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AXA Investment Managers

PRI reporting framework 2020

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Direct - Listed Equity Incorporation
ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG factors [LEI 08 - 10] Outputs and outcomes [LEI 12 - 13]
Direct - Listed Equity Active Ownership
Overview [LEA 01] Engagement [LEA 02 - 08] Outputs and outcomes [LEA 09 - 11] (Proxy) voting and shareholder resolutions [LEA 12 - 21]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 12] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 06] (B) Implementation: Thematic [FI 07 - 09] (C) Implementation: Integration [FI 10 - 12] Fixed income - Engagement [FI 14 - 16] Outputs and outcomes [FI 17 - 18]
Direct - Property
Overview [PR 01] Fundraising of property funds [PR 02 - 03] Pre-investment (selection) [PR 04 - 06] Selection, appointment and monitoring third-party property managers [PR 07] Post-investment (monitoring and active ownership) [PR 08 - 14] Overview [PR 08] Property monitoring and management [PR 09 - 10] Property developments and major renovations [PR 11] Occupier engagement [PR 12 - 13] Community engagement [PR 14] Outputs and outcomes [PR 15 - 16]
Direct - Infrastructure
Overview [INF 01 - 02] Fundraising of infrastructure funds [INF 03 - 04] Pre-Investment (Selection) [INF 05 - 09] Post-investment (monitoring and active ownership) [INF 11 - 16] Overview [INF 11] Infrastructure Monitoring and Operations [INF 12 - 14] Infrastructure Maintenance [INF 15] Outputs and outcomes [INF 17 - 18] Communication [INF 19]
Confidence building measures
Confidence building measures [CM1 01 - 07]
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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes » (A) Implementation: Screening

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

A) Exclusions applied across all assets:

-Controversial weapons: Since 2008, AXA IM excludes from all its investments, based on the treaty of OttawaLandmines and the treaty of Oslo, those companies involved in the production of anti-personnel landmines as well as cluster bombs. Since 2011, this exclusion has been extended to include biological and depleted uranium weapons.

-Palm Oil: In 2014, AXA IM decided to implement a policy for investments related to palm oil production and made the decision to not invest in food commodity derivatives.

-Coal: In 2016, AXA IM Management Board has decided to divest the biggest exposure on coal power generation and coal mining companies.

B) Our ESG standards exclusions applied to RI/ESG integrated assets:

As a result of these ESG standards, the following sectors and areas are excluded

•   Coal and tar sands producers

•   Tobacco

•   Defense

•   Severe breaches of United Nations Global Compact (UNGC) principles

•   Low ESG quality companies

C) In addition we do not invest in a selection of countries for compliance reasons, in order to respect international embargo decisions.

D) Finally, AXA IM provides its clients with the possibility of applying additional screening based on their own convictions.

Screened by

Description

We have developed an ESG framework relying on the inputs from several extra-financial agencies and internal ESG convictions. This framework is composed of 13 sub-factors and 6 factors representing key issues across the three E, S and G dimensions. The overall ESG assessment is a weighted average of E, S and G taken separately, where the weights depend on the sector of the company.

For ESG Integrated, sustainable and Impact funds these factors are taken into consideration in the investment selection and therefore have an impact on the eligible universe by eliminating the companies or the countries which deliver bad ESG performance or when they present serious controversial matters.

 

Screened by

          In-house screening englobing Environmental Liabilities, Human Rights, Business Ethics, Customers’ relationships and Supply Chain

Description

Companies in breach of the UNGC Principles are excluded from our RI and ESG Integrated assets.

AXA IM Management Board can also decide to extend the exclusion to all AXA IM assets if the breach is considered to be of very high severity.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

External communication, including with clients, is organised when a change in screening criteria is done, and we have offered to our clients the opportunity to opt-out from our coal exclusion when it was deployed. Details of all our exclusion policies are available on our website.

The decision to apply AXA IM ESG standards across our ESG Integrated mutual funds was made in 2018, and the prospectus of the funds was amended accordingly. Shareholders were informed of the change in the prospectus.

LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

Low ESG quality is one of the screens applied to Integrated, sustainable and impact funds – it is determined on the basis of proprietary ESG scores – which are updated twice a year using our proprietary scoring methodology.

The corporate scoring methodology at AXA IM is developed and maintained by the RI team. We use raw ESG company/country data from ESG research providers and cover more than 7,200 companies and 100 countries with our quantitative scoring system. We aggregate the raw quantitative data of specialised rating agencies and then provide each company/country with a score scaling from 0 - 10.  The portfolio managers have access to the individual scores of each company.

LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

06.2. If breaches of fund screening criteria are identified, describe the process followed to correct those breaches.

Systematic Pre and Post trade controls are performed by our Internal Guidelines Monitoring team for all screening criteria.

Thanks to the pre-trade controls in place, there are usually no breach of screening criteria. However, if a breach was to be detected, the Monitoring team would contact the Portfolio Manager and Risk Manager and ask for an explanation to confirm whether or not there has been a breach. If an infringement has indeed occurred, a divestment plan is agreed.

06.3. Additional information. [Optional]

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