AXA IM continued to strengthen its engagement activities in 2023

AXA IM continued to strengthen its engagement activities in 2023
AXA IM continued to strengthen its engagement activities in 2023

The group led by Executive Chairman Marco Morelli announces 681 engagement initiatives carried out with 503 companies in 2023, an increase 14% compared to 2022.

“Investing should not be reduced to a binary choice between sustainability and long-term financial performance. Clients need clarity around responsible investing, but their assets also need to perform well. We detail in our shareholder engagement report how we work to combine these two objectives.

We believe that adequate consideration of ESG factors contributes to performance, making our strong and measurable engagement strategy fundamental. By continuing to emphasize transparency, our commitment to a more sustainable future and our discussions with stakeholders who share our beliefs, we will strengthen our ability to generate sustainable, long-term performance for our clients. declared Marco Morelli, Executive Chairman of AXA IM.

AXA Investment Managers (AXA IM) announces the publication of its 2023 engagement and active shareholder report, demonstrating the importance of engagement in its responsible investment strategy, an essential pillar of its new strategic plan.

In the context of its integrated active ownership approach allowing information collected in engagement to be taken into account in investment decisions, AXA IM carried out 681 engagement initiatives with 503 companies, representing an increase of 14% in comparison with 2022, including 298 commitments with objectives. In addition, 200 engagement initiatives were carried out with the Board of Directors or with management teams.

AXA IM’s 2023 Engagement and Active Shareholders Report presents the following information:

  • Climate change remains the main engagement theme, representing 37% of total commitments, compared to 28% in 2022. This significant increase is largely due to the increased frequency of “sustainability dialogues” led by managers. portfolio managers and credit research analysts, for whom this theme represented 46% of commitments, illustrating the integration of climate considerations into the investment process, in accordance with AXA IM’s net zero commitment.
  • Along with human capital (17%), corporate governance is the second most recurring theme within engagement activities, reflecting AXA IM’s belief that a robust governance structure is a prerequisite for successful integration. environmental and social issues. In addition, 38% of commitments with objectives linked to climate change also deal with corporate governance issues, with an emphasis on the monitoring of climate risks by boards of directors and incentive mechanisms linked to the climate strategy for the leaders.
  • 16% of total commitments are linked to biodiversity, with deforestation remaining a priority. Additionally, in September 2023, AXA IM was a founding member of Nature 100, a collaborative initiative aimed at encouraging policymakers and businesses within key sectors to work to reverse the loss of biodiversity. here 2030.
  • AXA IM is increasingly integrating the theme of just transition into its engagement activities, while expanding and enriching its human rights discussions with technology companies by collaborating with other investors and organizations. In 2023, AXA IM co-founded a coalition of investors aimed at addressing the mental and well-being risks linked to the products and services offered by companies in the technology sector.
  • AXA IM is continuing its engagement initiative with “climate laggards”, an integral part of its “three strikes and you’re out” policy which has led to concrete results with several companies with which AXA IM had engaged. Two companies in particular have formally set new formal net zero ambitions, while others have improved their objectives, policies and reporting. For other companies, AXA IM used escalation techniques, including votes against the board of directors, advance disclosure of voting intentions and their motivations, and co-filing of shareholder resolutions.
  • In 2023, AXA IM voted on 54,782 resolutions during 4,856 general meetings, or 97.6% of the voteable meetings.
  • Last year, AXA IM began recording all votes influenced by a sustainability dialogue or engagement initiative to illustrate the concrete application of one of the fundamental principles of our voting policy: voting in the most informed way possible, taking into consideration the specificities and context inherent to each company.
    o Of the total number of votes influenced by engagement, dialogues conducted prior to general meetings with invested companies had a positive impact in 47% of cases.
    o Although most of the dialogues influencing our votes are related to corporate governance issues (executive compensation, board composition, shareholder rights), 61% of votes used specifically for escalation purposes were related to climate issues.
  • The average opposition rate is 15.1%, with at least one vote against in 62% of general meetings voted on. The highest rate of opposition again concerns issues relating to the board of directors (38% votes against), followed by those linked to executive remuneration (27% votes against).

Building on progress for 2024 and expectations for voting season

In 2024, AXA IM will continue its engagement and voting efforts related to the themes considered most important to investors, including:

  • AXA IM will publish an enhanced version of its portfolio-level engagement report this year, providing additional qualitative information to clients on the content of discussions, level of progress and objectives to reinforce its commitment to transparency at following recent improvements to its approach to disclosing its portfolio-level engagement activities.
  • Corporate governance remains a priority with monitoring of key updates to AXA IM policy and principles, particularly regarding climate lobbying, virtual general meetings and fairness of executive remuneration. In addition, from 2024, the treatment of all employees will be taken into greater consideration when voting on executive compensation proposals.
  • This year, to ensure the highest level of transparency to all its stakeholders, AXA IM has begun to communicate the rationale for any opposition to resolutions proposed by shareholders related to ESG.
  • As an investor in real assets, private markets, but also fund selection, we also aim to create sustainable value by encouraging the managers and partners with whom we work to adopt best practices in terms of asset integration. sustainability in their strategies, transparently explaining the specifics of engagement in these alternative asset classes.
  • In 2024, engagement with public authorities will remain a central theme to support progress on the net zero objectives by removing obstacles to their implementation and creating the conditions conducive to their achievement within the financial sector and the real economy. Continuing to promote a framework that supports engagement across asset classes will also be a priority, addressing issues that could hinder the effectiveness and influence of shareholder engagement and voting at the within the European Union and the Kingdom.

To consult AXA IM’s 2023 engagement and active shareholder report, click here

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