AXA IM intensifies pressure on companies to take meaningful action on sustainability issues with enhanced stewardship focus
- Climate change, biodiversity and social issues among key areas for AXA IM’s engagement activities.
- Climate change was AXA IM’s largest area of engagement in 2021.
- AXA IM voted against management at 59% of Annual General Meetings last year.
- 2022 marks introduction of strengthened voting policy and ‘three strikes and you’re out’ approach to climate laggards.
AXA Investment Managers (AXA IM) is intensifying pressure on companies to take meaningful action on climate, biodiversity and social issues after it recorded significant engagement milestones and introduced strengthened shareholder engagement policies in 2021.
With stewardship and engagement again a top priority in 2022, AXA IM is rolling out a strengthened voting policy1 and a ‘three strikes and you’re out’ escalation approach to climate laggards, supplementing the extended oil and gas policy and tougher biodiversity engagement programme introduced in 20212 .
These new policies demonstrate AXA IM’s ongoing commitment to wielding its influence through engagement. As detailed in its latest Stewardship Report, in 2021 the business engaged with 245 entities in 29 countries on the issues it considers most pressing for the planet and its inhabitants as well as for investors.
Climate change was AXA IM’s largest area of engagement (33%), but it also saw a clear increase on the proportion of corporate governance-related engagements (21%) versus 2020 levels (16%), reflecting the trend towards the integration of ESG at companies’ strategy level and across business activity, a number of these meetings also addressing E and S issues. Human capital (20%) and resource and ecosystems (14%) were also major focuses of engagement. More than 80% of engagements in 2021 were linked to the UN SDGs.
Marco Morelli, Executive Chairman at AXA IM said: “Stewardship is one of the main tools we have to effect change, and engagement is at the forefront our approach as a leading responsible investor. 2021 was a pivotal year during which we engaged meaningfully with hundreds of companies on a range of critical issues, but also introduced tougher policies designed to set clear red lines for issuers acting too slowly or without credible plans to achieve net zero by 2050. Already this year in 2022, we have continued this approach with our new voting policy, which encourages boards to adopt clear ESG commitments and targets, and the introduction of our ‘three strikes and you’re out’ escalation policy for climate laggards.”
“2022 is another milestone year with COP27 in November and we will continue to play a full part in the financial industry’s efforts to move the real economy towards decarbonisation,” he added.
Building on progress in 2022
In 2022, stewardship remains one of the top priorities on AXA IM’s Responsible Investing (RI) roadmap, with the following expected evolutions:
- Biodiversity loss is a systemic risk which requires action. AXA IM expects its partnership the with Iceberg Datalab to be instrumental in allowing it to assess the biodiversity footprint of investee companies and to identify the drivers of engagement, including the most significant pressures those companies have on biodiversity across their value chain.
- The ‘Just Transition’ will gain more traction with companies and investors. So far, this theme has been absent from most companies’ climate strategies. AXA IM believes its participation in the coalition ‘Investors for a Just Transition’, set up by Finance for Tomorrow, will encourage companies to pay more attention to the theme.
- AXA IM is bolstering its commitment to transparency, with enhancements to its fund-level engagement report for all open-ended ESG-integrated and ACT range products3 .
Climate, biodiversity and social issues will also remain key priorities for engagement with companies in 2022, along with corporate governance, forming a key dimension of AXA IM’s RI strategy.
To read the AXA Investment Managers 2021 Active Ownership and Stewardship report, please click here.