Responsible investing and fixed income
What is the process within the platform for integrating ESG?
We leverage AXA IM’s proprietary ESG scoring to cover our broad fixed income universe. ESG scores are directly fed into our portfolio management tool which is used daily by the managers, providing them with easy access to ESG scoring and key performance indicators. We developed ESG dashboards and reporting allowing them to measure the footprint of the portfolios. We believe detailed reporting is key to providing our clients with a high-level of transparency for the investment process.
We integrate ESG factors into our fundamental credit research framework, which aims to help fund managers assess how companies are mitigating ESG risk and taking advantage of these criteria to improve their competitive position in their own sectors. ESG factors are also integrated in our regular risk monitoring by our portfolio engineers.
The responsible investment team conduct regular training for our fixed income team on ESG considerations and ensure a strong governance to align our strategic commitment to mainstream ESG with the investment process. Dedicated ESG experts at the platform level contribute to an efficient integration into our investment process.
How has ESG evolved within the platform?
At AXA IM, responsible investing is part of our DNA and within fixed income, we been progressively integrating ESG into our investment process. Beginning with a focus on dedicated products and client requests, we are now developing a full integration of ESG factors into our core investment process. ESG has been integrated into our Funds since June 2002, and, since then, we have continued to build ESG integration into our investment process, and we are now developing our capabilities towards impact investing.
Green bonds framework
Green bonds have emerged as a unique asset class that can help tackle climate change by financing environmental solutions. Green bonds enable investors like AXA IM to purchase debt securities earmarked for projects which aim to support a low-carbon economy. These bonds can help finance a myriad of different initiatives, including renewable energy, pollution prevention, energy efficiency and biodiversity preservation, among many others.
The green, social and sustainability bond (GSSB) market is constantly evolving, and AXA IM is seeking to take a leadership role in this field. Therefore, we regularly update the way we evaluate GSSBs. We set out our methodology below. We also explain how we map our GSSB investments to the United Nations Sustainable Development Goals (UN SDGs). This mapping allows us to measure our contribution to the SDGs through these investments.