Environmental, social and governance

ESG can allow firms to foster a meaningful change in the global economy, and in the communities in which we live and work. We believe that ESG analysis leads to more effective investment solutions that address global challenges and create sustainable value for our clients.

The integration of ESG factors is used to enhance traditional financial analysis by identifying potential risks and opportunities beyond technical valuations, providing data on issues such as potential reputational risk or identifying firms which are adapting to meet new market challenges. It is important to note that the main objective of ESG integration remains financial performance.

Going beyond this, we apply our ESG standards to our ESG integrated and ACT open ended range, which will also be available to institutional clients on an opt-in basis.

These standards help us to manage ESG risks and focus on material issues such as climate change, health and social capital, while also considering severe controversies as well as low ESG quality.

As a result of these ESG standards, the following sectors and areas are excluded from our RI and ESG integrated funds:

• Tobacco
• White phosphorus weapons
• Severe breaches of United Nations Global Compact (UNGC) principles
• Low ESG quality companies

The AXA IM ESG standards form one dimension of our ESG integration approach, which also include ESG corporate analysis and scoring, and common views on thematic engagement and voting.