Our approach and offering
At AXA Investment Managers we maintain a three-tiered approach to RI and impact investing.
At AXA IM, we integrate sustainability risks within the research and investment process for all assets. Our approach to sustainability risks is derived from the deep integration of ESG (environmental, social and governance) criteria into that process. Our framework relies notably on:
Sectorial and normative exclusions policies
These aim to systematically address the most severe sustainability risks into the investment decision-making process.
Proprietary ESG scoring methodologies
The use of ESG scores in the investment process enables us to focus on assets with an overall better ESG performance and therefore likely lower sustainability risks.
We seek to protect client investments by raising issues of concern that may have a material impact on investor value over the longer term. Our dialogue with companies and Sovereigns aims to reduce investment risk, enhance returns and drive positive impacts for society and the environment.
This framework pushes us to consider how sustainability impacts on the development, performance or position of a company, and how it might have tangible effects on financial value in a broad sense (financial materiality). It also helps us to assess the external impacts of an asset’s activities on ESG factors (ESG materiality).
We aim to leverage this framework to deliver sustainable long-term outcomes for our clients through a comprehensive range of strategies which have a stronger focus on sustainability. We split our offering into two parts.
Avoid exposures that conflict with your principles & values
Identify ESG risks & opportunities
Invest by incorporating ESG analysis
Impact with outcome-oriented investments
Influence through in-depth research and engagement
These strategies use data and research, exclusions and proactive stewardship to help build ESG into the investment process, and promote environmental and social characteristics in our approach. As part of this we may exclude issuers with the lowest ESG scores as well as those which do not follow what we consider good governance practices. We believe that this level of ESG integration can potentially reduce risk to help us achieve better risk-adjusted returns.
We consider strategies classed as ESG Integrated to meet the requirements of Article 8 of the SFDR regulation.
Within this group, strategies in the ESG Integrated+ category go a step further by targeting an ESG score higher than that of the benchmark or universe.
The ACT range is our most focused ESG offering. Strategies in this category are designed to help clients target specific sustainability goals around issues such as climate change and inequality while continuing to adopt the reinforced approach to sustainability risks and good governance practices as described above. Alongside financial returns, these strategies target positive outcomes related to ESG criteria and/or to the United Nations Sustainable Development Goals (UN SDGs). Investment decisions are guided by both the financial and impact goals.
We consider strategies in the ACT range to meet the requirements of Article 9 of the SFDR regulation. Within this range are two categories:
- Sustainable strategies aim to embed ESG into the portfolio construction process, in an even more material and intentional manner. Every strategy in this group targets one or more specific sustainable objectives related to the ESG pillars (for example, carbon footprint) to further refine the investment universe.
- Listed Impact strategies incorporate the demands of the Sustainable category but will seek out businesses and projects that can potentially have an intentional, positive, measurable and sustainable impact on society and/or the environment. These strategies will also report against impact criteria aligned to specific UN SDGs.
This product categorisation framework applies to open funds in liquid asset classes. Specific approaches may apply for segregated accounts or Alternative strategies.
The reference to SFDR product categories is provided based on the basis of the European Directive (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector (“SFDR Regulation”) and state of knowledge as of 10 March 2021. As of today the SFDR-related regulatory technical standards are not yet finalised and enforced. The product categorisation shall be re-assessed once such regulatory technical standards are completed and may evolve.
How does ESG impact our investment teams?
Leveraging our two decades of responsible investing experience, we are integrating ESG analysis into all our investment platforms, providing fund managers with access to proprietary ESG scores and key performance indicators (KPIs) in their front office tools, as well as additional data and research.
The central responsible investing (RI) team focuses on thematic research, corporate governance and shareholder engagement as well as on developing quantitative solutions. Headed by Matt Christensen, the team is comprised of 14 experienced professionals, including 10 RI analysts, with an average of 13 years’ experience*.
Across our platforms we have dedicated RI resources working directly with fund managers who continue to be fully empowered and accountable for their process and results.
*AXA IM as at 30/06/18
The fixed income and high yield teams have reinforced their credit analysis team, and each has been trained to incorporate ESG considerations in their analysis of issuers.
Framlington Equities has a team of three specialists dedicated to ESG, who support fund managers on a day to day basis in the analysis of companies.
Rosenberg Equities has a dedicated ESG team, comprising of five ESG specialists headed by Kathryn McDonald.
Our multi-asset team work closely with the equity and fixed income platforms to integrate ESG, through two major pillars.