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AXA Investment Managers

PRI reporting framework 2020

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
42 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
46 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
10 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
2 %
Total actively managed listed equities 121%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

AXA IM's conviction is that responsibility is a key driver of value-creation, and the Management Board has decided to integrate ESG across its asset classes as a consequence, including on listed equity investments.


We have different level of ESG incorporation:

In 2019, in an environment where EU and national regulators are putting in place new standards and requirements notably to address greenwashing concerns, AXA IM has evolved its RI categories to ensure they remain in line with best practices in the markets, but also that they are easy to understand by clients. When doing so, we looked in particular at the EU Disclosures regulation as well as at the AMF work in France and sustainability-related labels. This explains some of the evolutions observed between the information reported in 2019 and the information reported in 2020.

ESG Integrated: Funds in this group expand on our screening policy to exclude tobacco producers and companies in violation of the Global Compact – a UN initiative which promotes 10 sustainability principles for corporations. ESG and voting training, as well as research and key performance indicators (KPIs) are provided for all portfolio managers. ESG scores form part of the investment decision-making process and are used to identify and address risks. A portfolio manager must submit a written justification of any decision to hold stocks with an ESG score below 2. A review of these submissions is carried out twice a year. On average, about 4% to 5% of a benchmark index would be excluded from investments at this level. We manage about €508 billion of assets in this category across institutional mandates and 75 open funds. By early April 2020, 80% of open funds will be eligible for this category. Our ambition is for that figure to reach 100% in 2021.

Sustainable: Funds in this category embed sustainability factors more meaningfully into the portfolio construction process. They adopt the same screening policies as detailed above but use responsible investment criteria to refine the investment universe further. For example, funds might follow a best-in-class policy which removes low-ESG-scoring companies, or they might adjust portfolios to target a specific KPI such as a carbon footprint. Each specific objective is clearly stated in the fund prospectus, and in a manner aligned to the latest regulatory demands in Europe. Granular ESG and voting reporting is published on our Fund Centre, and detailed information on the broad ESG approach at company and fund level is provided. At least 10% of a benchmark index will be excluded from investments in this category. Local market labelling regimes may add further requirements. We manage about €13.6 billion of assets in this category, across institutional mandates and 25 open funds.

Impact: This is our most focused responsible investment offering. Products incorporate the demands of the Sustainable category, but are specifically designed to have a direct and positive impact on society and/or the environment. Our strategies will report definitive and measurable data against impact KPIs such as carbon footprint, and each will target one or more UN SDGs. These strategies have a parallel commitment to deliver market-rate returns by tapping into key themes of the sustainability economy. Portfolio managers may directly invest in projects or companies which address the sdgs, or in listed assets or funds which are exposed. funds incorporate our full exclusion and stewardship policies and take an enhanced engagement approach on esg and sdg issues, seeking change where appropriate.

FRAMLINGTON APPROACH - Fundamental equity

At Framlington equity we ensure a 360° approach to company evaluation through 3 different steps:

Quantitative: The initial step relies on incorporating the internally-developed ESG scores into our front office tools, internal research models, risk reports. The score of each company in the portfolio is a starting point to understand how the company is positioned on each of the ESG criteria/sub criteria and how this score has been evolving through time. The scoring also helps us on the reporting side to communicate more broadly and more systematically to our clients on the overall ESG footprint of a portfolio and impact metrics.

Qualitative: The first layer of quantitative analysis helps us understand some of the issues that a company is facing. It is however our intention to go beyond a pure quantitative scoring and gain a detailed and prospective knowledge of how a company is intending to deal with some of its ESG challenges. This type of “deep dive” qualitative focus forms the second pillar of our investment approach. It is Our goal is to incorporate ESG risks & opportunities more systematically in our portfolio construction and modelling as part of our risk/return/fair value assessment. This type of analysis is undertaken when we visit companies; meet them face-to-face to discuss and understand how their ESG and sustainability policies and practices are supporting their long-term strategic goals. At Framlington Equities, the ESG analysts take part in team and companies’ meetings. Their role is to assist PMs in the incorporation of ESG factors into investment decisions. Their recommendations are key for validating a company’s integration in the portfolio.. Their responsibilities include:

Analyse corporates on E, S and G considerations from both a risk and opportunities perspective
Using a bottom up approach, pro-actively monitor ESG risks and opportunities ahead of portfolio construction but also reactively, on request from the investment team.
As a priority, analyse securities with no or low ESG rating, complementing AXA IM quantitative scoring with an in-depth qualitative analysis
Assist managers (by participating in meetings with PMs and CSR managers) to engage directly with invested companies, by coordinating this process with AXA IM’s RI team Voting and Engagement specialists

Engagement: we see ourselves as key influencers towards better and more responsible corporate behaviours and disclosure, using our ongoing dialogue with company managements as an active engagement tool. 

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

ROSENBERG APPROACH– Quantitative equity

For aggregate company-level scores we use AXA IM corporate ESG framework, which provides a means to measure and analyse how companies are facing long-term trends. This framework is used in conjunction with carbon and water intensity data, as well as information on company-level controversies, to provide a holistic view of each company The ESG scores and data are integrated into our investment process at the portfolio construction phase. We do this using an optimiser, as this allows the portfolio to retain the risk/return attributes we seek while improving the overall ESG profile. Additionally, we have worked to include ESG concepts ‘upstream’ in our alpha models.  In this way, we can use what we know to be links between ESG information and fundamental drivers of risk and return to improve outcomes for our clients.

LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

02.2. Indicate whether you incentivise brokers to provide ESG research.

02.3. Describe how you incentivise brokers.

We select brokers which will provide us with ESG Research at the beginning of each year, and regularly assess the quality of their output in line with regulatory expectations. In line with MIFID II regulation, we pay this research.

02.4. Additional information. [Optional]

LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate whether your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]

All voting information is available to the portfolio managers (PMs) directly through the voting platform called ISS and results are displayed on AXA IM website. Voting decisions on controversial issues are determined by our Corporate Governance Committee whose members include PMs from different investment teams. 

Fund managers and analysts across listed asset classes actively participate in engagement with companies alongside the Active Ownership specialists on the Responsible Investment team. This ensures that we maximise our access to company management and boards through different channels. We also prepare the meetings in advance, establish clear engagement objectives in unison and also, assess the company’s response after the meeting. All of the engagement reports are shared internally through a database using the Bloomberg terminal and can be accessed by every AXA IM staff with a Bloomberg account globally.

(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


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


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


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]

(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

07.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

07.2. Describe your organisation’s processes relating to sustainability themed funds. [Optional]

We have several sustainability themed funds :

1.PE Impact funds:

AXA IM manages Private Equity Impact Funds which invest in Financial Services, Healthcare, and Education globally.  

2.Listed Impact funds:

Framlington Equities currently has three Listed equity thematic impact funds, seeking clear alignment with UN SDGs and aiming to generate positive societal impact. The first is the AXA WF Framlington Human Capital which invests in European SMEs with well-managed human capital and focuses on two of the UN SDGs; decent work & economic growth and quality education. Through our engagement policy, the team maintains a constantan ongoing dialogue with the companies we invest in, especially HR teams to ensure good management of their human capital. The second is the AXA WF Framlington Women Empowerment which invests in companies that that create financial and societal value by fostering gender diversity and leveraging on the increasingly important economic role of women. The Fund focuses on three of the UN SDGs; gender equality, decent work & economic growth and reduced inequalities. The third one is the AXA WF Clean Economy strategy which aims to deliver long-term financial performance by investing in companies operating across the clean economy that develop activities which allow the energy transition and resource optimization. The Fund is targeting 4 UN SDG (Zero Hunger, Affordable and clean energy, Sustainable transport, Responsible consumption and production).

(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis




Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

AXA IM is committed to integrating ESG across asset classes, and Financial Analysts and Portfolio Managers are responsible for conducting corporate ESG analyses as part of their assessment of a counterpart..

In that perspective, they rely on the proprietary internal scores, as well as internal and external research, and are able to focus on ESG issues that are most relevant and material for their analysis. This follows an internal framework integrating all 3 ESG pillars through 6 factors (board oversight& control, management quality & incentives, human capital management, business behaviour, resource efficiency and environmental impacts) and then 13 sub-factors. Based on this framework, Financial Analysts and Portfolio Managers can put more or less weight to certain ESG factors depending on the relevance/materiality to the company/industry. This framework for analysis is also translated into various weights between E, S and G factors depending on the sector in the scoring model.

Please refer to LEI 01.2 for detailed description on the ESG integration approach for Framlington Equities and Rosenberg Equities

LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

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

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

ESG research produced in-house are communicated to portfolio managers through four different means:

1. Quantitative:

A proprietary scoring methodology is in place for corporates and sovereign assets, focusing on a more discriminating relative score, titled towards impact and materiality with greater emphasis upon controversies. Fund Managers and Financial Analysts have access to the ESG scores computed twice a year.

In addition, AXA IM has made available in the front office tools, and will continue to extend in 2019, a range of extra-financial data and analysis on ESG factors across asset classes and thus enables its portfolio managers to incorporate ESG criteria into their investment decisions. 

2. Qualitative:

Access to several ESG research providers has been extended to investment teams in 2018 (e.g. MSCI ESG, Oekom Sustainability, Vigeo, Sustainalytics).

3. Trainings: In the context of ESG integration, Financial Analysts and Portfolio Managers are now responsible for conducting corporate ESG analyses, and additional resources were recruited in 2018 within most investment platforms to support these efforts. The RI Team is currently training those later on ESG issues per sector and still support them when analyzing companies from an ESG point of view. Thematic training is also available (e.g. engagement, etc.).  

LEI 10. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis.

          Other adjustments include an adjustment to forward-looking risk at the portfolio and asset level

10.3. Describe how you integrate ESG information into portfolio weighting.

Rosenberg Equities uses a systematic approach to portfolio construction in which traditional alpha measures, traditional risk measures, and ESG information are used in portfolio optimization.  In this part of portfolio construction we look to maximize predicted risk adjusted return and improve ESG profile.  While there are some examples of stocks we will not invest in for ESG reasons (e.g. tobacco, severe controversy names), our process is not divestment-centric.  We prefer, instead, to let the ESG Score of any company influence how over- or underweight we will be in an individual position.

Framlington equities: Individual stock positions are sized on a return/risk basis, taking into account valuation upside, the market outlook, ESG profile and internal portfolio construction guidelines. We also maintain a strict sell discipline that includes triggers such as a stock meeting its valuation target and changes in the competitive environment, strategy or business model of a company. As we regularly monitor the eligible investment universe, we can also choose to sell a position when a better opportunity arises elsewhere.  Material changes to the observed ESG characteristics of a company in terms of risks or opportunities may contribute to changes in portfolio weightings or holdings.

10.4. Describe the methods you have used to adjust the income forecast/valuation tool.

At Rosenberg, we have several proprietary stock selection models including models that are focused on earnings quality (stability and magnitude of future earnings).  We have added diversity measures to this model as we’ve found that, among the most profitable firms, those with greater board diversity appear better able to preserve that profitability in the coming year.   Separately, an initiative for us in 2019 is to formally add carbon footprint into our valuation model.  Testing this model in preparation for this formal addition has resulted in an observed penalty on valuation when carbon footprint is modelled as a company expense.

10.6. Additional information. [OPTIONAL]

At Rosenberg Equities, we are interested in understanding the links between ESG criteria and fundamental drivers of risk and return within the public equity market. Our ESG research initiatives are focused on this type of fundamental analysis with the objective of improving the risk and return of our clients’ portfolios through robust ESG integration.  In the past year we have expanded our view of ESG to include ‘impact’ ideas within listed equities.  By doing this we can go beyond a company’s operational profile to also include products and services that a company makes (as proxied by revenue analysis).  We use this information to further up-weight or down-weight (or exclude) companies for our strategies that have an explicit UNSDG-aligned commitment.