

to the board of governors on the strategic value of Group

efforts. The Department also creates knowledge about

development aid activities, theories, issues, regions and

priorities. This knowledge capitalizes on the Group’s expe-

rience and puts it into a broader perspective. Knowledge

production takes the form of topical and sectoral research,

evaluations, training courses, conference production, ad

hoc partnership management, and so forth.

The resulting knowledge takes shape in books and other

publications and circulates at conferences and other

events. Producing this knowledge, and sharing it with

internal and external stakeholders, helps the Group (1)

streamline its strategic choices, sectors and regions, (2)

enhance the pertinence and effectiveness of its aid inter-

ventions, and (3) increase its presence and influence in

national and international discussions, the better to serve

the interests of the Group’s governmental over-seers and

sponsors.

The AFD Strategy Department’s knowledge production com-

plements other Group publications, which equally share

and exploit the Group’s best thinking about its operations

and outcomes. The AFD Communications department,

PROPARCO, and the French Global Environment Fund also

publish a variety of valuable materials to better inform and

engage stakeholders. Much of the material is available

for download from the Group’s website55.

55. For an exhaustive list of 2011 publications, refer to the Publications portal at www.afd.fr.

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AFD Group plans to improve the amount and kind of infor-

mation it shares with internal and external stakeholders,

providing even more accountability and knowledge. Over

2012-2016, the Group will:

1. Increase the number of publications about aid inter-

ventions (both those conducted alone and with NGOs), to

cover 90% of all projects.

2. Increase the number of project evaluations and moni-

toring reports during the project lifecycle.

3. Conduct an independent assessment of AFD Group’s

external operations performance in 2012.

4. Improve identification and selection of priorities for

research coverage and knowledge production, based on

subjects of common interest to the Group and to stake-

holders.

5. Set up a research committee internally to devise annual

research plans and examine proposals. ■

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Corporate Responsibility in External Operations

Aiming for Responsible Financing and Implementations

s France’s bilateral donor, AFD Group funds

sustainable economic development projects

all over the world. In Sub-Saharan countries,

AFD focuses on poverty reduction; in the Medi-

terranean Basin region, on improving living conditions;

in emerging countries, on protecting the environment;

AOur Funding Operations5.

AFD funds the sustainable development policy of Curitiba, Brazil

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our FunDinG opErAtions

and in France’s overseas provinces, on promoting natio-

nal solidarity. In the same regions, PROPARCO catalyzes

local and foreign private-sector investments to foster eco-

nomic growth, to encourage sustainable and responsible

development, and to meet the UN Millennium Develop-

ment Goals. PROPARCO also helps its funded companies

improve their own environmental, social and governance

performances. Both AFD and PROPARCO comply with the

Group’s corporate responsibility policy, managing the envi-

ronmental, social and governance risks inherent in their

aid interventions throughout each project’s lifecycle. This

also enables them to improve project quality.

In 2009, PROPARCO underscored the Group’s commitment

to responsible private-sector financing and investment by

signing the Declaration of Principles promulgated by the

Association of European Development Finance Institutions

(EDFI)56. The Declaration mirrors the precepts of the UN-

backed Principles for Responsible Investment Initiative57

– a network of institutional investors practicing six prin-

ciples of environmental, social and corporate governance.

Two environmental and social support (E&SS) offices

underpin AFD’s and PROPARCO’s respective commitments

to responsible aid financing and implementation:

1. Environmental and Social Support

Department58 :

created within AFD in 2007, this department compri-

sed four environmental experts and two sociologists in

2011.

2. Environmental and Social Impacts Unit59 : created

within PROPARCO in 2010, this unit comprised three mul-

tidisciplinary experts in 2011.

Providing Appropriate Risk Management Support

AFD Group created its environmental, social and gover-

nance policy in 2007 to improve risk management, since

any development project – no matter how well-intentioned

– may adversely affect populations or the environment.

To manage these risks while pursing the Group’s sustai-

nable development mandate, both AFD and PROPARCO

56. For more information on EDFI, see http://www.edfi.be/.

57. For the entire list of six principles, see http://www.unpri.org/principles/.

58. Division d’Appui Environnemental et Social, or AES.

59. Unité Environnement Social et Impacts, or UESI.

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•Monitoring risk prevention and mitigation measures

during project execution.

AFD and PROPARCO project teams can turn to their res-

pective environmental and social support departments for

the following services:

•Assistance for pre-funding risk assessments and post-

funding risk management.

•Analysis of the project team’s risk management

approach and effectiveness.

•Monitoring of aid beneficiaries’ compliance with contrac-

tual commitments.

•Design and deployment of tools for environmental and

social risk assessment, risk monitoring, and post-project

evaluation.

•In-house training and writing of standard risk-manage-

ment clauses for contracts.

•Contributions to knowledge production and the Group’s

risk management expertise.

subject all “qualified”60 aid projects61 to a systema-

tic “ex-ante” risk assessment (that is, before approving

funding for a project). The AFD and PROPARCO project

teams perform a preliminary environmental and social

risk assessment, and their respective E&SS and project

teams detail these potential risks. The teams then join

with the borrower or grant recipient to monitor the actual

project risks during implementation. The teams do this

whether such projects are financed directly by AFD or PRO-

PARCO, or through financial intermediaries, such as banks.

Following steps similar to those that fight corruption and

poor governance within and without the Group, AFD and

PROPARCO project teams apply the following controls to

mitigate environmental and social risks in their qualified

aid operations:

•Preventively assessing each project’s social and envi-

ronmental effects – including climate change impacts –

prior to funding and implementation.

•Proposing suitable measures to avert, abate or offset

anticipated negative effects.

60. The following types of financing proposals do not qualify for ex-ante assessments: subventions and delegated funding from the French foreign ministry, refinancing for very indebted poor countries, funding for feasibility and other studies, funding from the European Union, and so forth.

61. “Projects” are all development aid interventions except those funded by so-called “comprehensive” aid. Comprehensive aid projects do not go through the review process, and/or their financing covers a wide variety of purposes within a single project.

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•Defining the due diligence required of the project team.

•Assisting with due diligence and project examination

for projects that present high risk levels (A-level) or that

will need special support, such as for A-level financial

institutions.

•Requiring the aid beneficiary to develop risk mitigation

measures and ways to improve project performance.

•Formalizing the aid beneficiary’s commitments in risk

mitigation and performance improvement, via a project

financing contract.

•Creating an action plan with the borrower or grant reci-

pient to operationalize the commitments and track their

implementation.

•Analyzing and reporting on the effectiveness of the

E&SS strategy, its measures and action plan implemen-

tation; reviewing the periodic progress reports submitted

by the aid beneficiary; conducting oversight visits to the

project if it presents high risk levels.

•Analyzing and reporting the completed project’s actual

and residual risks, and the outcomes and performance of

the E&SS procedures and plans.

•Monitoring of trends in risk management practices and

participation in international conferences.

•Developing partnerships with other donors and lenders,

encouragement of common risk management practices,

and review of joint project proposals prior to approval.

Regarding the last point – creating common practices and

procedures among peer institutions – AFD currently works

with the World Bank, KfW and the European Investment

Bank, while PROPARCO collaborates with EDFI and the

World Bank’s private sector arm, the International Finance

Corporation (IFC).

As mentioned previously, in addition to helping internal

project teams, the AFD and PROPARCO environmental and

social support (E&SS) departments also assist aid benefi-

ciaries to improve the environmental and social quality of

their projects and labor practices. The E&SS experts pro-

vide technical assistance, advice and consulting services,

helping borrowers and grant recipients follow international

standards and receive certifications. The E&SS experts

also identify financial levers that motivate aid beneficia-

ries to improve their performances. For every qualified AFD

Group project, the E&SS experts follow these procedures:

•Identifying potential environmental and social risks, and

assessing risk levels in conjunction with the AFD or PRO-

PARCO project team (see box on risk level classifications).

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AFD Group Standards for Project Acceptance

AFD Group has listed exclusionary criteria that it

uses to deny project-funding requests on ethical,

regulatory, environmental or social grounds. Boards

of governors of both AFD and PROPARCO

validated the list at the beginning of 2011, and

codified the criteria in the Group’s July 2011 guide

to financing tenders in foreign countries62.

All Group-financed foreign aid operations must

comply with the target country’s national laws.

However, in cases where a country’s laws are

incomplete or changing, the Group applies

standards, rules and good practices for project

financing, as set by multilateral peer institutions,

including:

- The World Bank safeguard policies63 for public

sector financing64.

- The International Finance Corporation

performance standards for private sector financing.

The Group also draws on their international

conventions, declarations and guidelines that it (and

its aid beneficiaries) have signed, including:

- The United Nations Convention on the elimination

of all forms of discrimination against women65.

In addition, AFD Group and its aid-receiving

countries also draw on the conventions and

guidelines mentioned in the introduction to this

report: the U.N. Charter for universal human rights,

the ILO conventions for workers rights, and the

OECD guidelines for multinational enterprises. ■

62. The AFD Group guide to financing tenders in foreign countries is available on http://www.afd.fr/webdav/site/afd/shared/PORTAILS/SECTEURS/ENTREPRISE/pdf/Guide_Passation_Marches_AFD.pdf

63. For more information, see http://go.worldbank.org/WTA1ODE7T0.

64. For the IFC standards, see http://www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/pol_PerformanceStandards2006_full/$FILE/IFC+Performance+Standards.pdf

65. For more information on the so-called CEDAW convention, see http://www.un.org/womenwatch/daw/cedaw/.

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Ex-Ante Assessment Coverage

Over time, AFD Group has increased the number of pro-

ject proposals that qualify for environmental and social

risk assessments during the funding review process..

When the Group began its ex-ante assessment procedures

in 2008 (after implementing its corporate responsibility

policy in 2007), AFD’s E&SS team performed an ex-ante

assessment on all but 12% of AFD’s qualifying financing

proposals, which represented only 0.6% of AFD funding

that year. The unanalyzed proposals were both low risk

(C-level) and low value.

By 2011, the AFD E&SS team performed an ex-ante risk

assessment on all but 6% of qualified projects, which

represented only 0.3% of AFD funding that year. Since

2009, the PROPARCO E&SS team has performed an ex-

ante assessment of the environmental and social risks

and impacts on 100% of its qualified financing proposals.

In 2011, the social and environmental risks allocation by

value and by volume for authorized AFD and PROPARCO

projects stood as follows:

AFD Group Portfolio Risk Levels

In accordance with international standards,

AFD Group classifies the projects that it directly

finances according to three levels of social and

environmental risk: (1) A-level indicating high risk,

(2) B-level indicating moderate risk, and (3) C-level

indicating low or no risk. In addition, the projects

that the Group finances through an intermediary

financial institution are coded FI and A, B, or C,

depending on the financial institution’s overall

portfolio risk, as in FI-A, FI-B or FI-C. ■

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AFD Group Approved Project Portfolio Environmental and Social Risk Levels 2011 (by volume)

31

6

12

34 25

19

A-level: high risk

B-level: moderate risk

C-level: no risk

Directly Financed ProjectsRisk Levels

FI-A-level: high risk

FI-B-level: moderate risk

FI-C-level: no risk

Intermediary Financial InstitutionPortfolio Risk Levels

Unrated

AFD Group Approved Project Portfolio Environmental and Social Risk Levels 2011(by value)

54

14

14

11

5

10


31

6

12

34 25

19

A-level: high risk


C-level: no risk




FI-C-level: no risk


Unrated


54

14

14

11

5

10


31

6

12

34 25

19

A-level: high risk


C-level: no risk




FI-C-level: no risk


Unrated


54

14

14

11

5

10

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Bujagali Dam Hydropower Project in Uganda

Uganda suffers from a severe shortage of electricity.

Significant power outages negatively affect the

nation’s economy and citizen well-being. To

remedy this situation, AFD has helped finance a

250-megawatt hydroelectric dam near Bujagali

Falls on the Nile, above Lake Victoria in Uganda.

The power station will have five 50-megawatt

turbines and should increase Uganda’s total

electricity production capacity to a minimum of

520 megawatts, ample to meet demand and prevent

outages. The total project cost is US$906 million,

of which $612 million will go for construction work

and $8.5 million to compensate for environmental

and social costs.

A carbon footprint assessment of the Bujagali Dam

hydropower station predicts that over 50 years

the station will produce only 266,000 metric tons

equivalent of carbon dioxide (tCO2e); that is 112

to 220 times fewer greenhouse gas emissions than

the equivalent power produced by a thermal plant.

The Clean Development Mechanism certified

Five Examples of E&SS for Projects and Impacts

the project in 2011, and the aid beneficiary slated

to operate the dam should be able to sell 904,000

tCO2e of carbon offset credits per year.

In all, 85 families comprising 634 people will be

displaced by the dam, and relocated to a new village,

Naminya. Another 1,203 families representing 4,525

individuals will be affected by the dam through total

or partial expropriations of their cultivable land.

Thus a total of 1,288 families and 5,158 individuals

will receive financial compensation paid by the

hydropower project aid beneficiary.

When an AFD project team visited the area in 2003

to assess the project’s environmental and social

impacts, it found that residents of affected villages

had identified two critical problems – their lack of

access to drinking water and electricity. In addition,

the team saw that major erosion problems on the

steep banks of the Nile could benefit from a riverbank

reforestation program. AFD therefore financed

an additional $2.8 million program to cover these

supplementary environmental and social problems,

providing a grant within a subsidized loan for works

executed by the beneficiary.

By the end of 2011, more than the 400 hectares

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targeted for reforestation had been replanted,

primarily because of the riverside villagers’

remarkable mobilization. They took great interest in

the type of vegetation selected for the reforestation

project. Their need for drinking water access was

confirmed, and work on a water supply system was

finished in 2011 as well. The hydropower operating

company involved in the project agreed to pay each

household’s cost share for connecting to the rural

electrical grid. The remaining 70% of the cost was

covered by Uganda’s national rural electrification

agency. Because of AFD’s environmental and social

management program, the citizens most directly

affected by the project saw benefits over and beyond

the creation of infrastructure vital for the whole

country. ■

Corporate Responsibility and the Central Credit Fund in Vietnam

Vietnam presently counts a population of 85 million.

The majority (75%) live in rural areas, which

concentrate most of the country’s poorest residents.

In this context, lending services for rural populations

take on a special importance. In 1993, a small savings

and loan association, the People’s Credit Fund

(PCF), opened branches in towns and villages to

provide banking services to rural entrepreneurs not

served by national banks.

AFD granted a refinancing loan to the PCF

savings and loan network, which counts more than

1,000 branches mutually owned by their member-

companies. The network enjoys very high loyalty from

its members because of its cooperative status. The

savings and loans offer proximity, an understanding

of customers, and a solid network of local branch

offices.

In light of this, AFD also made a grant to the PCF

network to take advantage of its member-based

network. The grant monies helped the savings and

loan association play a new role – that of sharing

good social, environmental and labor practices

among its member-companies. The PCF network

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set up an innovative social and environmental risk-

management system. Its loan officers now consider

these risks alongside the financial aspects of each

loan application. The AFD project team assisted the

PCF network via a four-step process:

(1) Writing an environmental and social policy;

(2) Developing a manual for loan officers to

help them address environmental and social issues

relevant to entrepreneurs;

(3) Using the manual to train in-house trainers;

(4) Training the loan officers in the PCF branches.

The environmental and social policy serves two

complementary objectives: it increases PCF customer

awareness of their businesses’ impact on society,

workers and the environment, and it shares good

practices for managing these effects.

When a PCF loan officer grants a loan to a

farmer, for example, the loan officer will discuss the

farmer’s business and talk about ways to improve

environmental, health, safety and labor practices.

The loan officer may cover specific, farming-related

subjects, such as appropriate fertilizer use, proper

storage of food, or proper storage of hazardous

materials in enclosed areas away from children. The

discussion may touch on child labor issues or the use

of protective gear, such as masks, goggles, gloves

and overalls, when using fertilizers or other toxic

chemicals.

If the loan officer is working with a borrower

from a farming-related activity, such as equipment

or vehicle repair, he or she may suggest the best

ways to manage hazardous waste, such as battery

acid and oil residues from machines – residues that

cause water pollution without proper disposal. The

officer might also discuss the storage of hazardous

waste, and how to avoid chemical reactions,

explosions, fires, leaks and poisoning, while making

other suggestions for safe working conditions.

This pragmatic and systematic approach allows

loan officers in the PCF network to offer a new

service to their customers, increasing customer

loyalty while disseminating best practices for

environmental and social concerns – practices that

will benefit local entrepreneurs. ■

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A Responsible Line of Credit for Halk Bank in Turkey

Commercial and retail banks are generally large

companies that strongly affect a country’s economic

fabric. AFD Group makes refinancing loans to

banks – loans that ultimately benefit local businesses,

particularly the small- and medium-size enterprises

(SMEs) that create the most jobs and contribute the

most to developing countries’ economies. Banks that

receive AFD Group financing play a central role in the

social and environmental consequences of the business

activities they finance in turn.

AFD Group promotes good social and environmental

practices in banking for two reasons: to strengthen

banks’ own corporate responsibility policies and risk

controls, and to encourage banks to educate their

business customers about these concerns and practices.

For example, AFD set up a partnership agreement

with Halkbank in Turkey in order to relay good social

and environmental practices to the bank’s customers.

A state-owned bank created in 1938, Halkbank has

a large, nationwide branch network that includes

disadvantaged areas. AFD granted a first line of credit

to Halkbank in 2007. This allowed AFD to raise

awareness of social and environmental responsibility

issues among the bank’s 400 staff members and 30

small- and medium-size business customers. After

this initial success, a second line of credit financed an

ambitious corporate responsibility program for three

years, from 2008 to 2011.

The second credit line’s underlying program had

two main components. The first affected Halkbank

directly, aiming to help the bank manage the social and

environmental risks in its loan portfolio and to train

bank employees on the subject. The AFD project team

accomplished this by setting up specific due diligence

procedures in Halbank’s loan approval process and by

providing training courses for all bank staff members.

The second component helped Halkbank’s SME

customers through various means, including:

- Granting loans to 160 SMEs in disadvantaged and

remote areas;

- Producing a campaign to raise SME awareness

about corporate responsibility concerns, while training

SME managers and staff on issues such as workplace,

environmental law compliance, and conservation

of water and energy. SMEs also received free risk

audits and certification assistance for ISO 14001

(environmental management) and OHSAS 18001

(a British Standard for occupational health and safety

management systems). ■

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Raising Environmental Standards at an Indonesian Paper Manufacturer

PT Fajar Surya Wisesa Tbk (FSW) is Indonesia’s

second largest producer of industrial paper for

cardboard and brown paper bags. FSW uses 100%

recycled paper, purchased in Indonesia for the

most part. The company, which received an ISO

14001 environmental management certification

in June 2010, expects to reach its full paper

production capacity of 1,000,000 tons in 2012.

FSW’s efforts to reduce its environmental

footprint distinguish it from its competitors. These

efforts include:

- Recycling waste paper.

- Reducing energy consumption by co-generating

electricity and steam with an on-site waste

incinerator.

- Using two wastewater treatment plants and

reducing water consumption by reusing the treated

wastewater.

FSW called on PROPARCO to finance the

purchase and installation of a new incinerator to

burn all wastepaper by-products and to produce

steam for the cardboard production process.

In connection with its financing, PROPARCO

commissioned an environmental and social audit

of FSW to assess its compliance with IFC’s

international performance standards and to

determine any additional actions needed.

The audit identified the need to address waste

incinerator emissions. Prior to working with

PROPARCO, FSW did not have any controls on

the incinerator to curb dioxin and furan emissions.

These toxic substances have important, proven

health risks. However, Indonesian law does

not require any air pollution controls for such

emissions.

PROPARCO therefore made an agreement

with FSW management: the company would curb

and regularly measure the quantity of dioxin and

furan emitted by the two incinerators, to ensure

that levels complied with international limits.

FSW managers also agreed to improve their

environmental and social risk management system

within twelve months. The management team

specifically promised to:

- Make hazardous materials storage safer.

- Secure access to the landfill and block

neighbors’ entry for safety reasons.

- Improve fire prevention and protection systems.

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- Require subcontractors to comply with FSW’s

environment, health and safety management

system. This extension of the system meets

the intention of ISO 26000 – influencing the

company’s subcontractors toward good practices,

or even including subcontractors within the

company’s reporting scope. ■

Other AFD Group External Operations Having Social and Environmental GoalsAFD Group promotes aid operations that

further its fundamental sustainable development

goal. Three projects illustrate how AFD and

PROPARCO achieve this.

From 2011 through 2015, AFD has financed

a project that uses satellite data to monitor

changes in Central African forest cover. This

method is widely recognized as essential for

tracking changes, and as an indispensible tool in

reducing greenhouse gas emissions arising from

deforestation and environmental degradation.

AFD’s initiated this pilot project to meet Central

African countries’ need for satellite-generated data,

and will invest an estimated €11.5 million in the

project over five years.

In September 2011, AFD also made a €300

thousand grant to a nonprofit collective, “Ethics

on the Label” (Ethique sur l’Etiquette). The

project aims to improve respect for human and

worker rights in the production of exports for

sale in France, in line with ILO conventions and

the UN Charter. The nonprofit will campaign to

increase awareness about worker human rights,

aiming to motivate many French consumers –

about 200,000 people directly – to prefer ethically-

produced products. The campaign will also address

employers, public officials and others in producing

countries, both in the developing world and in

Asia, as well as in France and Europe.

In 2011, PROPARCO in turn showed its

commitment to socially and environmentally

responsible development by funding a €14.1

million hospital project, and nine renewable-energy

credit lines and projects for a total of €193.6

million. ■

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(1) Develop more environmental and social risk assess-

ment tools to allow Group project managers, as well as

borrowers and grant recipients, to take greater ownership

of corporate responsibility issues.

(2) Improve aid beneficiaries’ in-house corporate responsi-

bility skills through continuous training, particularly for

in-house project managers.

(3) Improve monitoring of aid beneficiary efforts to meet

their environmental and social risk control obligations.

(4) Assess how well the Group responds to project team

opinions about environmental and social risks, both after

project reviews and during the project cycle, from funding

decisions through implementation monitoring.

(4) Improve consideration of environmental and social

impacts in completed project evaluations.

(5) Improve how Group teams assess and classify ser-

vices that generate environmental and social benefits, by

sector and purpose.

AFD Group’s Climate Strategy: An Exemplary Approach

Although climate concerns exceed the relatively narrow

focus of managing social and environmental risks in deve-

lopment projects, AFD Group has given its highest priority

to environmental preservation and climate change mitiga-

tion. The fight against climate change is inextricably linked

to economic and social development. Global warming’s

acceleration will hinder economic development over the

long term, just as economic development can exacerbate

warming through rapid increases in natural resource and

fossil fuel consumption.

As part of a 2012-2016 Climate Strategy validated by

AFD’s board of governors in November 2011 and by PRO-

PARCO’s in March 2012, AFD Group aims to become a

leading financier in the international fight against climate

change. It will deploy its experience, achievements and

advantages to help developing and emerging countries

meet the priorities and challenges posed by climate

change. The Group’s assistance will improve its aid bene-

ficiaries’ strategic integration of climate concerns and

their resilience to effects of climate change, while also

enhancing their economic and social development.

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(3) A policy of selecting projects according to their cli-

mate impacts, while also considering AFD’s geographic

mandates, each country’s level of development, and each

country’s development policy.

Measuring and Accounting for Impacts

Given the increased demand for transparency within civil

society and the international community, AFD Group has

established a clear and publicly available classification of

the climate-related projects that it finances.

AFD Group qualifies its standard development projects as

“climate projects” when they also fight climate change or

benefit the environment. This means that such projects

(1) reduce total GHG emissions more than they raise the

level of emissions during the project’s lifetime (mitigation),

and/or (2) reduce the vulnerability of populations, goods

and ecosystems to climate change impacts (adaptation).

These expected climate-change mitigations are calculated

via a particularly robust method, one developed to quantify

GHG emissions and reductions incurred in AFD-financed

projects. AFD is one of the few donors to have reached this

stage with its “Carbon Footprint Tool,” originally inspired by

AFD Group’s climate strategy rests on two main objectives:

(1) Positioning AFD Group as the central actor in French

funding commitments to fight climate change in developing

and emerging countries;

(2) Positioning AFD Group as a full-fledged actor in the

architecture of international climate finance, through its

deployment of European and other international climate-

related resources and mandates, and via its direct access

to thematic funds, notably the Green Climate Fund.

AFD Group grounds its climate strategy and identity on

three structural precepts, applied differentially according

to each country’s regional specificities66:

(1) An ambitious and sustained objective to make cli-

mate-related financing commitments equal to 50 percent

of AFD’s foreign-aid funding per year, and 30 percent of

PROPARCO’s annual total.

(2) Systematic measurement of every project’s carbon

footprint, using a robust and conservative internal method

from AFD Group’s operations manual67. The method calls

for estimating projects’ carbon footprints at the beginning

of each funding proposal review.

66. For more information, see the “Climate” portal on www.afd.fr.

67. For more information on AFD’s climate impact measurement method, see the “Climat” portal (in French) on http://climat.afd.fr and choose “Mesure des impacts.”

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In addition to the Climate Change department, a high-

level steering committee now guides the cross-functional

aspects of the Group’s climate strategy, ensuring coordi-

nation and mobilization between various departments.

The steering committee comprises representatives from

AFD and PROPARCO administrative divisions and from the

French Global Environment Facility secretariat69.

2011 Climate Project Results

In 2011, AFD Group committed nearly €2 billion to deve-

lopment projects that also fought climate change, of which

€1.6 billion financed greenhouse gas (GHG) emissions-

reduction (mitigation) projects, while the other €400 mil-

lion financed adaptation projects, for a total of 45 pro-

jects and programs. In addition, the Group committed

€48 million to financing “mixed” projects that have both

adaptation and mitigation effects. Of the total 2011 com-

mitments to climate projects, AFD authorized funding for

€1.815 billion, while PROPARCO’s share reached €179

million for six climate projects.

AFD Group uses a precise accounting method to improve

the transparency of communication about climate-related

work done by France’s Environment and Energy Manage-

ment Agency68. AFD leads the effort among international

donors to harmonize their carbon-footprint measurement

approaches.

AFD has also established classifications for projects that

target economies adapting to climate change. The classi-

fication system identifies regional vulnerabilities and the

types of action needed to reduce them. AFD has another

tool in development that would estimate its own projects’

vulnerabilities to climate change; this should foster solu-

tions to potential problems both when new projects come

under review and during their lifetime.

An Internal Division Dedicated to Fighting Climate Change

AFD has set up a Climate Change department to develop

tools and provide operational support, monitoring, and

implementation advice for of the Group’s climate stra-

tegy. The division integrates anti-climate-change diligence

and objectives into AFD’s standard procedures. These

procedures include the project classification and climate

impacts measurement mentioned above.

68. Agence de l’environnement et de la maîtrise de l’énergie, or ADEME.

69. Fonds Français pour l’Environnement Mondial, or FFEM.

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While substantial, the Group’s total commitment to cli-

mate projects in 2011 was some €71.3 million less than

in 2010, although the difference may be simply due to

the funding approval calendar for large projects. In 2011,

climate project commitments represented 41% of all AFD

commitments to foreign countries (compared with 55%

in 2010) and 19% of PROPARCO’s total (compared with

27% in 2010)70.

actions. Funding is classified as mitigation-related when

the completed project’s direct and estimated carbon foot-

print shows that it will reduce or (in the case of renewable

energy projects) avoid more than 10,000 tCO2e, compared

with pre-project conditions. Mitigation projects also include

those without measureable carbon footprints that are dedi-

cated to pro-climate actions, such as budget support for

a country’s national climate plan, bank credit lines dedi-

cated to financing renewable energy or energy efficiency,

and capacity-building for climate change issues. Funding

is classified as adaptation-related based on a matrix that

shows how the development project will lower a region’s

vulnerability.

70. AFD counts commitments to foreign countries in the year that the strategic board approves (commits) the financing, except for funding implemented on behalf of the French government or for global budgetary aid, debt-reduction contracts, credit risk guarantees for PROPARCO, and international funds and facilities, such as the Clean Technology Fund. PROPARCO counts the guarantees it receives from AFD in its annual commitments.

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AFD Group Climate Project Commitments 2005-2011

500

1000

1500

2000

2500

2005 2006 2007 2008 2009 2010 2011

in € Millions

Number of " Climate projects "

Mitigation commitments (+ mixed)

Adaptation commitments (+ mixed)

17

38

49

72 70

43

18

AFD Group Climate Project Commitments 2005-2011

500

1000

1500

2000

2500

2005 2006 2007 2008 2009 2010 2011

in € Millions

Number of " Climate projects "

Mitigation commitments (+ mixed)

Adaptation commitments (+ mixed)

17

38

49

72 70

43

18

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YEAR FUNDING APPROVED 2005 2006 2007 2008 2009 2010 2011 TOTAL

Mitigation and mixed projects 16 18 28 34 51 53 35 235

Mitigation commitments (€ Million) 422 568 626 1,074 1,996 2,534 1,607 8,827

Average project value (€ Million) 25 32 21 33 40 48 46 38

Adaptation and mixed projects N/A N/A 29 24 27 22 15 117

Adaptation commitments (€ Million) N/A N/A 216 309 430 422 436 1,813

“Climate Projects” 17 18 38 49 72 68 45 307

“Climate” commitments total (€ Million) 422 568 779 1,236 2,388 2,707 1,994 10,094

AFD Group Adaptation and Mitigation Allocations 2005-2011

Commitments for Adaptation Projects

AFD Group Commitments for Adaptation Projects by Sector 2011

AFD Group classifies its climate-change adaptation pro-

jects into three categories:

1. Projects that conserve water, preserving it for the future.

2. Projects that improve the preservation and conservation

of other natural resources, such as forests, agricultural

land and fisheries.

3. Projects that add to knowledge about climate change

impacts.

Similarly to 2010, in 2011 the vast majority (87% by

value, 54% by number) of AFD commitments for adaptation

projects addressed water conservation. One-third of the

adaptation projects targeted agricultural land and other

natural resource preservation, representing 13% of com-

mitments by value.

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Agriculture and natural resources

Knowledge creation

Water

Adaptation projects by value 2011 (€ million)Adaptation projects by volume 2011

8

54%

2

13%

5

33%

382

87%

43

10%

11

3%

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Latin America and Caribbean

Asia and Pacific

North Africa and Middle East

Sub-saharian Africa

Adaptation projects by value 2011 (€ million) Adaptation projects by volume 2011

11426%

15235% 150

34%

215% 10

66%

320%

17%

17%

Geographically, the African continent – most vulnerable to

climate change – drew the majority of commitments for

adaptation projects. The sum was equally split between

the Sub-Saharan Africa (35%) and the North Africa (35%)

regions. In 2011, the Group made significant new commit-

ments to adaptation projects in Latin America, primarily for

a comprehensive water management project in Colombia.

However, adaptation commitments to Asia fell sharply,

from a 46% share in 2010 to 5% in 2011.

AFD Group Commitments for Adaptation Projects by Region 2011

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Commitments for Mitigation Projects

AFD group commitments for mitigation projects by sector 2011

An analysis of carbon footprints for AFD’s 2011 mitigation

project commitments shows that they should help avoid

or reduce 3.8 million tCO2e of emissions per year over

their lifetime. Since 2005, in cumulative terms, AFD Group

funding for mitigation projects should help avoid or reduce

emissions by more than 24 million tCO2e annually.

The energy sector received the largest share of directly-

funded mitigation project commitments (56%), and also

those funded through financial intermediaries (17%), via

bank credit lines for projects promoting renewable energy

and energy efficiency. Commitments for low-carbon urban

transportation projects decreased compared with 2010;

the transportation sector received 11% by value and 3%

by project volume, as several proposals under review were

pushed into 2012. Mitigation project commitments for

the agricultural land and forestry sectors declined from

€120 million for six projects in 2010 to €11 million for

four projects in 2011. Budget support for national climate

plans or policies declined from €545 million in 2010 to

€174 million in 2010.

Mitigation projects by value 2011 (€ million) Mitigation projects by volume 2011

Urban transportation

Carbon funds

Waste management

Carbon sequestration

Renewables

Financial intermediation

Budgetary aid

Energy efficiency

Fuel switch

40%14

4

39%

26%

26%

13%1

3%

11%

411%

411%

38%610

265

174

171

167 15930

21 11

16%

11%

11%

10%10%

2%1% 1%

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North Africa remained nearly the same, despite the uphea-

vals in the region. Mitigation commitments to Latin Ame-

rica and the Caribbean also show few changes. Mitigation

commitments for France’s overseas provinces remained

modest at €17 million. That sum does not reflect some

localities’ steps toward implementing new French energy

and climate adaptation policies, those that emerged from

the so-called Grenelle Environment roundtables.

AFD group commitments for mitigation projects by region 2011

Compared with 2010, regional allocation of 2011 commit-

ments changed more for mitigation than for adaptation.

Contributions to Sub-Saharan Africa and Asia declined.

However, this decrease may have arisen because some

project proposal reviews shifted into 2012, and because

terms and conditions for Asian interventions are being

renegotiated. Conversely, mitigation commitments for

Latin America and Caribbean

Asia and Pacific

North Africa and Middle East

French overseas provincesSub-saharian Africa

Mitigation projects by value 2011 (€ million) Mitigation projects by volume 2011

1234%

7

20%

823%5

14%

39%

31119%

583

37%

39925%

29718%

171%

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Climate Project Examples

Among the 45 climate projects AFD Group committed

to funding in 2011 – either directly or indirectly through

bank credit lines – those dedicated to mitigation included

clean energy projects, such as a solar thermal power plant

in Morocco, a hydropower dam in Panama, and energy-

efficient new building construction in China; sustainable

urban transportation projects, such as a second metro

line in Santo Domingo; and a carbon sequestration project

that featured “agroforestry” farming in rural Madagascar.

Projects dedicated to adaptation mainly focused on better

management of water and other natural resources, such

as repairing and upgrading water systems in Mozambique,

bolstering water infrastructure in Vietnam, and restoring

mangroves along Guinea’s coastline. Adaptation projects

also fostered knowledge about climate change impacts,

such as a climate change database developed in Ethiopia.

In addition, AFD approved two programs to provide general

budget support for national climate plans and policies in

Turkey and in Vietnam.

Carbon Footprints for Bank Credit Lines

The Group indirectly funds climate projects by providing

local and regional banks with dedicated credit lines. The

Group estimates the carbon impacts of these credit lines

in two ways, as commitments and as disbursements:

(1) Commitments in 2011 totaled €150 million for two

credit lines, one for energy efficiency and the other for

renewables; these are projected to reduce or avoid 230

thousand metric tons of carbon dioxide equivalent emis-

sions per year.

(2) Disbursements in 2011 totaled €176 million (out of

€545 million committed in previous years) for seven ener-

gy-efficiency or renewables credit lines in five countries

– China, India, Mauritius, Tunisia and Turkey; these are

projected to reduce or avoid 1.8 million metric tons of

carbon dioxide equivalent emissions per year.

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Beginning in 2012, the Group will determine the carbon

footprint and climate contribution for every proposed pro-

ject during the project review phase (prior to funding appro-

val); highly GHG-emissive projects may be rejected in some

cases, depending on the target country, its level of deve-

lopment, and its policy for fighting climate change. This

criterion combines with others in AFD’s standard impacts

analyses, such as poverty reduction, local employment,

and other social or environmental criteria. ■


For the 2012-2016 period, AFD Group has committed to

achieving three objectives, by combining its ambitious

poverty alleviation and social development projects with

those benefitting climate:

(1) Raising annual funding for climate-related projects to

these levels:

- 50 percent of AFD’s annual foreign aid funding.

- 30 percent of PROPARCO’s annual foreign aid funding.

To achieve these commitments, oversight of the Group’s

climate-related activities will take place before and during

project planning and implementation.

(2) Systematically measuring and monitoring each project’s

carbon footprint.

AFD Group set up a procedure for measuring projects’

carbon footprints in 2011; it aims to gradually increase

the percentage of monitored projects from 70% in 2012

to 100% by 2016.

(3) Selecting projects according to their carbon footprint

and their contribution to fighting climate change.

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Our Commitment to Our People

FD Group’s human resources strategy arti-

culates the organization’s central values:

commitment, integrity, openness and mobi-

lity. These values find their expression in the

Group’s employment policies:

•Providing good working conditions to attract and retain

talented people.

AOur Work Force6.

AFD « 2011 World Meeting » participants

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•Ensuring consistency and transparency in career-buil-

ding and support, encouraging high-quality and ongoing

communications with employees and trade union repre-

sentatives.

•Promoting diversity through special recruiting efforts

that extend equal opportunities to women, older workers

and the disabled.

•Promoting internal parity and equality, particularly

through an increased presence of women in management

positions and by improved hiring, training and integration

of foreign nationals in the AFD field offices.

The Group has formalized these policies in “enterprise

agreements.” These agreements and other labor agree-

ments are further described in the AFD 2011 annual

report.

At the end of 2011, AFD Group counted 2,048 employees71

worldwide, 55 (3%) more than in 2010. Over the last

10 years, the employee roster for AFD, PROPARCO and

CEFEB has expanded by 23%. In that time, employees’

average age has declined; their average skill level has

increased, as have the percentages of women and of

foreign nationals working as managers in AFD field

offices. This actively-promoted effort to create favo-

rable working conditions fosters strong employee loyalty:

121 or fewer employees (6%) leave the company each year.

In accordance with its commitment to exemplary social

responsibility, the Group aims to consolidate its human

resources capital in 2012, following a period of expansion

and increased hiring.

71. This total includes nearly all employees who have transferred to work in French reserve banks in the overseas provinces.

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AFD Group Employee Distribution 2009-2011 Group Employee

* Not including apprentices and interns ** Since 2007, this number includes local and foreign hires and foreign consultants

EMPLOYEE HEADCOUNT End 2009 End 2010 End 2011

France (mainland)* 851 914 955

Field offices 152 159 151

Technical assistants 7 7 6

Transferees 28 23 22

AFD GROUP LOCAL AND FOREIGN EMPLOYEES** 1038 1103 1134

French overseas provinces 102 106 108

Foreign countries** 393 416 439

AFD GROUP LOCAL AND FOREIGN EMPLOYEES** 495 522 547

TOTAL AFD GROUP EMPLOYEES 1533 1625 1681

Reserve bank France employees* 103 104 105

Reserve bank local and foreign employees** 263 264 262

TOTAL RESERVE BANK EMPLOYEES 366 368 367

TOTAL EMPLOYEES MANAGED BY AFD GROUP 1899 1993 2048

AFD Group international volunteers 84 90 75

Reserve bank international volunteers 6 6 3

TOTAL INTERNATIONAL VOLUNTEERS 90 96 78

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Distribution by Geographic Region 2011 (Not including France)

49%

13%

15%

6%17%

North Africa & Middle East

Asia & Pacific

Latin America & Caribbean

French Overseas Provinces

Sub-saharan Africa

49%

13%

15%

6%17%

North Africa & Middle East

Asia & Pacific

Latin America & Caribbean

French Overseas Provinces

Sub-saharan Africa

FRENCH ExPATRIATES LOCAL FOREIGN HIRES INTERNATIONAL

VOLUNTEERS TOTAL AFD GROUP

Sub-Saharan Africa 69 267 44 380 49%

North Africa & Middle East 23 67 7 97 13%

Asia & Pacific 28 77 14 119 15%

Latin America & Caribbean 10 28 8 46 6%

French Overseas Provinces 21 108 1 130 17%

TOTAL 151 547 74 772 100%

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AFD Group’s greatest asset is its highly-qualified work

force. The human resources department strives to offer

the most favorable working conditions possible in order

to attract, retain and motivate talented employees. This

strategy centers on six essential efforts: performance

evaluation, remuneration, benefits, flextime, health and

safety, and equality and diversity.

Working conditions

Performance Evaluation

Several years ago, the Group instituted an annual perfor-

mance review program for all employees. The direct super-

visor interviews each employee and writes an evaluation

based on explicit criteria, assessing the employee’s per-

formance over the year. The performance review allows

managers to recognize employee contributions based

on job descriptions and jointly defined objectives. The

evaluation also determines training priorities and each

employee’s potential for professional growth.

Remuneration

The AFD Human Resources division ensures fair and high-

incentive remuneration for all employees worldwide. It

regularly reviews salary practices in each market, adjusting

a common baseline to fit each country. All employees are

included in the Group’s profit-sharing plan.

Group Employee Turnover 2011

Reasons for leaving AFD Group 2011 Total Employee

turnover rate

Retirement 45 2.2%

Quit 38 1.9%

End of transferee contract 7 0.3%

End of short-term contract 17 0.8%

Departure after trial period 7 0.3%

Dismissal* 4 0.2%

Death 3 0.1%

TOTAL 121 5.9%

Of which the overseas reserve banks 17

*Dismissals usually occur because of physical inability to do job

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Health and Safety

AFD Group takes the health and safety of all of its

employees seriously, wherever they are located. A com-

mittee dedicated to overall occupational health and safety

issues meets at least four times per year. An occupa-

tional safety unit, comprising some of these committee

members along with health and safety office experts and

human resources staff, also meets regularly to prevent

or resolve individual problems. Monthly human resources

meetings permit employee representatives to identify wor-

kers who need medical or psychological attention; the

relevant supervisors are also involved in this procedure.

All employees undergo annual medical and psychological

exams. The Group’s occupational physician prepares an

annual report on health issues that arise during the year,

which is then included in the occupational health and

safety committee’s report. The occupational safety unit

prepares and maintains standards and procedures used

in all locations to protect workers from a variety of risks,

such as terrorism, earthquakes, bird flu and other epide-

mics. If an event occurs that could jeopardize overseas

employee safety, a crisis unit and repatriation protocols

stand at the ready. Additional measures are provided on a

case-by-case basis for local in-country staff members. For

further preventive health care, the Group covers the cost of

vaccinations for employees working and traveling abroad.

Benefits

In 2011, all employees received national health, disability,

life and pension insurance coverage. All employees also

receive supplemental private insurance, provided where

needed by the Group. In particular, locally-recruited staff

members in foreign countries receive the same benefits

as employees working at the Paris headquarters. The

Group pays 100% of the premiums for disability and life

insurance, which covers active and retired employees and

their spouses.

Flextime

AFD Group offers various ways for employees at the

Paris headquarters and CEFEB to modify their working

hours and find a better work-life balance. For example,

employees may choose to work part-time or use a “vaca-

tion-days savings account,” and they also benefit from

France’s 35-hour workweek. They may also work from

home occasionally if their colleagues and manager agree

to that. In AFD field offices in foreign countries, locally-hired

employees enjoy a “French” employment status that allows

them to work 35 hours per week rather than the local

legal limit, which usually averages 37.5. All the Group’s

rules about working hours comply with ILO guidelines.

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responses and actions, especially during major

crises such as armed conflicts, natural catastrophes

and political upheavals. The administrative, human

resources and field office directors help initiate

security procedures and measures as needed. ■

AFD Group General Safety Measures for Employees and Materiel

Many AFD Group employees travel the world,

working with information stored on computers and

online. This makes employee safety and the security of

company data, materials and assets a high priority for

business continuity.

AFD Group’s chief executive regularly emphasizes

the importance of employee safety. In 2010, he signed

a Code of Safety that formalized this for employees

who work in AFD field offices, located in more than

60 countries. The chief executive works with senior

managers from headquarters and the field offices to

review safety measures and security risks. He also

makes a safety guide available to all permanent staff

members via the Group’s intranet; the guide details

procedures for the protection of people, data, and

other assets in specific situations.

Whenever senior management identifies an

unacceptable risk, it immediately responds with

the appropriate measures to reduce or eliminate

it. Risks are ranked by four levels, from low to

major. The occupational safety unit working at the

Paris headquarters constantly monitors risks for

headquarters and all offices. It proposes suitable

Equality, Parity and Diversity

AFD Group endeavors to give all equally-skilled job can-

didates equal access to employment, while paying extra

attention to its commitments to gender parity and diver-

sity. Discrimination is illegal in France, and AFD Group has

never faced judicial action on the subject.

In 2007, after signing a specific labor agreement with

employee trade union representatives, the Group instituted

a policy to actively hire and retain people with disabilities.

This agreement will be renegotiated in 2012; it will aim

to increase hires by outsourcing positions to specialized

job centers that subcontract to the disabled.

As the number of field offices has grown in recent years,

the Group has hired more foreign nationals as mana-

gers and permanent staff members in those offices. The

Group has also hired more young people through so-

called “youth training apprenticeship” or “alternating”

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In 2007, AFD Group signed a preliminary labor agree-

ment to promote employment parity between women

and men. In June 2011, a new agreement reiterated and

updated this commitment. It sets targets to promote the

contracts; the latter allow youth to pursue schooling while

interning with the company during alternating weeks,

months or years. In 2011, five young employees were

hired on youth training contracts and one as an intern.

AFD Group Employee Distribution by Age and Gender 2011 (as of 31 December 2011)

Total: 2,048 (Men = 994 or 48.5% / Women: 1,054 or 51.5%)Average age: 44 (Men: 45.5 / Women: 42.5)

Men Women

52 - 25

10450 25 à 29

192112 30 à 34

162141 35 à 39

130155 40 à 44

143157 45 à 49

163155 50 à 54

116151 55 à 59

3971 60 and +

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Good Labor Relations

AFD Group management considers good relationships and

dialogue with employee and trade union representatives

a central tenet of internal social responsibility. AFD Group

employees are covered by a special collective bargaining

agreement that applies to them alone. In addition, their

rights are protected by trade unions and French labor law.

Foreign nationals working in AFD field offices abroad may

also be covered by their countries’ collective bargaining

agreements for bank and financial institution workers.

The human resources director negotiates major changes to

employment practices or working conditions with the trade

unions and/or through formal consultation with employee

representatives. Major changes – those affecting working

conditions, training, employment, or the running of the

organization – can only come into effect after employee

representatives have had thirty days of information and/

or consultation. These representatives may come from

AFD, PROPARCO, CEFEB, or the overseas reserve banks72

and field offices, because all these Group employees work

professional development of women throughout their

careers, and applies to women employed as “managers”

under French law.

The Group’s target for December 31, 2013 would increase

representation of women at all levels of the company:

•Managers: 50%, up from 43.4% in 2011.

•Senior management (departments and divisions): 33%,

up from 25.4% in 2011.

•Field offices: 28%, up from 22.4% in 2011.

The Group also aims to promote women at the same rate

as men and in proportion to the targeted gender mix at

each level.

In 2012, the Group’s human resources department will

continue efforts to equalize pay between men and women

working in similar jobs. In cases where employees move

to overseas offices, the department will aim to make it

easier for their spouses to work in the country of trans-

fer; such a policy would overcome the main obstacle to

employee geographical mobility.

72. Institut d’Emission des Départements d’Outre-mer, or IEDOM and Institut d’Emission d’Outre-mer, or IEOM.

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CEFEB and the reserve banks collect individual and collec-

tive grievances about applications of labor law, rules, and

representation; they present these issues to managers in

the human resources department.

Four principles underpin AFD Group’s good labor relations:

(1) Constructive dialogue between senior management

and employee representatives propels the Group’s pro-

gress as a whole, since both sides seek to benefit the

collective interest.

(2) Respect for each side’s prerogatives and complemen-

tary roles informs discussions between senior manage-

ment and employee representatives.

(3) Professional negotiations, underpinned by the informa-

tion, training and external support that allow representa-

tives to exercise their mandate.

(4) Anticipation and quick resolution of problems, via the

Group’s tracking of labor-related changes and medium-

term trends..

under AFD contracts, as noted above. The representatives

sit on eight committees, with delegates as follows:

•Five Enterprise Committees, one for AFD and PRO-

PARCO at the Paris headquarters and four for the lar-

ger overseas field offices with more than 50 employees.

These committee representatives express the wishes of

employees concerning the Group’s management, finances,

economics, organization, working conditions, professional

training, and social welfare benefits. They also manage

social and cultural activities for employees and their fami-

lies, underwritten by the Group.

•One Central Work Council. This committee unites repre-

sentatives from the five committees above to review eco-

nomic and financial plans affecting employees covered by

French labor law.

•One AFD Group Committee. This committee unites all

the employee representatives from AFD, PROPARCO, CEFEB

and the overseas reserve banks.

•One AFD Group Occupational Health and Safety Com-

mittee. As mentioned previously, this committee works to

maintain or improve safety, security and working conditions

at AFD and PROPARCO headquarters in Paris, CEFEB in

Marseilles and in the field offices.

•In addition to the above representatives, employee

delegates from AFD Group headquarters, the field offices,

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the Group’s strategy, mission and concerns as well as

the work environment, so that they emerge well-prepared

for the organization’s present and future challenges. In

addition, employees promoted to management positions

receive management training and coaching.

The Group training policy dedicates substantial resources

to teaching and enhancement of foreign language skills.

It also focuses on specific technical skills related to the

Group’s many businesses – banking, finance, economics,

and project management. All employees follow a study

course that teaches core skills related to development aid

and to AFD Group’s role in the French cooperation system.

This “Development Business” track has gradually evolved

a more practical, project-oriented focus through a seminar

dedicated to fieldwork. In 2011 (the third year the seminar

was offered), three groups of employees visited projects

in Benin, Gabon and Réunion.

Building Sustainable Career Paths

Internal and geographic mobility

To retain the talented employees needed to execute AFD

Group’s development aid strategy, the human resources

department encourages internal and geographic mobility;

this helps employees create inspiring careers and gain new

skills. Human resources experts manage each individual’s

career path rather than applying a standard model. This

personalized attention creates better matches between

each employee’s skill set and the organization’s needs.

In 2011, 181 employees at AFD headquarters in Paris chan-

ged jobs within the company, received promotions and/or

took posts abroad. In the field offices, five employees were

promoted internally or stationed elsewhere; in the future,

the Group intends to increase mobility opportunities for

foreign nationals working in the field offices.

Professional Training

AFD Group develops employees’ skills by investing in pro-

fessional training programs above the legally-mandated

level, spending more than 4% of its gross payroll expense

on training, rather than the 1.6% minimum. The Group’s

training policy focuses on the induction of new hires. They

go through several weeks of seminars and activities to

become familiar with the Group’s operations and culture.

The induction process allows new hires to fully understand

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•Increased the Group’s commitment to gender parity in

hiring by signing a second labor equality agreement in June.


(1) Continued enhancement of the talent and diversity of

the Group’s human capital through a recruitment policy

that will:

•Anticipate the skills that needed as aid intervention

strategies evolve.

•Aim for diversity and complementarity among employees.

(2) Continued building of sustainable individual career

paths through the following means:

•Assistance for internal and geographic mobility.

•Easier transfers between AFD, PROPARCO, CEFEB and

the reserve banks.

•Expertise transfers from senior to younger staff mem-

bers through mentoring.

•Strategic planning for work force skills training and

responsibilities.

(3) Additional training and coaching for managers.

(4) Completed redefinition of job descriptions, levels and

salary tables for employees hired in foreign countries. ■

2011 Human Resources Outcomes

To summarize the efforts outlined above, in 2011, the

AFD Group human resources department achieved the

following:

•Improved working conditions for employees hired abroad

by giving them a raise commensurate with France-based

employee salaries. The raise is worth one month’s wages,

known as the “13th month” in France.

•Extended labor relations and dialogue to employee

representatives from all the field offices through the World

Reunion meeting.

The Group “World Reunion” Meeting

In 2009, AFD Group created a new way to forge

work force cohesion and promote inter-employee

communication: the first “World Reunion” meeting.

The event’s goal is to increase cohesion between

employees working at headquarters in Paris and

those in the field offices. Between 2009 and 2011,

all field offices have seen one of their local national

employees attend the four-day seminar in Paris.

These employees share development experiences

from their countries, and in turn hear from

headquarters employees who present the Group’s

strategy and work in other regions. ■

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Managing AFD Group’s Environmental Footprint

s part of its corporate responsibility initiatives,

AFD Group has strategized ways to reduce

the environmental impact of its internal ope-

rations, similar to the “climate strategy” that

governs its external work. The resulting policies and action

plans both manage and reduce the effects of the Group’s

AEnvironmental Responsibility in our Internal Operations

7.

Videoconference between headquarters and field offices

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EnvironmEntAl rEsponsibility in our intErnAl opErAtionsc

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greenhouse gas (GHG) emissions, fossil fuel consump-

tion, and waste production. The action plans largely rest

on carbon footprint measurements, energy audits, and

other environmental impact assessments. Other actions

include raising employees’ awareness about the impor-

tance of sustainable development and environmentally

responsible behavior.

Managing GHG Emissions

AFD Group has conducted annual carbon footprint mea-

surements at headquarters since 2006, and for its entire

office network since 2009. The Group aims to reduce the

greenhouse gas (GHG) emissions generated by all its sites

to one-quarter the current amount by 2050, in accordance

with France’s so-called “Grenelle Factor 4” initiative.

The Group measures and ranks its GHG emissions with a

dashboard-type Carbon Footprint Tool, originally created by

the French Environment and Energy Management Agency73.

The ranking, from least to most significant source of emis-

sions, helps the Group target and reduce the GHG emis-

sions of both buildings and internal operations. Over time,

the Group has improved the original tool by collecting and

using real-life data, testing the data output’s applicability,

73.The original tool is known as the Bilan Carbone®, created by the Agence de l’environnement et de la maîtrise de l’énergie, or ADEME.

AFD Group HQ GHG emissions ranked by source 2011 (tCO2e)

Sources

tCO2 e

Travel

Freight

Purchases

Buildings

Servers

Waste

Energy

14489

4266

3031

730 45736 63

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AFD Group GHG Emissions 2006 to 2011 (tCO2e) (not including field offices)

20072006 2008 2009 2010 201115000

25000

24588

24163

23072

21102

19171

17304

tCO2 e

GHG EMISSIONS MEASURE 2009 2010 2011 VARIATION 2010-2011

AFD Group HQ TeqCO2 24,588 24,163 23,072 -5%

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Purchases appear a more challenging area for direct action,

as the Group cannot fully control suppliers’ manufacturing

or shipping processes.

Avenues to improvement

Managing Business Travel

Although it increased travel by opening field offices in

Mexico and Colombia in 2010, the Group installed video-

conference facilities at headquarters and every field office

in order to reduce intercompany and inter-office travel by

car, train and plane. Employees can remain at their desks

while collaborating with others on the projects they over-

see, participating in steering committee meetings and

roundtables, taking part in training courses, and watching

conferences and debates.

From 2010 to 2011, employees tripled their use of

videoconferencing from 233 to 705 videoconferences.

Employees and management appreciate not only the GHG

reductions videoconferencing offers, but its time-saving

aspects, too. The following table provides a monthly detail

of the 2011 videoconferences initiated at AFD Group head-

quarters and in field offices.

refining the measures and making them more reliable.

Instead of outsourcing the calculation process to the

energy agency, AFD Group now performs its own assess-

ments; this task falls within the remit of the Group’s head

of internal environment. Since 2009, the Group has also

conducted an annual energy audit of its headquarters.

The carbon footprint assessments and energy audits have

quantified the Group’s opportunities to reduce GHG emis-

sions and fight climate change. The primary avenues for

improvement include reduced business travel, increased

energy efficiency and renewables use in Group buildings,

and more carbon offset purchases. The graph below shows

the Group’s GHG emission sources ranked by magnitude.

The timeline shows that GHG emissions grew from 2006 to

2009 as the Group expanded its activities, until it initiated

steps (described below) to reduce and offset emissions

in 2009. From 2010 to 2011, overall GHG emissions

declined by 5% from 24,163 tCO2e to 23,069 tCO2e, as

shown below.

A development finance institution will obviously generate

the greatest single share of its GHG emissions via travel,

as employees move between Paris and other AFD offices,

or travel to and in aid-receiving countries to monitor pro-

jects. In 2011, business travel generated 14,889 tCO2e

of GHG emissions, followed by 4,266 tCO2e generated

by freight and 3,031 tCO2e generated by purchases.

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AFD field offices may also take steps to make environ-

mentally-friendly changes. For example, after seeing the

results of its carbon footprint assessment, the office in

Nouméa, New Caledonia began using shared minivans to

ferry employees between the office and the airport, instead

of using individual cars. However, even with videoconfe-

rencing and other steps, the average distance traveled by

a Group employee was 49,946 kilometers in 2011, gene-

rating 13.12 tCO2e – mostly from plane travel, as seen

in the chart and graph below.

AFD Group Videoconferencing Activity by Month and Location 2011

2011 JAN. FEB. MAR. APR. MAY JUNE JULY AUG. SEPT. OCT. NOV. DEC. TOTAL

HQ (AFD + PROPARCO)

49 64 75 56 75 59 60 22 72 58 59 43 692

Field Offices 1 2 2 0 3 3 0 0 0 2 0 0 13

TOTAL 50 66 77 56 78 62 60 22 72 60 59 43 705

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Employee Car

Commute

Employee Train

Employee Other

Employee Boat

Employee Plane

Visitor, All modes

AFD Group Travel Emissions by Tranportation Mode 2011

1836

9 0 6

12638

0 0

tCO2 e

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Managing Buildings and Computer Servers

As seen above, energy consumption in AFD Group headquar-

ters buildings ranks fifth among the Paris GHG emission

sources; the Group therefore launched a major energy-effi-

ciency drive in 2009 for its headquarters and field offices.

The effort centered on (1) optimizing temperature controls

for heating, cooling and ventilation, (2) replacing fossil

fuels with renewables, and (3) construction to high environ-

mental standards for new offices and employee housing.

This efficiency drive lowered energy consumption from 590

tCO2e in 2010, or 26% of all headquarters emissions,

to 457 tCO2e in 2011, or 20% of the total. The primary

areas of focus included computer servers, building tem-

peratures, alternative energies, and more environmentally-

friendly building practices. All of these efforts paid off in

2011 as shown below, as Group headquarters achieved

a 17% decrease in total energy consumption, including a

21% decrease per employee.

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BUSINESS TRAVEL GHG MEASURE 2009 2010 2011VARIATION 2010-2011

%

HQ and Field Offices Number 66 68 N/A N/A

Total Emissions tCO2e / year N/A 13,312 14,489 9%

Total Distance 1,000 km N/A 51,062 55,160 8%

Total Distance via Airplanes 1,000 km 20,501 22,421 N/A N/A

Emissions / employee tCO2e / employee N/A 12.72 13.12 3%

Distance / employee 1,000 km N/A 48,802 49,946 2%

N/A = not available

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more applications simultaneously while significantly redu-

cing each server’s energy consumption. This lowered the

amount of electricity consumed by Group computer ser-

vers from 114,075 Kw/H in the second quarter of 2010

to 89,109 Kw/H by the first quarter of 2011. In all, server

electricity consumption declined 24%, from 406,822 Kw/H

in 2010 to 306,415 in 2011.

Consolidating Computer Servers

Between 2009 and 2010 – as part of its 2007-2011

strategy to reduce its environmental footprint, energy

dependence and electricity bill – AFD Group reorganized

and consolidated its information technology services. It

increased the power of its Windows and Unix servers,

thereby increasing their capacity to manage data and run

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ENERGY CONSUMPTION MEASURE 2009 2010 2011 VARIATION 2010-2011 (%)

Total Energy/m²

kWh/m²/year(Useable surface*)

N/A 208 172 -17%

Kw/H/m²/year (Total surface)

N/A 245 202 -17%

Total Energy MWh/year 5,312 5,506 4,555 -17%

Total Energy/Employee Kw/H/employee/year 5,896 5,811 4,595 -21%

Total Electricity MWh/year N/A 3,629 3,443 -5%

Total Steam MWh/year 1,743 1,876 1,112 -41%

1. Useable surface does not include utility areas and wall space.

AFD Group HQ Building Energy, Electricity and Steam Consumption 2009-2011

N/A = not available

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Using More Renewable Energy

In accordance with France’s “Grenelle Environment II”

directive to improve energy efficiency in public buildings,

AFD Group has also increased the share of renewables

in its energy mix, via a specific contract with EDF, the

leading energy provider. This effort will include installing

solar water heaters and photovoltaic panels, studying

other renewables options, and constructing or buying more

energy-efficient and environmentally-friendly buildings.

Solar Water Heaters

The Group has launched a program in field offices to

replace 215 inefficient electric water heaters with solar

water heaters as the former units depreciate. Almost all

of the Group’s hot water needs could be met by solar

energy, which would reduce the relevant electricity use by

80% or more.

Photovoltaic Panels and Cells

In 2005, the Group began studying a project to install a

photovoltaic (PV) power generation system at its headquar-

ters, with the first installation phase occurring in Novem-

ber and December 2011. A grid of PV panels covering

almost 170 square meters was overlaid on the buildings’

four gables. A second phase in summer 2012 will inte-

grate semitransparent PV cells in double-paned windows

covering one of the building’s exterior walls. At the same

Improving Lighting and Temperature Controls

The Group also took steps to better control building tem-

peratures in the headquarters and field office buildings.

At headquarters, LED light bulbs replaced conventional

ones in the washrooms, offices and meeting rooms; these

were connected to motion detectors that automatically

turn off lights when no one is present. Window blind ins-

tallation on the southern side of the building reduced

the need for air conditioning in the summer. In the field

offices, the Group’s building and logistics team ran audits

to find sources of wasted energy, and retrofitted buildings

for increased energy efficiency – for example, by adding

insulation, window blinds, awnings or air ventilation, and

changing conventional light bulbs to LED-type ones.

The building and logistics team also brought 1,305 air

conditioning units to desirable standards, replacing those

using ozone-depleting refrigerants outlawed as of 2014

(such as chlorofluorocarbons (CFCs) and hydro-chlorofluoro-

carbons (HCFCs)) with units using non-chlorine refrigerants

(such as R407C and R410); these units should be safer

for the ozone layer. The Group also instructed employees in

better air conditioner use – leaving them off when ambient

internal temperatures are below 26 degrees Centigrade,

and by keeping interior and exterior temperatures within

5-7 degrees Centigrade, as per the recommendations of

the French energy agency.

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to AFD’s low-impact “High Environmental Quality” (HEQ)

specifications. Work is due to be finished at the end of

2012, when the building will be audited to receive its HEQ

certification. Special internal task forces will oversee the

building’s outfitting to ensure it meets AFD’s standards

and recommendations for environmental responsibility.

In 2012-2013, the Group will build two bioclimatic vil-

las for employees working in the Fort-de-France office,

replacing two existing homes. The two residences aim

to be low-carbon with net-zero emissions. Studies now

underway will examine how to best adapt the homes to

their ecosystem, particularly for natural cooling and ven-

tilation. The Group would like to have both buildings cer-

tified HEQ. Since the end of 2011, it has worked with two

organizations, CERQUAL74 and Qualitel, to create and vali-

date the equivalent of HEQ criteria for use in the region;

this will allow HEQ technical requirements for building

materials and construction to conform to local standards.

Carbon Credit Offsets

As an environmentally responsible company, AFD Group

aims to exceed required standards and ultimately achieve

carbon neutrality. Beyond its steps to reduce its environ-

mental footprint, since 2007 the Group has purchased

time, the Group will improve the building’s insulation by

applying new solar panels on the outside. The PV installa-

tions should reduce or prevent 1,685 kilograms of carbon

dioxide emissions each year, while producing more than

16,850 Kw/H of electricity annually.

Renewable Energy Study

In 2012, AFD Group plans to study where and how to ins-

tall renewable energy sources and equipment in the field

offices, such as small wind turbines, PV panels, hydro-

power or biogas generators, and geothermal heat pumps.

The study will analyze technical proposals for their cost

benefits and GHG emission impacts, and will define a plan

for pilot projects to begin in several agencies in 2013.

The Group has already started experimenting with solar

powered lamps and lights in some courtyards and gardens.

Green Buildings

In addition to upgrading to more environmentally-frien-

dly equipment, AFD Group plans to buy an energy-effi-

cient office building in Paris and will build two low-car-

bon homes for employees in Martinique. In 2012, the

Group will advance-purchase an office building in Paris,

the “Mistral,” currently in energy-efficient retrofit according

74. Certification Qualité Logement, or Housing Quality Certification.

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This carbon offset purchase supports the Group’s geo-

graphical mandate for emerging Asia, adds value environ-

mentally, and offers interesting potential for social and

economic development.

Water Conservation

AFD Group has not yet taken active steps to conserve

water. From 2010 to 2011, water consumption dipped

slightly because less was used to cool the headquarters

during a cool summer season.

Food Service

AFD Group has also made a special effort to make its

Paris company cafeteria more environmentally friendly. In

July 2011, the Group signed a three-year contract, inclu-

ding specific environment-oriented clauses, with Eurest, a

foodservice company. These clauses oblige Eurest to keep

its GHG emissions low, give priority to local suppliers and

direct purchases from producers, consume less energy,

and ensure the provenance of food and equipment. Eurest

must also serve certified organic foods and help protect

biodiversity and fisheries by avoiding the use of palm oil

and not serving protected or endangered species, such

as blue fin tuna, blue lingcod or Nile perch.

carbon credit offsets for the GHG emissions generated

by AFD, PROPARCO and CEFEB buildings (excluding other

internal operations) in Paris and Marseilles. From 2007

to 2009, the Group offset 60,000 tCO2e of GHG emis-

sions, or 20,000 annually, by funding distribution of ener-

gy-efficient charcoal cooking stoves in Cambodian cities,

in cooperation with GERES75, a sustainable development

NGO. AFD, through GERES, contributes to economic and

social development and also fights deforestation with

this project. The GERES charcoal project sold more than

364,000 units from 2003 to 2007, stoves used by than

1.4 million Cambodians daily.

At the end of 2011, AFD Group purchased carbon offsets

covering 2010-12 for its Paris headquarters, based on

estimates that the buildings will generate 24,000 tCO2e

of GHG emissions per year, or 72,000 tCO2e over the

three years. This time the Group supported a new pro-

ject, “SD Biosupply,” run by EcoAct, a company speciali-

zing in carbon finance and offset mechanisms that follow

the verified carbon standard. SD Biosupply will produce

biogas (methane) by installing an anaerobic wastewater

treatment plant for a tapioca processor in Thailand. The

factory will use this biogas for manufacturing energy, thus

avoiding fossil fuels and reducing its carbon footprint.

75. Groupe Energies Renouvelables, Environnement et Solidarités, or Renewable Energy, Environment and Solidarity Group.

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Ordinary trash and wastepaper

- Sorting: The Group makes double-compartment waste-

baskets available to all headquarters employees for sor-

ting their wastepaper and other trash as they discard it.

Maintenance workers appropriately dispose of the sorted

trash in city facilities.

- Reducing paper consumption: The Group keeps track

of the amount of paper each employee uses for printing

and photocopying, combining this amount with nine other

factors used to calculate annual bonus payments. To help

employees reduce their paper consumption, all photoco-

piers and printers are set to print two sides automatically.

Managing Waste

For the past several years, AFD Group has worked to reco-

ver and recycle paper and its other waste products. It must

further reduce waste production and increase recycling to

comply with the Grenelle Environment II guidelines. For

comparison, the French produce more than 390 kilograms

(kg) of waste per person annually, at home and work; an

AFD Group employee generates 201 kg of waste at work

in 2011. The Group has reduced waste production by 6.7%

from 2009 to 2011 – despite an increase of activity – via

the following steps:

AFD Group HQ Water Consumption by Employee and Overall 2009-2010

WATER MEASURE 2009 2010 2011 VARIATION 2010-2011 (EN %)

Water consumption per employee

m3/employee/year 13 12 11 -8%

Liter/employee/day 63 58 53 -8%

CONSOMMATION TOTALE D’EAU M3/YEAR 11,458 11,317 10,787 -5%

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PAPER MEASURE 2010 2011 VARIATION 2010-2011 (%)

Total Consumption (all paper)1 Ton/year 65 68 5%

Total consumption all paper / employee2 Kg/employee/year 62 62 0%

Consumption ream and white paper /employee Kg/employee/year 45 44 -1%

White paper Ton/year 37 40 8%

Ream white paper/employee Ream/employee/year 16 16 0%

White paper/employee Kg/employee/year 39 41 5%

Printed matter Ton/year 22 24 9%

Percent recycled/employee % 39 no change N/A

1. Consumption of first-use white paper, other paper and printed matter (publications)2. Consumption of white paper and other types, not including printed matter

AFD Group HQ Paper Consumption by Type, Ton and Employee 2010-2011

N/A = not available

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Electronics and Hazardous Waste

- Computer hardware: As computer equipment depreciates,

the AFD Group IT, Buildings and Logistics department will

donate some working components from headquarters and

field offices; these units go to charities and schools who

respond to a call for takers. Other electrical and electronic

equipment goes to a company that hires French disabled

workers to refurbish and disassemble electronics; this

contributes to both waste reduction and social inclusion.

- Collection and treatment of batteries and CDs: At Group

headquarters, two convenient collection points permit AFD

and PROPARCO employees to dispose of their batteries

and compact discs. Two organizations collect these mate-

rials – ATF Gaia, 80% of whose employees have disabilities,

and a manufacturers’ recycling service, SCRELEC, whose

specialty is collecting and processing used batteries. The

companies ship the materials to specialized waste pro-

cessing centers for sorting, recycling and recovery.

- Recycling ink and toner cartridges: AFD Group also reco-

vers ink and toner cartridges used at its headquarters and

sends them for recycling, mailing them to the manufacturer

in preaddressed boxes. The manufacturer is a member

of the French Conibi consortium of computer and printer

manufacturers, which manages the return and recycling

program.

In 2011, employees also received larger computer screens

to make it easier to read documents onscreen. A French

worker consumes between 70 and 85 kg of paper per

year, while AFD Group employees in 2011 averaged less

than that – 62 kg per person of paper and printed matter.

- Paper recycling: At PROPARCO, a company specializing

in shredding and recycling confidential papers (Shred-It)

collects such waste separately. In 2011, PROPARCO recy-

cled 2120 kg of paper, saving 53 trees. The Group’s first-

use paper is 75-gram recycled, as certified by the Forest

Stewardship Council.

- Food composting: Several field offices have set up com-

posting units for food waste, following the example of the

Accra office in Ghana, whose director put such a unit in

his home.

- Operation “clean house”: In 2011, AFD cleaned out fif-

teen years’ accumulation from its basement storage with

help from APR2, a specialist in electrical and electronics

disposal. The Group ensured the recovery, recycling and

refurbishing of equipment and papers retrieved from a

32,000 kg pile of used furniture, archives, and obsolete

electrical and electronic equipment.

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Waste Management Overhaul

In 2011, waste management took a central place in the

Group’s internal discussions. Although the Group had

launched many waste reduction and recycling initiatives,

individual departments managed several of them and no

one had an overview of all the efforts. In the second half

of 2011, the Group held discussions with those depart-

ments to centralize information and develop an overview

of the situation.

The overview is the first step in an audit of the Group’s

waste management practices. This audit will ensure the

tracking of all Group inputs through the entire product life-

cycle, from the source through recovery and recycling. The

audit will also serve as the basis for the next step: a 2012

redesign of existing waste management systems, including

new multi-level sorting systems at AFD and PROPARCO

headquarters in Paris. The third step will expand the sorting

system to the field offices, adapting it to local conditions.

AFD Group HQ Waste and Trash Production by Type, by Employee and Overall 2009-2010

WASTE MEASURE 2009 2010 2011 VARIATION 2010-2011

Total Volume Ton/year 201 197 199 1%

Household-type trash* Ton/year N/A 169 171 1%

Production/employee Kg/employee N/A 201 201 0%

* Includes food waste N/A = not available

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procedures manual, (3) integrating consistent environmen-

tal and social clauses in updated tenders, and (4) adequa-

tely monitoring suppliers’ compliance with these clauses.

Raise Awareness About “Green” Behavior

In addition to the steps described above, AFD and PRO-

PARCO work to raise awareness – both among employees

and the public – about issues central to sustainable deve-

lopment. In particular, the Group steers employees to

reduce their environmental impacts in the ways mentioned

above – managing waste and reducing paper consumption;

it also educates employees about organic farming, pro-

tecting forests, and other current environmental issues.

The Group also organizes and participates in national and

international events, such as France’s Sustainable Deve-

lopment Week in April and the European Week for Waste

Reduction in November (see below). These efforts follow

France’s national sustainable development strategy, along

with the “exemplary state” action plan that the Grenelle

Environment II recommended for public institutions and

administrators.

Beyond raising internal awareness about waste, energy

and natural resource management, AFD Group organizes

conferences and debates about corporate responsibility

Responsible Purchasing

Acting on the truism that the best waste is that which we

never produce, AFD Group attacks the source of the pro-

blem: its office-supply vendors reduce excess paper, plastic

and cardboard packaging by delivering only bulk-wrapped

products to the Paris headquarters. Similarly, rational and

sustainable management of forests informs the Group’s

office-supply purchasing policy. Thus 59% of the paper

that the Group purchased for headquarters in 2011 was

chlorine-free recycled ream paper, certified by the Forest

Stewardship Council as originating in sustainably-managed

forests. In addition, the Group requires all its electrical

and electronic equipment to carry an Energy Star label.

In 2011 and continuing into the first quarter of 2012, AFD

Group began upgrading its purchasing department prac-

tices. Under the supervision of the Group head of internal

environment, the new program extends the scope and

systematizes procurement of sustainably and responsibly

produced products, following guidelines set by France’s

so-called “exemplary state” position paper of 200876.

The program covers four areas: (1) training buyers in the

latest procurement standards and regulatory requirements,

(2) updating the purchasing department’s administrative

76. See full text of the circular (in French) on http://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000020243534

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The 2011 European Week for Waste Reduction

During the 2011 European Week for Waste Reduction

(EWWR), 21 November to 2 December, AFD

and PROPARCO joined the French Environment

and Energy Management Agency (ADEME) in

a campaign to foster national and internal waste

prevention awareness. Across Europe, the European

Commission supports the EWWR campaign with

its LIFE + program, a financing facility dedicated to

protecting the environment.

The Group’s participation in the campaign

is a response to France’s stringent “Grenelle

Environment II”78 law, which emphasizes the broader

responsibilities of waste producers. The law uses

the so-called “polluter-pays” principle to increase

consumer and corporate control of environmental

and health risks at the end of a product’s life. During

the EWWR week, the Group organized a first-of-its-

kind test project within AFD and PROPARCO; this

aimed to focus employee attention on waste issues

and to gauge their interest in environmental concerns

and actions, such as the April 2012 Sustainable

Development Week in France. ■

and sustainable development77. In 2011, it pursued par-

tnerships with the French Club of Public Institutions for

Sustainable Development; it also discussed environmen-

tal responsibility strategies in France’s overseas provinces,

with property management companies in which the Group

holds an equity interest.

77. In French, Club des établissements publics pour le développement durable.

78. French Law No. 2010-788 of 12 July 2010.

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•Updated procurement procedures and inclusion of

corporate responsibility clauses in standard supplier

contracts.

•Monitoring of supplier contracts with high environmen-

tal impacts.

•Developing means for micro- and small-size businesses

to respond to Group tenders.

(4) Expansion of environmentally responsible projects in

the field offices in 2012-2013.

•Improvement in field office ownership of environmental

stewardship issues; bolstering their performance (accor-

ding to each national context) through more responsible

purchasing, recycling, energy efficiency, renewable energy

use, and carpooling.

(5) Communicate about internal environmental responsi-

bility in 2012-2013.

•Raising employee awareness during France’s Sustai-

nable Development Week and the European Week for

Waste Reduction. ■


(1) Increase energy efficiency and use of renewables in

Group buildings in 2012-2013.

•Increased use of PV panels and equipment at Group

headquarters.

•Completed upgrade of insulation at Group headquar-

ters.

•Studies on use of renewables for field offices.

•Use of high-efficiency and high environmental quality

specifications in buildings purchased or renovated by the

Group.

(2) Waste management in 2012-2013.

•Assessment of headquarters waste management, mat-

ching products with sources for recovery and recycling.

•Establishing guidelines for a multi-channel waste sor-

ting and management system at headquarters.

(3) Increase responsible purchasing in 2012-2013.

•Educating the Group purchasing unit about sustainable

procurement.

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Our Method8. Inspired by the Global Reporting Initiative Framework

o create the indicators for corporate res-

ponsibility actions presented in this inaugu-

ral report, AFD Group drew on guidelines set

out by the Global Reporting Initiative (GRI). All

the information presented reflects the Group’s continuing

commitment to improve transparency and, consequently,

T500

1000

1500

2000

2500

2005 2006 2007 2008 2009 2010 2011

Millions €

17

38

49

72 70

43

18

105 | 132

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For more information on the method used to create this

report, please contact Jean-Louis Lecouffe on lecouffejl@

afd.fr or telephone France +331-53-44-30-46, or write him

care of AFD, 5 Rue Roland Barthes, 75598 Paris CEDEX

12, France.

stakeholders’ grasp of its environmental, social and gover-

nance responsibility practices. This report was first presen-

ted in early 2012 to three committees: the AFD Group Exe-

cutive Board, the Management Board and Central Works

Council. It was then relayed to all employees during the

annual Group meeting, attended by field office directors

as well as management and executives from AFD, PRO-

PARCO, CEFEB and the reserve banks at the Group’s Paris

headquarters.

The qualitative and quantitative data in this report was

collected and consolidated as per the Group’s administra-

tive procedures. According to the evaluation methodology

recommended in the GRI guidelines, this self-declared

assessment with no outside, third-party verification rates as

a B-level application. AFD Group will use third-party verifica-

tion for this 2011 corporate responsibility report in 2012.

All information in this report complies with French regula-

tions, including provisions relating to the so-call Law on

New Economic Regulations78, described in the introduction

to this report and in the AFD Group registration document.

79. Nouvelles Régulations Economiques, or NRE.

106 | 132

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In this report, whenever a measure or indicator did not

cover the report boundary or scope for social or environ-

mental data, the substitute boundary or scope was noted

and the reason for a partial or different measure or indica-

tor explained. For example, when 2011 quantitative data

were not available at report publication time, 2010 data

were used instead (and identified as such).

Reporting Period

This report covers the period from January 1 to Decem-

ber 31, 2011, as well as some data and events from pre-

vious years that are useful for understanding AFD Group’s

operating context and trends. This report also includes

discussion of some important actions from early 2012.

Report Scope and Boundaries

The economic and governance data contained in this report

covers the following boundaries (parameters):

•French government officials.

•Direct and indirect beneficiaries of AFD and PROPARCO

funding and other works;

•Suppliers for internal and external operations.

•Group employees.

The social and labor data cover these boundaries:

•Group employees, including international volunteers

and those working for the overseas reserve banks (but

not youth contract workers).

•Suppliers and business services providers.

The environmental data covers:

•Buildings in Paris and Marseilles occupied by AFD,

PROPARCO and CEFEB.

•Buildings in France’s overseas provinces and in emer-

ging and developing countries occupied by the field offices

or their employees.

107 | 132

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N°GRI PERFORMANCE INDICATOR REFERENCE BOUNDARy COMMENT

1. STRATEGY AND ANALYSIS

1.1.

Statement from the most senior decision maker of the organization about the relevance of sustainability to the organization and its strategy.

Letter from the AFD Group CEO

Group

1.2.Description of key impacts, risks, and opportunities.

Letter from the AFD Group CEO – and in each subject inPart 1 / Governance

Group

2. ORGANIZATIONAL PROFILE

2.1. Name of the organization. Annual reports Group

2.2. Primary brands, products, and/or services. Annual reports Group

2.3.Operational structure of the organization,including main divisions, operating companies,subsidiaries, and joint ventures.

Annual reports Group

2.4. Location of organization’s headquarters. Annual reports Group

2.5.

Number of countries where the organizationoperates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.


2.6. Nature of ownership and legal form. Annual reports Group

GRI Indicator Index

108 | 132

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2.7.Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).


2.8.

Scale of the reporting organization, including:• Number of employees;• Number of operations;• Net sales (for private sector organizations) ornet revenues (for public sector organizations);• Total capitalization broken down in termsof debt and equity (for private sectororganizations); and • Quantity of products or services provided.• Total assets;• Beneficial ownership (including identity andpercentage of ownership of largest shareholders);and• Breakdowns by country/region of the following:• Sales/revenues by countries/regions thatmake up 5 percent or more of total revenues;• Costs by countries/regions that make up 5percent or more of total revenues; and• Employees.

Annual reports Registration document

Group

GRI Indicator Index

109 | 132

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2.9.

Significant changes during the reporting period regarding size, structure, or ownership including:• The location of, or changes in operations,including facility openings, closings, andexpansions; and• Changes in the share capital structure andother capital formation, maintenance, andalteration operations (for private sector organizations).

Annual reportsRegistration document

Group

2.10 Awards received in the reporting period.Annual reports

Group

3. REPORT PARAMETERS

3.1. Reporting period for information provided. Part 7 / Method Group

3.2. Date of most recent previous report (if any). Not applicable Group

3.3. Reporting cycle (annual, biennial, etc.) Part 7 / Method Group

3.4.Contact point for questions regarding the report or its contents.

Part 7 / Method Group

GRI Indicator Index

110 | 132

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3.5.

Process for defining report content, including:• Determining materiality;• Prioritizing topics within the report; and• Identifying stakeholders the organization expects to use the report.Include an explanation of how the organization has applied the ‘Guidance on Defining Report Content’, the associated Principles and the Technical Protocol – Applying the Report Content Principles.


3.6.

Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).See GRI Boundary Protocol for further guidance.


3.7.

State any specific limitations on the scope or boundary of the report. If boundary and scope do not address the full range of material economic, environmental, and social impacts of the organization, state the strategy and projected timeline for providing complete coverage.

Introduction to ESG reportingPart 7 / Method

Group

GRI Indicator Index

111 | 132

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3.8.

Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

Not applicable Group

3.9.

Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report.

In each subject GroupThe data measurement technique is indicated in each table or graph.

3.10.

Explanation of the effect of any re-statementsof information provided in earlier reports, andthe reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

Not applicable. Group

3.11.Significant changes from previous reportingperiods in the scope, boundary, or measurement methods applied in the report.

Not applicable. Group

GRI Indicator Index

112 | 132

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3.12.

Table identifying the location of the StandardDisclosures in the report.Identify the page numbers or web links where the following can be found:• Organizational Profile 2.1 – 2.10;• Report Parameters 3.1 – 3.13;• Governance, Commitments, and Engagement 4.1 – 4.17;• Disclosure of Management Approach, per category;• Core Performance Indicators;• Any GRI Additional Indicators that wereincluded; and• Any GRI Sector Supplement Indicators included in the report.

Part 7 / Method / GRI Indicator Index

Group

GRI Indicator Index

113 | 132

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3.13.

Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s).

Part 7 / Method /Third-party Validation

Group

4. GOVERNANCE, COMMITMENTS AND ENGAGEMENTS

4.1.

Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

Annual reportsRegistration document / Governance

Group

Also available online on theLégifrance website / Article R516.13 of the French Financial and Monetary Code.

4.2.

Indicate whether the Chair of the highestgovernance body is also an executive officer(and, if so, their function within the organization’s management and the reasons for this arrangement).

Annual reportsRegistration document / Governance

GroupThe presidents of AFD and PROPARCO do not have an executive function.

GRI Indicator Index

114 | 132

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4.3.

For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are independent and/or non-executive members.

Annual reportsRegistration document/ Governance

Group

4.4.

Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.Include reference to processes regarding:• The use of shareholder resolutions or other mechanisms for enabling minority shareholders to express opinions to the highest governance body; and • Informing and consulting employees about the working relationships with formalrepresentation bodies such as organizationlevel ‘work councils’, and representation of employees in the highest governance body.Identify topics related to economic, environmental, and social performance raised through these mechanisms during the reporting period.

Registration document / Governance

Group

GRI Indicator Index

115 | 132

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4.5.

Linkage between compensation for membersof the highest governance body, senior managers, and executives (including departurearrangements), and the organization’sperformance (including social and environmental performance).

Registration document / Governance Group

Nonexecutive directors are unpaid government appointees, except for the chairman of the board of governors who receives compensation unrelated to the organization’s financial performance. Incentive schemes for all AFD and PROPARCO employees, including senior managers and executives; scheme takes paper consumption into account.

4.6.Processes in place for the highest governance body to ensure conflicts of interest are avoided.


Group

Details for AFD are also available from: State Council/ Commission for the transparency of political life; and the auditors’ report on regulated agreements.Details for PROPARCO are available in an internal document: the Code for nonexecutive directors and members of the Advisory Investment Committee and Audit Committee which is signed by the directors

GRI Indicator Index

116 | 132

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4.7.

Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees, including any consideration of gender and other indicators of diversity.


Group

Nonexecutive directors are appointed by the French government.Prudential supervisors require this information, including information directors’ backgrounds. If needed the French Court of Auditors verifies the information.Internal Document:“Directors’ Code”PROPARCO applies corporate banking law in this process.

4.8.

Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.Explain the degree to which these:• Are applied across the organization in differentregions and department/units; and• Relate to internationally agreed standards.

Part 2 / Anti-fraud and CorruptionPart 1 / ESG Policy Goals / Code of Business Ethics

Group

Internal document: “IT Code” (And Code of Business Ethics, and Code of Conduct)

GRI Indicator Index

117 | 132

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4.9.

Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles. Include frequency with which the highest governance body assesses sustainability performance.

Group

AFD publishes an annual communiqué for the board of governors. PROPARCO will do so in the near future.

4.10.

Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.


Group

Some directors hold highly-qualified positions leading environmentally or socially oriented organizations, such as France Nature Environnement.

COMMITMENTS TO ExTERNAL ENGAGEMENTS

4.11.

Explanation of whether and how the precautionary approach or principle is addressed by the organization.Article 15 of the Rio Principles introduced the precautionary approach. A response to 4.11 could address the organization’s approach to risk management in operational planning or the development and introduction of new products.

Annual report / Risk management

Group

AFD is certified by the French institute of independent internal It follows banking rules and regulations during project review and implementation. PROPARCO has an audit committee to review internal controls. Internal and portfolio risks are separated.AFD Group created a Risk division.

GRI Indicator Index

118 | 132

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4.12.

Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses. Include date of adoption, countries/operations where applied, and the range of stakeholders involved in the development and governance of these initiatives (e.g., multi-stakeholder, etc.).Differentiate between non-binding, voluntary initiatives and those with which the organization has an obligation to comply.

Part 1 / Introduction to ESG ReportingPart 3 /Stakeholder Engagement/ Promoting Corporate Governance in the Private Sector / Box

Group

GRI Indicator Index

119 | 132

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4.13.

Memberships in associations (such as industry associations) and/or national/ internationaladvocacy organizations in which the organization:• Has positions in governance bodies;• Participates in projects or committees;• Provides substantive funding beyond routinemembership dues; or• Views membership as strategic. This refers primarily to member-ships maintained at the organizational level

Part 3 / Stakeholder Engagement / Promoting Corporate Governance in the Private Sector/ Encadré

Group

STAKEHOLDER ENGAGEMENT

4.14.

List of stakeholder groups engaged by the organization, e.g.• Civil society;• Customers;• Employees, other workers, and their tradeunions;• Local communities;• Shareholders and providers of capital; and• Suppliers.

Part 3 / Stakeholder InteractionsPart 3 / Stakeholder Engagement / Stakeholder Identification

Group

GRI Indicator Index

120 | 132

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4.15.

Basis for identification and selection of stakeholders with whom to engage. This includes the organization’s process for definingits stakeholder groups, and for determining the groups with which to engage and not to engage.

Part 3 / Stakeholder Engagement

Group

4.16.

Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.This could include surveys, focus groups, community panels, corporate advisory panels, written communication, management/union structures, and other vehicles. The organization should indicate whether any of the engagement was undertaken specifically as part of the report preparation process.

Part 3 / Stakeholder Engagement / Accountability

GroupEngagement with the NGO, Coordination Sud, is a notable example.

4.17.

Key topics and concerns that have been raisedthrough stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

Part 3 / Stakeholder Engagement

Group

GRI Indicator Index

121 | 132

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GRI Indicator Index | Economic performance


DISCLOSURE ON MANAGEMENT APPROACH – ECONOMIC P. 10

EC2Financial implications and other risks and opportunities for the organization’s activities due to climate change.

Part 6 / Managing AFD Group’s Environmental Footprint / Carbon Credit Offsets

Group

EC3Coverage of the organization’s defined benefit plan obligations.

Part 5 / Our Work Force/ Working Conditions

Group

EC4Significant financial assistance received from the government.

Annual reportsRegistration document

Group

The French government gave €650 million to AFD Group in 2011 to subsidize external aid operations, not internal operations. AFD carefully assesses all grant project applications when distributing these funds, particularly with regard to the purpose of a project.

DIRECT AND INDIRECT ECONOMIC IMPACTS

EC9*Understanding and describing significantindirect economic impacts, including theextent of impacts.

Annual report / Our Business Activity / Potential impacts of our financing decisions

Group

122 | 132

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DISCLOSURE ON MANAGEMENT APPROACH – ENVIRONMENT P. 12

MATERIALS

EN1 Materials used by weight or volume.Part 6 / Managing AFD Group’s Environmental Footprint/ Waste Management Overhaul

AFD and PROPARCO headquarters

EN2Percentage of materials used that are recycled input materials.

Part 6 / Paper Consumption table


ENERGY

EN3 Direct energy consumption by primary energy source.Part 6 / Using More Renewable Energy


EN5Energy saved due to conservation and efficiency improvements.

Part 6 / Using More Renewable Energy


EN6*

Initiatives to provide energy-efficientor renewable energy based productsand services, and reductions in energy requirements as a result of these initiatives.


Group

EN7*Initiatives to reduce indirect energy consumption and reductions achieved.


Group

GRI Indicator Index | Environnemental performance

123 | 132

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GRI Indicator Index | Environnemental performance


WATER

EN8 Total water withdrawal by source. Part 6 / MeasuresAFD and PROPARCO headquarters

BIODIVERSITY

EN14Strategies, current actions, and future plans for managing impacts on biodiversity.

Part 6 / Using More Renewable Energy/ HQ Operations

Group

EMISSIONS, EFFLUENTS AND WASTE

EN16Total direct and indirect greenhouse gas emissions by weight. (tCO2e)

Part 6 / Business Travel and Measures Group

EN18Initiatives to reduce greenhouse gas emissions and reductions achieved.

Part 6 / Carbon Credit Offsets Group

EN22 Total weight of waste by type and disposal method.Part 6 / Waste Management Overhaul and Measures


EN26Initiatives to mitigate environmental impactsof products and services, and extent of impact mitigation.

Part 6 Group

EN29*

Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the work force.

Part 6 Group

124 | 132

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GRI Indicator Index | Labor practices and decent work


DISCLOSURE ON MANAGEMENT APPROACH – PRACTICES AND DECENT WORK P. 13

EMPLOYMENT

LA1Total work force by employment type, employment contract, and region.

Part 5 / ESG Scope and Objectives

Group

LA2Total number and rate of new employee hires and employee turnover by age group, gender, and region.

Part 5 / Employee turnover

Group

LA3*Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation.

Part 5 / Remuneration

Group

LABOR / MANAGEMENT RELATIONS

LA4Percentage of employees covered by collective bargaining agreements.

Part 5 / Employee representatives

Group

LA5Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements.

Part 5 / Employee representatives

Group

OCCUPATIONAL HEALTH AND SAFETY

LA8

Education, training, counseling, prevention, and risk-control programs in place to assist work force members, their families, or community members regarding serious diseases.

Part 5 / Health and Safety

Group

125 | 132

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LA9Health and safety topics covered in formal agreements with trade unions.

Part 5 / Health and Safety

Group

TRAINING AND EDUCATION

LA11*Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

Part 5 / Professional training

Group

LA12*Percentage of employees receiving regular performance and career development reviews.

Part 5 / Building Sustainable Career Paths

Group

GRI Indicator Index | Employment

126 | 132

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GRI Indicator Index | Human rights


DISCLOSURE ON MANAGEMENT APPROACH – HUMAN RIGHTS P. 14

PROCUREMENT AND INVESTMENT PRACTICES

HR1

Percentage and total number of significantinvestment agreements and contracts that include clauses incorporating human rights concerns, or that have undergone human rights screening.

Part 2 / Anti-fraud and corruption

Group

NON-DISCRIMINATION

HR4Total number of incidents of discrimination and corrective actions taken.

NA Group No incidents.

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

HR5

Operations and significant suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and actions taken to support these rights.


CHILD LABOR PROHIBITION

HR6

Operations and significant suppliers identified as having significant risk for incidents of childlabor, and measures taken to contribute to the effective abolition of child labor.

Part 2 / Ethics CodeCharte Ethique Group

Updating of procurement procedures is planned for 2012, following a responsible purchasing policy.

127 | 132

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FORCED OR COMPULSORY LABOR ABOLITION

HR2Percentage of significant suppliers,contractors, and other business partners thathave undergone human rights screening, and actions taken.

Part 6 / Responsible Purchasing Policy

Group

HR7

Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor.

Part 6 / Responsible Purchasing Policy

Group

SECURITY PRACTICES

HR8*

Percentage of security personnel trainedin the organization’s policies or proceduresconcerning aspects of human rights that are relevant to operations.

Part 5 / Managing AFD Group’s Environmental Footprint/ Security

Group

In 2010, security procedures were implemented in the field offices. Headquarters has a security procedure that involves 65 director, 34 employees in the employee health and safety department, and contractors for building security.

INDIGENOUS RIGHTS

HR9*Total number of incidents of violations involving rights of indigenous people and actions taken.


GRI Indicator Index | Human rights

128 | 132

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GRI Indicator Index | Society


DISCLOSURE ON MANAGEMENT APPROACH – SOCIETY P. 15

COMMUNITIES

SO1

Percentage of operations with implemented local community engagement, impact assessments, and development programs.

Part 4 / Group

CORRUPTION

S02Percentage and total number of business units analyzed for risks related to corruption.

Part 2 / Group

All projects are subject to funding agreements that contain strict anti-corruption clauses, politically exposed persons checks, anti-terrorism financing and money-laundering controls.

S03Percentage of employees trained inorganization’s anti-corruption policies and procedures.

Part 2 / Anti-corruption / Online learning

Group

S04Actions taken in response to incidents ofcorruption..

Group No corruption incidents.

PUBLIC POLICIES

S05Public policy positions and participation in public policy development and lobbying.

Part 3 / Stakeholder Engagement / Knowledge production

Group

Contribution to debates and progress through knowledge production, particularly conferences and debates about sustainable development.

129 | 132

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S06*

Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country.

RAS Group No contributions.Internal controls and audits ensure none.

ANTI-COMPETITIVE BEHAVIOR

S07

Total number of legal actions for anticompetitivebehavior, anti-trust, and monopoly practices and their outcomes.

NA GroupNo legal actions.Systematic application of European Union rules for tenders.

COMPLIANCE

S08

Monetary value of significant fines and total number of non-monetary sanctions for noncompliance with laws and regulations.

NA Group No sanctions or fines.

GRI Indicator Index | Society

130 | 132

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GRI Indicator Index | Product Responsibility Performance

N°ISO N°GRI PERFORMANCE INDICATOR REFERENCE BOUN-DARy COMMENT

DISCLOSURE ON MANAGEMENT APPROACH – PRODUCT RESPONSIBILITY P. 16

CONSUMER HEALTH AND SAFETY

PR1

Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

Part 4 / Project performance evaluation

GroupThe health and safety aspects of external aid operations are included in ex-ante evaluations.

131 | 132

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GRI Indicator Index | Financial services performance supplement


PRODUCT PORTFOLIO

FS2Procedures for assessing and screening environmental and social risks in business lines.

Part 4 / Project performance evaluation

Group

FS4

Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines.

Part 4 / Environmental & Social Support

Group

FS5Interactions with clients/investees/business partners regarding environmental and social risks and opportunities.

Part 4 / Environmental & Social Support

Group

FS6Percentage of the portfolio for business lines by specific region, size (e.g. micro/SME / large) and by sector.

Annual reports Group Broken down by region.

FS7

Monetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose.

Part 4 / Examples GroupPlans underway to categorize all aid operations following these criteria.

FS8

Monetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose.

Part 4 / Examples GroupPlans underway to categorize all aid operations following these criteria.

132 | 132

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Abbreviations

ADEME: Agence de l’Environnement et de la Maîtrise de l’Energie / Environment and Energy Management Agency (France)

AFD: Agence Française de Développement / French Development Agency

CEFEB: Centre d’Etudes Financières, Economiques et Bancaires / Center for Financial, Economic and Banking Studies

EDFI: European Development Finance Institutions

EIB: European Investment Bank

E&SS: Environmental and Social Support

FGEF: French Global Environment Facility

GERES: Groupe Energies Renouvelables, Environnement et Solidarités / Renewable Energy, Environment and Solidarity Group

GHG: Greenhouse gas

GRI: Global Reporting Initiative

HEQ: High Environmental Quality

ILO: International Labour Organisation

IMS: Institut du Mécénat de Solidarité / Institute for Solidarity Giving

ISO: International Organization for Standardization

KfW: Kreditanstalt für Wiederaufbau Bankengruppe

LED: Light Emitting Diode

NGO: Nongovernmental Organization

OECD Organisation for Economic Co-operation and Development

OHSAS: Occupation Health and Safety Assessment Series

PCF: People’s Credit Fund

PFCE: Plateforme pour le Commerce Equitable / Fair Trade Platform

PROPARCO: Société de Promotion et de Participation pour la Coopération Economique / Investment and Promotions Company for Economic Cooperation

SER: Social and Environmental Responsibility

UN: United Nations

http://www2.ademe.fr/servlet/getDoc?id=11433&m=3&cid=96



http://www.afd.fr/home

http://www.afd.fr/home

http://www.cefeb.org/site/cefeb



http://www.edfi.be/

http://www.geres.eu/



https://www.globalreporting.org/languages/French/Pages/default.aspx

http://www.imsentreprendre.com/

http://www.imsentreprendre.com/

http://www.iso.org/iso/fr/home.htm

http://www.kfw.de/kfw/de/I/II/Download_Center/Foerderprogramme/versteckter_Ordner_fuer_PDF/Summary_Franzoesisch_2012_02.pdf

http://www.commercequitable.org/

http://www.commercequitable.org/

http://www.proparco.fr/site/proparco/Accueil_PROPARCO



CSR Report 2011

Documents

environmental responsibility

internal governance

governance issues

corporate ethics

contentsthe afd group

governance reportingpart

governance responsibilitypart

afd group chief executivepart