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Engagement Shareholder engagement is a key strategy to signal carbon risk-related expectations to companies or industries. AXA will continue to support standalone or collaborative initiatives such as the Carbon Action (Round II 2016), or Aiming for A. We believe our publicly communicated divestment policy strengthens t... |
ESG integration The most impactful measure for a company of AXA’s size remains the systematic integration of environmental, social and governance (ESG) criteria in our investment decisions. We have developed internal tools to this effect since 2008 and have gradually improved their sophistication and greatly expanded t... |
THE METHODOLOGY. |
AXA PARTNERS WITH. |
CONTACT. |
The methodology used for this foot-printing exercise is a “Carbon Intensity” approach based on TruCost data (a specialist data vendor), itself dated Dec. 2014. Each company’s (/country) carbon emission is divided by its revenue (/GDP); an average weighted result is then computed taking into account the considered inves... |
The scope of this measure includes all Sovereign Debt, Corporate Bonds and Equities managed internally for AXA’s General Account: €402bn out of a total of €545bn (of which €203bn of Corporate Bonds and Equities and €199bn of Sovereign Debt). The coverage achieved thanks to the TruCost database is 84% (69% for Corporate... |
Media Relations: +33.1.40.75.46.74 Hélène Caillet: +33.1.40.75.55.51 Jean-Baptiste Mounier: +33.1.40.75.49.68 x. |
AXA’s carbon intensity = carbon emissionsi revenuesi exposurei asset class exposure ( ) ( ) ∑ i |
AXA GROUP. |
Award on Investor Climate-related Disclosures. |
October 2016 |
Page 1 sur 49. |
CONTENTS. |
The search for material ‘carbon risks’ ................................................................................................................. 3. |
AXA's position regarding Climate Change ........................................................................................................... 5. |
AXA’s Responsible Investment Governance framework ..................................................................................... 6. |
Award submission overview & methodology ...................................................................................................... 8 2.1 TRANSPARENCY ON THE INTEGRATION OF CLIMATE-RELATED CRITERIA INTO INVESTMENT DECISIONS AND ENGAGEMENT ......................................................................... |
Criteria 2.1.1. - Consistency of the business objectives ................................................................................ 12. |
Criteria 2.1.2. Acknowledgement of the shortcomings of the approach ...................................................... 12. |
Criteria 2.1.3. Transparency on engagement activities with issuers and their impact ................................. 13. |
Carbon Risk Mitigation - ‘Aiming for A’ – A collective initiative .................................................................... 16. |
Statoil – Norway – A one-to-one meeting ..................................................................................................... 17. |
Regulatory risk in the Automotive Sector ..................................................................................................... 17. |
Criteria 2.1.4. Transparency on the integration of criteria into asset manager mandates + Criteria 2.1.5. Relevance of the decarbonization target and strategy ................................................................................. 18 2.2 Climate Goals ............................................................. |
Criteria 2.2.1. Conversion of climate objectives into indicative targets specific to investments in financial assets ............................................................................................................................................................. 19. |
Criteria 2.2.2. Assessment of the portfolio’s consistency with chosen indicative targets .................... 21. |
Criteria 2.2.3. Asset-class coverage ......................................................................................................... 30. |
Criteria 2.2.4. Sector / technology coverage .......................................................................................... 30. |
Criteria 2.2.5. Reporting on scope of investee activities/organizational boundaries .................... 31. |
Criteria 2.2.6. Time horizon ...................................................................................................................... 31. |
Criteria 2.2.7. Geographic granularity of the analysis .......................................................................... 31. |
Criteria 2.2.8. Disclosure of results at relevant granularity ................................................................ 31 2.3 Climate Risks ................................................................................................................................................ 32. |
Criteria 2.3.1. Relevance of the climate-related risk management .............................................................. 32. |
Criteria 2.3.2. Time horizon of analysis and consistency of risk scenario(s) ................................................. 32. |
Criteria 2.3.3. Physical risks: comprehensiveness of the risks analyzed ....................................................... 32. |
Criteria 2.3.4. Physical risks: granularity of the analysis ............................................................................... 34. |
Criteria 2.3.5. ET risks: comprehensiveness of the risks analyzed ................................................................ 35. |
Criteria 2.3.6. ET Risks: granularity of the financial analysis ......................................................................... 36. |
Criteria 2.3.7. Asset-class coverage for risk assessment ............................................................................... 40 |
Page 2 sur 49. |
Criteria 2.3.8. Sector coverage for risk assessment ...................................................................................... 40 2.4 - Communications to clients and beneficiaries ....................................................................................... 41. |
Criteria 2.4.1. Clear and detailed description of the communication plan ................................................... 41. |
Criteria 2.4.2. Ability of the beneficiaries to integrate, if they wish, climate-related criteria into their own investment decisions ..................................................................................................................................... 45. |
Criteria 2.4.3. Resources mobilized to implement actions............................................................................ 47. |
About the AXA Group - Present in 64 countries, AXA’s 166,000 employees and exclusive distributors support 103 million customers through four core business activities: Property & Casualty Insurance; Life & Savings; Health Insurance; and Asset Management. The AXA Group and its two internal asset management entities, AXA ... |
Page 3 sur 49. |
The search for material ‘carbon risks’ |
With the recent EU ratification, the COP21 “Paris agreement” will now enter into force. Why should this warrant AXA’s attention? Can climate change have material impacts on our investments? How does this relate to the Award on Investor Climate-related Disclosures? |
The relevance of the COP21 - The “Paris Agreement” was a landmark agreement, which under France’s leadership, reaffirmed with unprecedented clarity that governments are committed to contain global warming below 2°C, address adaptation and resilience and – this is a first - “Making finance flows consistent with a pathwa... |
Article 173 – This new French regulation, part of the 2015 “Energy Transition for Green Growth” law, promotes an advanced “climate risks” reporting framework. It places France at the forefront of the climate debate for investors worldwide. We have engaged substantial work in order to develop a rigorous analysis. We are... |
TCFD - Beyond the Award-related work, we believe that understanding, identifying and measuring climaterelated risks is complex but is not sufficient. It is also key for investors to understand how portfolio companies report and factor climate-related financial risks into their broader strategy. Promoting transparency a... |
Better reporting - However, the TCFD’s initial “landscaping” work revealed that over 400 climate-related reporting voluntary and or mandatory regimes are implemented across G20 jurisdictions. These often overlap, contradict each other and request information that has limited materiality. Such a situation can create sub... |
Page 4 sur 49. |
Both the TCFD and the Award on Investor Climate-related Disclosures embody this approach, which ultimately can drive us towards a green, inclusive and sustainable global economy. |
Laurent Clamagirand, AXA Group Chief Investment Officer |
Page 5 sur 49. |
AXA's position regarding Climate Change. |
Climate change is a direct risk to our business, both on our liabilities - the claims we pay out - and on our assets - the value of our investments. But climate change also presents us with unprecedented opportunities for action. |
Insurers are well equipped to address climate-related risks. They can fund and promote risk research and education. They possess loss data, as well as models and tools to analyze and project this data. They have a duty to unveil and disseminate knowledge about such new risks, including poorly known threats to society. ... |
Overall, we see our role as three-fold: • Understanding, managing and modeling risk. • Repairing where there is damage and preventing future damage • Through our assets and liabilities: on the one side, providing and pricing risk (and, by doing so, helping influence behavior); on the other through where we choose to in... |
AXA’s strategy regarding climate change is thus to leverage its risk management expertise to better understand and prevent risks and to mobilize its investment capacity to finance and encourage the energy transition. This strategy addresses both the “mitigation” and the “adaptation” dimensions of climate change. |
More information: https://www.axa.com/en/about-us/axa-and-climate-change |
Page 6 sur 49. |
AXA’s Responsible Investment Governance framework. |
At AXA we define Responsible Investment (RI) as the integration of environmental, social, and corporate governance (ESG) considerations into investment processes and ownership practices, in the conviction that these may impact both risks and returns. The identification, understanding and management of ESG issues requir... |
It is in this context that AXA Group created a Responsible Investment Committee (RIC), presided by the Group Chief Investment Officer. The RIC's mandate is to develop a global approach to RI issues which takes into account both reputation-related matters as well the more positive inclusion of ESG issues in investment p... |
The activities of the RIC also support AXA Group's wider Corporate Responsibility activities, details of which can be found here: http://www.axa.com/en/responsibility/ |
Among other initiatives, the RIC developed the Group's comprehensive RI policy. This Policy, which covers the Group's General Account assets, sets out AXA Group's position and beliefs on RI, and defines the corporate governance practices that our asset managers are expected to encourage, including via engagement and vo... |
Page 7 sur 49 sectors that pose particularly acute environmental, social or ethical challenges. The RI Policy also established the Group's "Impact Investment" strategy. AXA’s Impact Investment vehicles allocate capital to investors who focus on key sustainability concerns such as climate change, education, poverty, hea... |
AXA Group joined the UN PRI in 2013. Our asset management subsidiaries - AXA Investment Managers (AXA IM) and AB - are also PRI signatories. This report provides a consolidated report on the Group's RI activities (as they relate to the 626Bn€ of General Accounts assets). This is the third year in which we have reported... |
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