AFD - 2018 Registration document

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STATEMENT OF NON-FINANCIAL PERFORMANCE

Managing the risks and impacts of our action

2.4.2 Management of environmental and social impacts at Proparco Proparco also establishes an environmental, social and governance risk management process through a system (1) similar to that of AFD, which is also inspired by the best practices of International Financial Institutions. Its approach relies on the performance standards of the IFC, the international labour standards of the ILO, the FAO guidelines for land use, and the fundamental principles of the Universal Declaration of Human Rights. It consists in (i) assessing the environmental and social risks and impacts of each project presented to Proparco’s decision-making bodies and the measures provided by funding recipients to address these risks and impacts; (ii) proposing additional measures to be implemented by clients in order to limit these risks or offset their effects; (iii) monitor the implementation of these measures during the execution of the operation; (iv) ensure the project’s proper management of unforeseen events with negative environmental and/or social impacts; and (v) where applicable, support the client with improving their ability to manage and implement environmental, social and governance performance. The implementation of environmental, social and/or governance recommendations is monitored by the calculation of indicators that are regularly produced and managed by Proparco teams. ❙ Environmental and social risks in the Proparco portfolio 2018, in number of projects signed (EE)

❙ Environmental and social risks in the Proparco portfolio 2018, in amount signed (EE)

Risks

Amount in €000s

Percentage

A B

€264,836

20%

€59,398

4%

B+

€373,359 €365,533 €258,841

28% 27% 19%

FI – A FI – B FI – C

€33,207

2%

GRAND TOTAL

€1,355,175

100%

2.4.3 Human rights due diligence As seen above, compulsory diligences with respect to operations necessarily include social risk assessments for the projects being funded. The issue of applying international human rights standards is thus constantly on the agenda and integrated into the assessment and implementation of all projects, whatever the shape or form. To this end, AFD Group relies on the IFC’s performance standards and the World Bank’s environmental and social standards. The human rights issues covered by these standards enable us to address matters related to: P working conditions and labour protection (in particular the fight against forced and child labour); P the health and safety of communities potentially affected by projects (in particular potential violence against such communities); P the acquisition of land and involuntary resettlement (in particular to prevent forced evictions); Where necessary, the implementation of these standards is accompanied by the establishment of complaint management systems with respect to AFD and Proparco projects, making it possible to collect and process potential complaints by people affected by those companies. The financing agreements signed with partners and recipients must necessarily mention the commitments made by counterparties to respect the rights of persons potentially affected, and reiterate the compliance with the ILO’s fundamental conventions in such a manner as to make them legally binding. P the rights of indigenous populations.

Risks

Number

%

A

8

13% 32%

B+

20

B

4

6%

FI – A FI – B FI – C

10 13

16% 21% 11% 100

7

GRAND TOTAL

62

(1) https://www.proparco.fr/fr/responsabilite

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REGISTRATION DOCUMENT 2018