AXA Investment Managers
AXA Investment Managers is an investment management company with 24 offices across Europe, Asia Pacific, and the Americas. It joined the Net Zero Asset Managers Initiative on 11 December 2020 and its initial target disclosure was published on 1 November 2021.
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
65% of total AUM (USD $650 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Portfolio decarbonisation reference baseline
• Corporate equities and bonds: 116.3298 tCO2e/$m revenue
• Real estate: 8.5 tCO2e / USD mn EV
Engagement threshold baseline
Engagement and stewardship actions (collaborative for 42% and/or individual for 38%)
Allocation to climate solutions baseline
2.1% of AUM allocated to climate solutions
Engagement threshold baseline
52% of financed emissions in material sectors are subject to direct or collective Engagement and stewardship actions (collaborative for 42% and/or individual for 38%)
Portfolio coverage baseline
• 46% of financed emissions in material sectors are already net zero or aligned
• 36% of corporate AUM in material sectors is considered net zero, aligned or aligning
• Sovereign bonds: already compliant with NZIF recommended target setting guidance based on CCPI score
• Baseline for percentage of assets under CRREM pathway currently under development, anticipated Q3 2022
Target(s):
Portfolio decarbonisation reference target
Corporate equities and bonds – reduction of WACI (tCO2e / USD mn revenue) by 25% by 2025
Real estate – reduction of WACI (tCO2e / USD mn EV) of 20% by 2025 and 50% of real estate AUMs under CRREM pathway by 2025
Portfolio coverage target
Sovereign Bonds – continue to be in line with the NZIF methodology
50% of financed emissions in material sectors to be net zero or aligned in 2025
Engagement threshold target
70% of financed emissions in material sectors to be subject to engagement in 2025
Allocation to climate solutions target
6% of AUM allocated to climate solutions by 2025
Portfolio decarbonisation reference target
Corporate equities and bonds – reduction of WACI (tCO2e / USD mn revenue) by 50% by 2030 against 2019 baseline
Engagement threshold target
90% of financed emissions in material sectors to be subject to engagement in 2030
Portfolio coverage target
100% of AUM in material sectors is considered net zero, aligned or aligning by 2040.
GHG scopes included:
Corporate equities and bonds: Scope 1 and 2 only as data quality and coverage for Scope 3 is too low
Direct real estate: Scope 1 and 2 as well as portion of Scope 3
We have set an objective to increase capture of Scope 3 data in coming years
Methodology:
Net Zero Investment Framework
Scenario(s):
IPCC 1.5°C pathways report and CRREM for direct real estate
Additional information
Proportion of AUM committed:
The proportion is 65% of total scope including JVs and 75% of total scope excluding JVs. We aim to continue to increase this over time as reliable methodologies become available for all asset classes.
Targets have been set for the majority of assets where net zero methodologies are available, and where AXA IM has the ability to set such targets from a legal perspective (ie. JVs are out of scope for the time being). Possibility of defining net zero targets for infrastructure and private equity is under review.
Policy on coal and other fossil fuel investments:
Coal, oil and gas policy (84% of AXA IM AUM)
Further information:
Target setting: In 2021, AXA IM reinforced its climate engagement and stewardship policy with a view to focus on climate laggards.
From 2022, AXA IM will engage with a selection of companies which do not have a net zero commitment or have quantified emissions reduction targets deemed to be not credible or demanding enough. This more forceful engagement policy, with a ‘three strikes and you’re out’ principle, aims at applying sufficient pressure to effect timely change, and is applied on behalf of third-party clients. Clear objectives are defined for each of those companies, tailored to their activities, and communicated to management.
AXA IM will regularly engage with those companies to steer them to achieve progress on those objectives, using escalation techniques when necessary (e.g., voting against management). If the objectives have not been achieved after three years, AXA IM will divest.
AXA IM road to net zero
Percentage of assets covered by the Net Zero Asset Managers Commitment Statement
15% of total AUM (USD $159.3 billion)
Information on interim target(s) covering the proportion of assets to be managed in line with net zero
Baseline(s):
Baseline year performance is defined at portfolio / client level and reported accordingly, with progress regularly measured.
Target(s):
Portfolio decarbonisation reference target
AUM with AOA Methodology (USD 147.1bn): We expect to achieve a 22% reduction in carbon intensity by 2025, in comparison with 2019 performance.
AUM with NZIF methodology (USD 12.2bn): We are in the process of setting the initial interim target at fund level for these funds, and will disclose the information by early 2022. The target will be consistent with a fair share of the required 50% reduction in global emissions by 2030.
GHG scopes included:
• For Corporate bonds and stocks, Scope 1 & 2 only are included at this stage as the data quality and coverage are still too low for Scope 3 at this stage to allow to use them in a robust enough manner. We intend to progressively include Scope 3 over time.
• For direct real estate, Scope 1 & 2 are included, as well as a portion of Scope 3 (e.g. whole building gas or district heating/cooling but not Tenant Scope 3 emissions).
Methodology:
Net Zero Asset Owner Alliance Target Setting Protocol
Net Zero Investment Framework
Scenario(s):
IPCC special report on global warming of 1.5°C. Direct real estate will move to CRREM-based pathways for Real Estate from 2025.
Additional information
Proportion of AUM committed:
USD 159.3bn represents 41% of USD 388.7bn in eligible/measurable AUM – that is total corporate bonds, stocks and direct real estate. We define eligible assets as those covered Net Zero methodologies as of today and where we have a capacity to effect change. For direct real estate, the scope is focused on assets with good quality data coverage.
To ensure we preserve the best interest of our clients, we carefully selected the strategies which will be managed in line with net zero, while engaging in particular with policymakers to help to clarify the regulatory guidance and improve the convergence between EU Sustainable Finance policies and Net Zero initiatives. We intend to increase the proportion of assets managed in line with Net Zero objectives over time and are looking at setting internal targets to increase this proportion over time from next year. We expect to see an increase in proportion by end 2022 which we will report to NZAM/PRI/CDP in due time.
Policy on coal and other fossil fuel investments:
AXA IM has committed to exit all coal investments in OECD countries by the end of this decade (and throughout the rest of the world by 2040) and applies a robust coal policy combining exclusion and engagement. Exclusions apply to 88% of AUMs. 0210226_AXA_IM_Climate_Risks_Policy_.pdf (axa-im.com). AXA IM plans to announce a policy which will cover the Oil & Gas sector in November – which will notably cover unconventional sources of energy
Further information:
Alignment assessment and engagement: In addition to this quantitative target, and with the objective of supporting real economy change, AXA IM has defined climate categories in line with the Net Zero Investment Framework proposal, as described in our paper on 1.5°C investing (link available below). Unless otherwise specified by the asset owner, we will aim at limiting reinvestments/new investments in issuers identified as Climate Laggards. We also plan to use engagement techniques for sectors at stake, with clear objectives communicated at the inception of the engagement, as well as a very clear timeframe to achieve these. On a focus list of companies in sectors at stake, if we do not see progress, we will activate the escalation process and will divest if progress is not sufficient in the timeframe.
AXA IM annual TCFD report: Sustainability at AXA IM | Our Strategy | AXA IM Corporate (axa-im.com)
AXA IM roadtesting in relation with NZ AOA Target Setting Protocol: Net Zero Emissions through investments: Road testing a pilot for intermediary target setting | AXA IM Corporate (axa-im.com)
AXA IM view on 1.5°c investing: Climate Alignment Principles: How to invest in line with a +1.5˚C goal | AXA IM Corporate (axa-im.com)