AXA IM has made material contribution towards its goal of becoming net zero as a business and investor by 2050
AXA Investment Managers (AXA IM) today unveils the first reporting of the AXA IM For Progress Monitor, a set of indicators that track the company’s progress against its net-zero targets as a business and investor.
Announced in 20231 , the AXA IM for Progress Monitor is comprised of eight metrics with interim targets, selected for their strategic importance and material contribution towards AXA IM’s sustainability related goals.
- Active internal engagement: objective to reach 100% of employees attending a learning and awareness session on ESG & Sustainability by end of 2022.
- Objective achieved: 100% of employees2 attended learning and awareness sessions as of end 2022.
- This achievement can be attributed to the AXA Climate Academy awareness programme for employees and new joiners, who are offered introductory and deeper-dive ESG and Climate e-learning modules.
- In 2023, the target is for at least 70% of employees to attend additional awareness sessions.
- Corporate porfolio carbon intensity: objective to reduce by 25% by 2025 (vs 2019).
- Objective achieved: down 28.7% at the end of 2022.
- This achievement is attributable3 to an increased exposure to low-emitting sectors as well as a decreased exposure in the average carbon intensity of high-emitting sectors.
- Real Estate carbon intensity: objective to reduce by 20% landlord operational carbon intensity of directly managed real estate equity AUM of ca. €64bn4 by 2025 (vs 2019).
- 95% progress toward our target: 19% reduction as of the end of 2022.
- Investment into new building systems, increased interaction with the property managers and new building certifications, as well as portfolio turnover contributed to this progress.
- We note that this is not a ‘like for like’ metric, but an absolute portfolio intensity metric taking into account a changing underlying asset base and while this is significant progress, portfolios are not static. Acquiring lower performing assets with the aim of improving their performance, and potentially disposing of high performing assets, could affect this metric in the future.
- 50% of AUM is maintained as of the end of 2021, based on the reference portfolio8 described below.
- Progress is defined as maintaining a defined proportion (50%) of AUM to be aligned to the CRREM pathway by 2025, knowing that every year CRREM trajectory becomes more ambitious and harder to align with and considering the portfolio turnover.
- For 2021 and 2022, we refer to the performance of a reference model portfolio, representing ca. 19% of in-scope assets, where the performance remains aligned with the expected performance threshold in 2025, for more than 50% of the portfolio.
- Following changes to the CRREM methodology in Q2 2023, a refined methodology is being tested with results anticipated by the end of Q4 2023.
- AXA IM carbon footprint: objective to reduce by 26% by 2025 (vs 2019).
- 58.4% reduction from 8,493 tons of CO2e in 2019 to 3,532 tons of CO2e equivalent (double the reduction hoped to be achieved by 2025).
- The progress can be attributed to new work habits post pandemic, quality of digital tools and a reinforced business travel policy that reinforces the need for sustainable travel choices.
- While we expect business travel continuing to increase to return to pre pandemic levels, further efforts are now expected to be able to maintain this reduction over the coming years.
- Financed emissions under engagement: 70% of financed emissions in material sectors subject to engagement by 2025.
- 82% progress towards our target: 57.4% of financed emissions were under engagement as at the end of 2022.
- Increased engagement with investee companies (individually or collectively) notably with climate laggards as defined in the “Three strikes and you’re out” mechanism in AXA IM’s engagement policy9 . Additional carbon-intensive issuers will be added to the engagement list.
- Natural capital solutions: $500 million targeted to Natural Capital Solutions by 2028.
- 30% progress: $150 million committed to the Natural Capital Strategy in 2022.
- Continued capital commitment to support a large range of natural capital activities.
- Exit from coal: objective to exit all coal investment in OECD countries by 2030.
- 11,5% progress: coal exposure down to 0.247% of total direct investments in listed corporate assets10 at the end of 2022.
- This reduction follows the implementation of new exclusion criteria within our updated climate risks policy in 202211 , as well as continuous engagement with some of the companies still held regarding their climate transition plans12 .
“We are proud to report on our first edition of the AXA IM For Progress Monitor, as we are committed to hold ourselves to account on our journey to net zero with all our stakeholders. These metrics complement our financial targets as significant indicators of our successes and challenges as an investor and a business. Steady progress has been made towards our targets. We must continue to drive meaningful progress.” said Marco Morelli, Executive Chairman of AXA IM.
“These targets are part of our company’s strategic roadmap and will be reviewed on an annual basis to ensure they are suitably ambitious and are reflective of our broader business objectives.” added Marco Morelli.
More information on the metrics and methodologies used here.