Marco Morelli

AXA Investment Managers (AXA IM) has released its 2024 Stewardship report, reaffirming its commitment to long-term value creation through active stewardship. The report outlines AXA IM’s ongoing efforts to drive responsible investment practices, support the transformation of investee companies and deliver long-term performance for clients.

“As a responsible asset manager, we see stewardship as a powerful lever to encourage corporate behaviours that align with long-term value creation. It is through consistent engagement that we seek to build trust, drive accountability and support transformation where it is most relevant. At the same time, we have a responsibility towards our clients. Through our investment decisions, we aim to give them exposure to companies driving positive transformation, while seeking to reduce the risk of stranded assets.

Our approach remains pragmatic. We aim to anticipate change, adapt to new dynamics, and help convert emerging challenges into long term opportunities. And we do so with a clear conviction : that active stewardship is a full part of delivering on our fiduciary duty and positioning our clients for success.” said Marco Morelli, Executive Chairman of AXA IM.

Understanding the Interdependance of Risks

Although sustainable investing continued to grow in 2024, its pace slowed amid market volatility[1]^{[1],/sup>.  Sustainability may seem deprioritised just as the consequences of global warming and other systemic risks become more evident. These risks, often interconnected, must be addressed holistically.}

Corporate Governance: the Bedrock of Sustainable Performance

Effective governance is essential for embedding climate, environmental and social considerations into corporate strategies. In 2024, governance was the focus of 25% of AXA IM’s engagements with objectives and 22% overall. Notably, 42% of climate change-related engagements with objectives in 2024 also involved corporate governance issues.

For instance, AXA IM engaged with a Chilean retail distribution company^[2], initially focusing on sustainability commitments. However, significant governance issues arose regarding resource allocation. By addressing both themes, the engagement accelerated progress across the board.

The Climate-Biodiversity Nexus

Climate change drives biodiversity loss by disrupting ecosystems. Declining biodiversity reduces environmental resilience and exacerbates environmental degradation and vulnerability to climate risks. In 2024, over 56% of AXA IM’s biodiversity-related engagements with objectives also addressed climate issues.

In one case, AXA IM engaged with an Italian telecommunications company^[3] to integrate biodiversity and water risks into its supply chain strategy. The company has since committed to setting nature-related goals and improving sustainability targets.

Social Impacts of Climate Change

Climate change disproportionately impacts vulnerable populations, exacerbating inequalities and potential social unrest. Addressing climate change effectively requires equitable policies that account for these social implications.

In 2024, 22% of AXA IM’s climate-related engagements with objectives also addressed social issues and has sought to raise awareness around this link. AXA IM engaged with a Spanish utility firm^[4] to assess its “just transition^[5]” strategy. Insights from this dialogue contributed to AXA IM’s framework for investor engagement on “just transition”.

Strengthening Stewardship Through Transparency and Tailored approaches

Enhanced Transparency

AXA IM acknowledges that whilst interest in investors’ approach to engagement and voting continues to grow, varying frameworks and approaches to stewardship can complicate understanding and comparisons. To enhance transparency, AXA IM improved its disclosures by clearly outlining its voting decisions on ESG shareholder proposals, adding cases studies to engagement reports, and incorporating new metrics in its 2024 Stewardship report. This approach aims to clarify AXA IM’s escalation process and the influence of engagement on voting decisions.

Active Investment Teams

AXA IM’s investment teams actively engage with companies and collaborate with responsible investment specialists, providing company specific insights and in return integrating the insights obtained during the engagement into investment decisions. In 2024, AXA IM began tracking engagements involving investment teams to highlight their role in stewardship efforts.

On-boarding AXA IM Prime and AXA IM Select

Tailored engagement policies were launched for AXA IM Prime and AXA IM Select to embed best practices in additional asset classes. From 2025, each business unit will define how engagement is integrated into investment selection and monitoring, in line with AXA IM’s overarching principles.

Looking Ahead

In 2025, AXA IM will continue to engage with investee companies:

• Climate: 2025 marks the third year of the “Three Strikes and You’re Out” policy.
• Companies identified as climate “laggards” in 2022 have since improved their climate strategies have been removed from the list. Two companies will face divestment this year due to insufficient progress while others will face escalation during the AGM season, potentially including votes against the Board.
• Biodiversity:  Deforestation remains a key concern. AXA IM will urge stronger commitments and improved transparency from issuers. For  companies that have strengthened their commitments, the focus will shift to implementation. Additional themes include regenerative agriculture, circular economy and water management.
•  Social and Just Transition:  Issues such as modern slavery, living wages, public health, and working conditions will gain prominence. The Corporate Sustainability Reporting Directive (CSRD) is expected to enhance data comparability. Active ownership in this area will help improve reporting practices.
• Corporate Governance: AXA IM may withhold support in 2025 if sustainability disclosures lack quality and external assurance. Boards are expected to understand sustainability assurance processes and ensure transparent, rigourous provider selection. AXA IM has also instroduced new expectations for directors’ tenure and Board refreshment.

2024 key figures

• AXA IM conducted 550 engagements with 426 entities, of which 42% were engagements with objectives.
• 32% of engagements with objectives are in progress or have achieved success milestones in 2024, reflecting AXA IM’s long-term efforts.
• 35% of AXA IM’s engagements were conducted at board of C-suite level, allowing direct feedback to decision-makers, thus increasing the chances of meeting engagement objectives.
• Climate change remained AXA IM’s largest engagement theme, representing 41% of its engagements.
• Biodiversity (17%), human capital and human rights (8%) remain key engagement themes.
• AXA IM voted a total of 54,550 proposals at 4,929 meetings, representing 98.2% of the meetings that could be voted at.
• The opposition rate stands at 14.95%, with at least one vote against cast in 60% of the meetings where AXA IM voted. The highest level of opposition remains for board issues (37% of votes against management), followed by executive remuneration (25% of votes against).

To read AXA IM’s 2024 Stewardship report, please click here.

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Marco Morelli

AXA Investment Managers (AXA IM) has published its entire global carbon footprint as a business, including its Scope 3 emissions, to take credible action towards reducing its operational footprint and minimise its impact on the planet. This is part of AXA IM’s commitment to become a net zero asset manager for its operations by 2050, with an interim target of reducing emissions by 26% by 2025.

As part of its 2022 Climate Action Report, AXA IM reports its Scope 3 emissions for the first time which details the impact of its supply chain including the indirect greenhouse gas emissions (GHG) from the purchase of all goods and services, accounting for 96% of its total emissions.

The business reports that in 2021, its total emissions across Scopes 1, 2 and 3 amounted to 31,280 tCO2e1 as detailed below:

Scope 1 – 830 tCO2e (3% of total emissions measured: Direct GHG emissions from owned or controlled sources such as gas combustion for heating buildings or fueling its car fleet.

Scope 2 – 430 tCO2e (1% of total emissions measured): GHG emissions from purchased electricity or from the consumption of steam, heat or cooling (some of AXA IM’s buildings are connected to such a heat network).

Scope 3 – 30,020 tCO2e2 (96% of total emissions measured): Other significant GHG indirect emissions (mostly from suppliers, as investments are excluded in this study) such as business travel, the purchase of services, the purchase of goods including IT material, cloud usage, commuting, catering and home working.

Commenting on the publication of its global carbon footprint, Marco Morelli, Executive Chairman at AXA Investment Managers, said: “It is not enough to be an active player in responsible investment, we must also walk the talk and be fully transparent. At AXA IM, we hold ourselves to the same high standards that we ask of others and have taken this extra step so that we can start to take action on our total carbon footprint and because we expect it of the companies, we invest in. With increasing regulation and expectation surrounding the reporting and disclosure of carbon footprints across the industry, it is the responsibility of companies like ours to lead by example in measuring and reporting carbon emissions with the greatest accuracy. The data we provide should be complete, transparent and available for scrutiny which is why we are proud to report our entire global carbon footprint including our Scope 3 emissions for the first time.”

In parallel, AXA IM also announces an ambitious plan to reduce its carbon emissions globally as a business. The business aims to make the following reductions and changes by 2025:

• Business travel – Cut carbon emissions by 40% per FTE (full time equivalent) by the end of 2025 at a rate of 12% per year by applying stricter rules for air travel and increasing the use of rail travel.
• Power – Reduce energy consumption by 36% across all offices globally and ensure all European offices are supplied by 100% renewable energy by 2025.
• Digital – Working with technology teams, AXA IM will build a digital sustainability roadmap, across infrastructure, cloud services and device management. AXA IM will also encourage employees to keep their smart phones, computers and tablets for longer to cut emissions.
• Car fleet – Cut carbon emissions by 15% by end of 2025 by transitioning fleets to e-vehicles.
  Supply Chains – Engage with AXA IM’s most material suppliers and service providers regarding their Net Zero roadmap, to ensure that AXA IM can influence change across the value chain.
• Paper – Reduce production of marketing paper and office printing, both by 20%. Venue branding, such as banners, will not include event names or dates so they can be reused.
• Water – Reduce the consumption of water in its offices by 10%.
• Unsorted waste – Continue to encourage recycling efforts and reduce unsorted waste by 10%.
• Corporate gifts refocus – End the practice of handing out corporate and seasonal gifts from 2023, money will instead be donated to charity.
• Vegetarian meals first – Propose vegetarian menus at events first and ask that locally sourced ingredients are used by providers. When meat is served, AXA IM will systematically exclude red meat from catering.

Progress will be reported every year against the stated targets.

While AXA IM’s focus is to reduce its emissions to an absolute minimum, some emissions will be unavoidable. Therefore, in parallel to its CO2 reduction programme, AXA IM will continue to use carbon offsetting for what cannot be removed.

Read AXA IM’s full Climate Action report.

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Chris Iggo

AXA Investment Managers (AXA IM) has announced the launch of the AXA IM Investment Institute, a new platform that aims to help clients make better informed investment decisions by bringing together expertise across the firm’s research and investment teams.

Chris Iggo, current CIO of AXA IM Core, has been appointed Chair of the AXA IM Institute alongside his existing responsibilities.

The AXA IM Investment Institute aims to provide clients with access to timely insights on macro events and views on asset classes and long-term future trends including sustainability, demographics, technology and regulations.

The Institute will invite well-known external experts to provide their views on a range of business, responsible investing and macroeconomic topics which will encourage an open forum incorporating a diversity of opinion for clients.

Chris Iggo will lead The AXA IM Investment Institute Advisory Committee, which will meet quarterly to discuss the key macro and research themes to be covered by the Institute, and to complement the research AXA IM’s experts already provide. The committee consists of representatives from AXA IM Core, AXA IM Alts and senior members of the macroeconomic research, ESG research and Quant Lab teams. In addition, up to three external committee members who are yet to be determined will be appointed.

The Investment Institute will also host regular “AXA IM Institute talks”, a series of video discussions and interviews hosted by Chair, who will be joined by members of the committee, and external guests.

Chris Iggo, commenting on his new role, said: “At AXA IM, we are always looking at ways to improve our service, so we decided to make content produced across our investment and macro research teams more tailored to client needs and answer some of the most burning investment questions. Research is central to all our investment decisions. The move will bring our experts closer together, allowing for greater collaboration on a range of topics from Sustainability to Future Trends. I look forward to chairing our first committee meeting.”

Marco Morelli, Executive Chairman at AXA Investment Managers, added: “Bringing our expert views together under the AXA IM Investment Institute allows not only clients but anyone to access the broadest possible perspectives from across AXA IM’s research and investment teams, to help guide decisions they make for their portfolios.”

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