Responsible investing

Draw upon our long-term, global, approach to responsible and sustainable investing

What is responsible investing?

At AXA IM, we define responsible investing (RI) as an investment process that incorporates environmental, social and governance (ESG) factors into its approach. RI enables clients to align their investments with global megatrends that are changing the investment landscape. Issues such as increasing regulation, the growing need for risk mitigation and a heightened social conscience can be more effectively addressed by integrating ESG factors into the investment process.

Why is responsible investing important?

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.

Is there a difference between socially responsible investing and ESG integration?

Socially responsible investing (SRI) and ESG are often treated as one in the same, however, there are some key differences between the two and the impact they have on the investment process.

Environmental, social and governance (ESG)

ESG refers to the practices of an investment that may have a material impact on the performance of that investment. The integration of ESG factors is used to enhance traditional financial analysis by identifying potential risks and opportunities beyond technical valuations. The main objective of ESG integration remains financial performance.

Socially responsible investing (SRI)

SRI goes one step further than ESG by actively eliminating or selecting investments according to specific social/sustainable guidelines. The underlying motive could be religion, personal values or political beliefs. SRI strategies use ESG factors to shape the objectives of the strategy and/or apply negative or positive screens on the investment universe.

Responsible investment is a young industry that lacks widely-acknowledged and precise norms, guidelines and definitions. So far, there is an understanding that responsible investment is a generic term that refers to a wide range of approaches that integrate environmental, social and governance (ESG) criteria in the investment process. Responsible investment can take on a variety of forms and should help to identify and to mitigate investment risks.

  • +20 years

    of experience in responsible and impact investing

  • 90%*

    of AUM** classified as Articles 8 & 9 under SFDR

  • >8800

    issuers rated according to ESG criteria

  • 100%

    of our core portfolio managers have access to ESG research and scores

AXA IM as of end of December 2020
* All percentages exclude non applicable assets (assets that are managed outside the EU and therefore not in scope of the regulation). All figures as at 31 December 2020 unless otherwise specified.
** As at 31 December 2020, assets under management within Equities, Fixed Income and Multi-Asset stand at €587 billion out of which €460 billion are applicable under the SFDR.

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Key dimensions of our ESG assessment of corporations and countries

 

ESG assessment of corporations and countries

What does ESG mean at AXA Investment Managers?

As a responsible investor we want to manage ESG risks and opportunities when investing on behalf of our clients, and we have identified certain sectors we will not invest in above a specified threshold. Consequently, sectorial exclusions on controversial weapons, palm oil, soft commodities and coal are applied across all assets.

Going beyond this, we apply our ESG standards to our responsible investing (RI) and ESG integrated open ended funds, 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. 

Our philosophy and mission

Our mission is to deliver a comprehensive ESG analysis and convictions to help our clients attain sustainable performance and fit their objectives; from avoiding ESG risks to achieving positive social impact in line with the United Nations Sustainable Development Goals (SDGs).

READ MORE ON OUR APPROACH AND OFFERING

Our approach and offering

ESG at AXA Investment Managers is developed using input from teams across the business and we maintain a three-tiered approach to responsible and impact investing: ESG embedded, ESG integrated and sustainable investing

Our framework and scoring methodology

ESG integration has seen rapid growth over the past few years, and this section looks at how we at AXA Investment Managers approach this change and our five-step approach to our scoring methodology.

A detailed look at impact investing

Go beyond ESG integration towards a positive financial and societal impact.

Our approach

  • Avoid

    Avoid exposures that conflict with your principles & values

  • Identify

    Identify ESG risks & opportunities

  • Invest

    Invest by incorporating ESG analysis

  • Impact

    Impact with outcome-oriented investments

  • Influence

    Influence through in-depth research and engagement

102 insights found

A climate change conundrum: Is there a sweet spot for natural gas in the energy transition?

When burned, natural gas derived from methane emits far less CO₂ than coal. However, if released directly into the atmosphere, it has a far higher warming potential

Are Europe’s oil and gas majors prepared for the climate change challenge?

Climate change and its effects have become a defining theme of our time.

Carbon offsets: A necessary tool, but only under close scrutiny and precise conditions

To meet the Paris Agreement net zero goals, both emissions reductions and carbon offsetting will play a critical role in delivering a manageable transition.

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