Developing insurance and investment products to promote mitigation and adaptation
As a global investor, AXA believes that environmental (including climate-related), social, and corporate governance ("ESG") factors may impact both risks and returns. The identification, understanding and management of ESG issues - which can be both risks to be reduced, or new investment opportunities to be explored, thus requires a specific expertise.
AXA's Responsible Investment Committee (RIC) developed a comprehensive RI policy in this context, covering the Group's -EUR 574 billion General Account. It notably allows the development of investment guidelines for "sensitive sectors", initiated the Group's "Impact Investment" strategy (see below), and promotes systematic "ESG" integration in our asset management. AXA Group, as well as its asset management affiliates (AXA IM and AB) have signed the UN Principles for Responsible Investment.
The process of ESG integration encourages our asset managers to include ESG metrics in their investment analysis across asset classes and regions. Specific measurement tools ensure that ESG performance is tracked accurately.
In 2015, AXA began analysing carbon risks in the belief that large asset owners have a legitimate role to play in the climate change debate. In this context, AXA signed the Montreal Carbon Pledge in 2015, thereby committing to assess and publish the carbon intensity of its investments every year. Moreover, in anticipation to the new 2015 "Energy Transition for Green Growth" law, promoting an advanced "climate risks" reporting framework, AXA has decided to publish its 2016 Investor Climate Report. Indeed, we think that this new French Regulation places France at the forefront of the climate debate for investors worldwide. In this learning phase, we hope our report will bring useful ideas to the "carbon asset risks" debate, and will contribute to improve the mandatory disclosures. In this context, on October 2016, AXA applied to the International Award for Best Investor Climate Reporting organized by the Ministry of the Environment and the independent association 2° Investing Initiative.
Moreover, AXA is investigating strategies to reduce carbon risks, such as "green" investments and shareholder engagement. These efforts send a long term signal to markets and regulators and are consistent with our broader Corporate Responsibility strategy to promote a stronger and safer society.
AXA Investment Managers has also developed a recognized Responsible Investment (RI) expertise since 2001, an internal environmental, social and governance (ESG) performance evaluation tool which also enable the "carbon footprinting" of portfolios, and a range of RI funds, such as the AXA WF Framlington Global Environment Fund.
Find out more
2016 Investor Climate Reportpdf document
"Impact investors" aim to allocate capital to businesses which address key sustainability concerns such as renewable energy, poverty, health or risk prevention. Such investments are thus intended to create and actively track both financial returns and positive social / environmental impact. As such, they require the management of social and/or environmental performance in addition to financial risk and return.
AXA launched two such funds:
- The M€200 "AXA Impact Fund", managed by AXA IM, allocates capital primarily to projects with a strong social component, such as microfinance or health in emerging countries.
- The M€155 "Clean Energy Fund", managed by Ardian, invests in projects in the renewable energy sector, such as windfarms.