April 2021

2020 Active Ownershipand Stewardship Report

Actively
investingto securea thriving,sustainable
future forpeople andthe planet

AXA IM’s 2020 Active Ownership and Stewardship Report details
our engagement and voting activity in a year marked by the COVID-19
pandemic. We believe that in moments of crisis, it is more important
than ever for responsible investors to make their voices heard.
The report also explores how environmental, social and governance(ESG) factors are integrated into strategies, and sets out someof our priorities for 2021 as we seek to help businesses andcountries take on the climate challenge.

Contents

Responsibility is at the heart of our businessResponsibility is at the heart of our business
Foreword by Marco Morelli, AXA IM Executive Chairman
page 3

Our purpose is to act for human progress by investing for what matters.
This is central to every decision we make. As a responsible asset manager, we actively
invest for the long term to help our clients prosper and to secure a thriving future
for people and the planet.

Engagement, collaboration and escalation

Engagement in the grip of a pandemic
Hans Stoter, Global Head of AXA IM Core
page 42020 Data Overview

behalf. We vote with conviction at company
meetings, and engage with intent. As you
will see in this report, climate change
was again the most significant theme
for our engagement with corporates andsovereigns in 2020, as it was in 2019.

page 5Engagement in action
Climate change, Biodiversity
Gender equality, Data privacy,
COVID-19 and public healthpages 6 to 11

Active ownership in fixed income
pages 12 to 13

How we conduct our engagement with companies
pages 14 to 17

The responsible mindset is integral for
AXA IM as a business, as an investor andas an employer. We seek to embed andchampion this mindset in our day-to-day
activities, allowing us to align with thevalues of our clients.

VotingHow we exercised our voting rights in 2020
page 18

Voting case studies
Our work with the banking sector and on linking pay
to ESG metrics
page 20

The voting process
pages 21 to 23

ESG Integration into Platforms

Putting ESG to work in portfolios

Chris Iggo, AXA IM Core Chief Investment Officer
page 24

Active Fixed Income, Framlington Equities,
Rosenberg Equities, US Active Investment Grade and
US/Europe High Yield, Real Assets		
pages 25 to 29

Governance, resources, incentives and monitoring

30

Client and beneficiary needs

32

Promoting well-functioning markets

34

Review and assurance

35

Complete list of engagements and themes

36

Appendices		

by Marco Morelli,
AXA IM Executive Chairman

I am now marking my first six months at
the helm of this company, and in my timehere I have seen how deeply the concept of
responsibility is engrained across the wholeorganisation and how my colleagues standunited in its cause. Where in the past we had
one central team overseeing Responsible
Investing (RI), there is now accountability
embedded across our business units,
investment platforms and RI experts. True
ESG integration has become a reality – theera of sustainability is reaching into every
asset class, every portfolio.
We are not a passive partner for clients.
We are an active owner of assets on their

We in the asset management industry
are uniquely placed to wield influence as
major investors in this area – exercising
our fiduciary duty to help accelerate thetransition to a more sustainable world.
Our wholehearted participation in thisextends not only to our stewardshipand engagement activity, but throughto our green investment strategies andour leading role in spearheading market
evolutions such as transition bonds.
We seek partnerships that allow us toactively power this transition and in 2020,
despite the pandemic providing a notable
drop-off in carbon emissions, we remained
keenly focused on efforts to combat climatechange, largely through several collective
engagement initiatives. Alongside many of

We engage where we think we can havean impact, but we must hold a mirror up
to our own company. Beyond responsible
investment lies our role as a responsible
business and employer which is central
to our objective of enhancing AXA IM’s
impact on society. We want our employees
to share in our vision and ambition sothat we can build role models from theinside out. To help us towards that goal
we are taking an active role in developing
careers and professional trajectories,
nurturing an inclusive culture andensuring our employees understand themechanics and importance of Responsible
Investing through mandated training. We
are supported in all of this by the scale
and ambition of our parent company,
AXA Group, which has made clear its
commitment to reducing the AXA global
carbon footprint by 25% by 20251. We
know that, together, we can make a realdifference.
We are by no means perfect and ourjourney still has distance left to run, but
we recognise that every action we takehas a consequence. We are serious about
ensuring that we uphold the same highstandards as an employer, partner andcompany that we expect to see in others as
an investor.

44-51

1

2 2020 Active Ownership and Stewardship Report

We have already seen signs that the global
economy will move to a more sustainable
and equitable model over the next decade.
It would have been easy to think that given
the pandemic, climate change may havecome off the agenda. COVID-19 has insteadincreased scrutiny of ESG factors andsharpened the understanding of how global
risks like climate must be fought.

our peers, we committed to bring carbon
emissions across portfolios to net zero by
2050, or sooner.

Environmental footprint management. Source: AXA Group

2020 Active Ownership and Stewardship Report 3

Engagement, collaboration and escalation

2020 Data Overview

Engagement in the grip of a pandemic

Our engagement with companies covers a broad spectrum of key ESG themes
Social relations

Business ethics

6%
Engagement is central to responsible investment at AXA IM. Our dialogue
with companies allows us to actively monitor our investments, and toensure we maintain open channels that can enable change to the benefit
of society, the planet – and ultimately our clients. We want to provide
transparency around investments, so that clients can ensure their holdingsalign with their own values. And we aim to be both a leader and a partneras the wider investment community addresses key challenges.

9%

Resource and ecosystems

Climate change

18%

27%

Public health9%
Human capital

Corporate governance

15%

16%

Hans Stoter
Global Head of AXA IM Core

Our work is framed by the expectations
set in the UK Stewardship Code, theUnited Nations-backed Principles for
Responsible Investment (PRI), the Task
Force on Climate-related Financial
Disclosures (TCFD) and many otherindustry initiatives which we support. We
focus in particular on the ESG themes weconsider to be most material to investors
and wider stakeholders. We conduct
extensive research on these issues2 anddeploy the insights gained to manage ourinvestments, engagement and voting.
In 2020, of course, our engagement
activities took on a dramatic newchallenge. The COVID-19 pandemic
forced companies into urgent action,

made in-person meetings impossible
and heightened the importance of issues
like human capital management. In thisenvironment it has been critical that
long-term investors help companies tokeep long-term challenges in mind while
delivering rapid responses to a live crisis.
It is a testament to the dynamism of our
Responsible Investment experts andportfolio managers that over this tough
12 months we managed to increase thetotal number of engagements by 47%.
And it was noteworthy that our deep
association with the Access to Medicine
Foundation meant we were in a position
to drive investor pressure in the healthcare
sector. We made sure companies knew

Engagement highlights in 20203
Our engagement in 2020 was naturally
affected by the coronavirus pandemic.
Our key observation was that investee
companies acknowledged that the crisisbrought public scrutiny on their ESGrelated practices, whether it was publichealth, human capital management orshareholder rights-related issues.
Our discussions with companies often
revealed the strain this placed on boardsof directors and senior management asthey navigated an unprecedented crisis.

2
3

319

Issuers engaged
in 2020versus 217 issuersin 2019

The engagement case studies following
this section reveal more about our
COVID-19-related engagements. Our
engagements, despite the pandemic andlockdown, remained driven by our longterm conviction in key thematic areas that

we expected solidarity – including thesharing of manufacturing capacity andintellectual capital – in the fight against
the virus.
AXA IM is a committed, active,
long-term investor across all markets.
These characteristics underpin ourrole as responsible investors too.
Our scale gives us influence, and our
deep experience means we know
to wield that influence with care.
For us, engagement can help protect
our clients from ESG risks right now– and help drive industries towards asustainable future in which we canall thrive.

122

engagements atsenior executive
or board director
level

we consider most urgent and material forinvestors – climate change, biodiversity
and human capital, alongside gender
diversity, public health, data privacy andcorporate governance.

In 2020, we engaged with companies across the world:
3.2% Australia
0.6% Austria
1.3% Belgium
0.6% Brazil
0.3% Bulgaria
0.6% Canada
0.6% Chile
3.8% China
0.6% Colombia
1.3% Denmark
0.3% Egypt
1.0% Finland
19.4% France
8.3% Germany
0.3% Guatemala
0.3% Hong Kong
0.3% Hungary
5.4% India
0.3% Indonesia
0.6% Ireland
0.3% Israel
3.8% Italy
6.0% Japan
0.3% Kazakhstan
0.6% Korea
0.3% Kuwait

Lithuania 0.3%
Mexico 0.3%
Morocco 0.3%
New Zealand 0.3%
Norway 0.3%
Peru 0.3%
Poland 0.3%
Portugal 0.6%
Qatar 0.3%
Romania 0.3%
Russia 1.3%
Saudi Arabia 0.6%
Slovakia 0.3%
Slovenia 0.3%
South Africa 0.3%
Spain 2.5%
Supranational 1.9%
Sweden 2.5%
Switzerland 2.2%
The Netherlands 2.2%
The Philippines 0.3%
United Arab Emirates 0.3%
United Kingdom 7.3%
United States of America 13.3%
Uruguay 0.3%

More than 80% of our engagements in 2020 were linked to the UN Sustainable Development Goals (SDGs).
The breakdown is as follows:

0.2%

0.0%

7.7%

2.7%

16.5%

0.6%

9.6%

4.6%

3.3%

3.3%

3.3%

11.1%

31.0%

1.9%

4.0%

0.0%

0.4%

DEVELOPMENT

The full list of Responsible Investment research published in 2020 can be found in the Appendices.
Figures in this section may be rounded

4 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 5

Engagement, collaboration and escalation

Engagement in action
Climate change
The coronavirus pandemic was extremely harmful for economies
worldwide but at the same time it delivered a sharp drop-off in carbon
emissions. With climate change at the forefront of policy and investment
discussion as the recovery takes shape, the question now is whether theworld can use this moment to build a less carbon-intensive economic anddemand model that could help achieve the temperature goals of the Paris
Agreement. It is a sobering thought that we would need to replicate– and more – the effects of the outbreak on carbon emissions if we areto keep global warming to within +1.5˚C of pre-industrial levels.
At AXA IM, we believe investors havea key role to play here through theirstewardship efforts. More than ever,they need to scale up their engagement
activities. We have argued in our research4
that investors should be using a 360°
view – engaging with energy and power
producers but also with end-use, demandside sectors – to promote both the shiftof energy supply mix and efficiency gains
from consuming sectors.

Our engagement goals and activity
Through the Climate Action 100+ investor
group and through dedicated bespoke
engagement projects, we have been in
dialogue with energy suppliers (across theoil and gas, power and metals and mining
industries), but also with demand-sidesectors (industrials, auto, airlines, realestate among others).
These discussions have had three areasof focus:■ Governance: Lobbying practices andremuneration■ Strategy: Intermediary targets andcapital expenditure (capex) plansaligned with science-based verification■ Disclosure: Clear articulation of climate
objectives and progress.

Results and next steps
On the supply side, we have been
particularly focused on the first net zerotarget announcements5 in the oil and gas
industry, where we have seen good initialcommitments (for example from BP, Total,
Repsol, ENI, Equinor, Royal Dutch Shell)and on coal engagement (from Engie,
Fortum, RWE, EnBW, BkW and Albioma).
We also believe we have made significant
progress in getting companies committed
to science-based intermediary targets(Renault, Alstria, RWE, for example).
However, companies also need to show
progress and raise the bar of theirclimate objectives. First, we think thatover the coming months and years theyshould set not only objectives for 2050
but also intermediary goals alignedwith science-based targets, as well as
engaging in ad hoc, effective actionsin the short term. Second, very few
companies, especially in the oil andgas industry, are already reporting on
their Scope Three emissions – thosecreated indirectly through the use of
products/services, or in the supply
chain. Third, we would like to see net
zero targets accompanied over time bytransparency on the strategy, on related
investments and on rollout plans.
According to the Climate Action 100+progress report, more than two-thirdsof oil and gas capex is still judged asinconsistent with the Paris Agreement
and the transportation sector is still notconsidered to be investing enough inelectric vehicles.
As we continue to promote the new
Climate Action 100+ Net Zero Benchmark,we will continue engaging withcompanies, including those alreadycommitted, to understand in detail how
they intend to achieve their climate
objectives.

45

At AXA IM we follow TCFD framework recommendations in termsof climate-related disclosure and integration of climate risks andopportunities in our business. In 2020, we worked on the notionof investment alignment principles and as part of that assessed
the global warming potential of certain AXA IM investments. The
warming potential of the AXA IM assets reviewed was calculated
to be +2.8°C, compared to +3.5°C for a corresponding benchmark.

We also continued testing new alignment metrics anddecarbonisation protocols while supporting AXA Group as
member of the Net Zero Asset Owner Alliance. Thanks to ourcollaboration in the exploratory phase, in December 2020, AXA
Group committed to an intermediate target of a 20% reduction of
its carbon footprint by 2025 versus 2019.

AXA IM Climate Dashboard: A combination of historical and forward-looking metrics
Transition
cost
VaR (1,5°C
scenario) [%]Cost ofclimate VaR(1,5°C
scenario) [%]Technology
opportunity
VaR (1,5°C
scenario) [%]Warming
potential [°C]

Carbonfootprint

Green Share[%]

Physical cost
VaR (Average
scenario) [%]

2019

2019

2019

2019

2019

2019

2019

AXA IM

2.8

181

14.1

-1.2

-5.4

-6.4

2.5

Weighted benchmarks by AUM

3.5

270

9.5

-1.3

-5.4

-6.8

2.1

Government bonds

2.7

157

26.2

JPM GBI Global

4.0

239

14.5

2.8

225

4.4

-0.1

-4.3

-4.5

0.1

3.1

305

5.1

-0.2

-3.8

-4.0

0.1

3.0

162

8.4

-3.3

-6.6

-10.2

7.0

3.0

251

7.9

-4.2

-9.5

-13.8

7.3

Asset Class

Corporates
BofAML Global Aggregate Corporate
Equities
MSCI World ACWI
Source: TCFD Report. Data as of Dec 20191.25 Listed Equity
This process of embracing carbon neutrality will continue
after we joined the Net Zero Asset Managers Initiative in
December 2020. Along with other investors, AXA IM will
explore how that route to net zero emissions might look.
A more precise announcement of the initiative’s rollout
strategy should be announced in November 2021.
While these exciting projects develop, AXA IM has already
implemented an active green investment programme of closeto €27bn across various asset classes including sustainability
bonds, thematic impact listed equities and real assets.

5%
Sustainablebonds 11.95€26.67

51% Real Assets 13.47
in
44% Greenbillion
Investments

Green Bonds

9.36

Social Bonds
Sustainability
Bonds

1.89

Real Estate
Equity7.51

CRE Debt

1.47

0.69

Infra Debt

3.37

Infra Equity

1.12

Source: AXA IM as of 31 Dec 2020

COVID-19: Greening the recovery. AXA IM. April 2020
AXA IM announced in December that it was joining the Net Zero Asset Managers initiative and will work in collaboration with clients to achieve a net
zero goal by 2050 or sooner.

6 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 7

Engagement, collaboration and escalation

Engagement case studies
Biodiversity collapse

Gender equality

We began 2020 by joining a call to find partners who could help
develop and implement a tool that measured the impact ofinvestments on biodiversity6. It supports our efforts to better
address the need for more biodiversity-related data, as well as moredefined metrics and targets. We believe such insights will be crucial
as this issue gains prominence. Our wealth and our health are
intimately connected to our sustainable management of the world’s
biodiversity, and only by respecting it will nature provide us with
our life support system.

We see COVID-19 as a wake-up call.
Scientists have predicted this kind of
pandemic for many years and they foresee
other major threats if we are not able
to make transformative changes that
address biodiversity depletion.
Our engagement goals and activity
Our engagement on biodiversity in2020 was research-led, following the
publication of our paper which discussed

the impact of agricultural activities anddependencies. In line with our findings,
among the 34 companies we engaged
with on biodiversity issues, we focused oncommodity traders7. Six traders control
around 60% of all soy exports from Brazil
which is identified for deforestation risks8.
In collaboration with other investors weencouraged traders to increase efforts
on no-deforestation commitments,
traceability and reporting.

Results and next steps
We saw a positive response tothis engagement, both fromcompanies and other investors.
Many companies provided evidenceof a heightened awareness of therisks from biodiversity loss. We willcontinue our engagement discussion
with most of these companies andexpect to broaden the scope of ourengagement in 2021 and beyond.
This engagement will be supportedby the selection of our biodiversity
data provider which was announced
in September 2020. It will help us
better assess our biodiversity impact
in 2021, target the companies with thegreatest impact and further feed our
discussions. Robust data can be thefuel for productive engagement on
responsible investment themes.

Last year saw us harden our commitment to drive better gender
diversity in our investments. Besides our own gender-related
engagement programme in various markets (following on from ourwork in 2019), AXA IM launched the 30% Club France Investor Group
which it will co-chair until the end of 2021. This is the first investor
coalition of its kind looking to engage on improving women’s
representation in senior executive teams in the French market.
We will collaboratively engage with companies on the SBF 120
stocks index with a target to make their executive management
teams at least 30% female by 2025. That will compare to just 21%
in 2020.

While the stated objective is to improve
gender diversity at leadership level,
our engagement with the main Frenchlisted companies will go much deeper.
We want to gauge the internal culture
and understand how a company isdeveloping and building its female talentpipeline internally. We want to avoida ‘barbell’ situation where only seniorleadership and the wider employee baseare relatively diverse, but where there isa clear disconnect at the intermediate
management level.

Our engagement goals and activity

6

7
8

AXA IM, BNP Paribas AM, Sycomore AM and Mirova launch joint initiative to develop pioneering tool for measuring investment impact
on biodiversity. Jan 2020.
Biodiversity crisis. AXA IM. September 2020.
Transparency for Sustainable Economies (TRASE) Insights.

8 2020 Active Ownership and Stewardship Report

Governance Code (AFEP-MEDEF)9 in
2020 requires companies in France todefine their own quota of women in
executive governing bodies. As there is
no precision on what a reasonable quota
would be, we aim to raise awarenessaround what investors consider theminimum appropriate level.
We had a surprisingly strong response
rate from companies congratulating
us on the initiative, while others wereinterested to know more ahead ofpotential engagement.

The coalition, which formally began its
work in mid-November, has designed a
two-fold strategy for 2020-2021.
First, we have established a restricted
list of target companies for which active
engagement will be used, based on theirgender diversity performance. We started
to meet companies from this priority list in
December and have a series of meetingsplanned for early 2021.

Results and next steps

Second, we have sent a letter to all SBF
120 companies, addressed to board
members or executives, to ensure they areaware of the initiative and its goals. The
creation of the investor group is timely: The
revised version of the French Corporate

We will also report on our activities andkeep developing and strengthening
connections with relevant stakeholders
including the 30% Club UK Investor
Group, business experts andgovernment representatives.

9

We saw that the topic resonated withthe market around the launch of thecoalition, and in 2021, the 30% ClubFrance Investor Group will welcome newjoiners, both international and from
France. As we grow, we will be able toexpand the list of target companies sothat we are on track to achieve our 30%
objective by 2025.

Code Afep- MEDEF révisé de gouvernement d’entreprise des sociétés cotées. January 2020
2020 Active Ownership and Stewardship Report 9

Engagement, collaboration and escalation

Engagement case studies
Data privacy

COVID-19 and public healthCollection of personal data has fuelled the rapid growth of internetbased technology companies. Firms that rely on the handling andprocessing of personal data are under intense scrutiny from customers
and regulators. As a global asset manager with extensive investmentsin the technology sector, we believe that we can have a positive role toplay in encouraging good data privacy practices10 and helping protect
clients from associated investment risks.

Our research found that companies
collecting personal data are exposed toregulatory, operational and reputationalrisks, and that a fine line separates
success from failure in terms of privacy
policies and practices. It framed our2020 engagement discussions with firms
exposed to data privacy issues.

Our engagement goals and activity

Results and next steps
We found that most of the firms wetargeted acknowledge the materialityof data privacy and are taking steps
to mitigate risks. We often received
positive responses from companies
with regards to management of privacy
issues and day-to-day practices. Someof the best practices we have seen
through our engagement include:

In 2020, we engaged with 20 companies
exposed to privacy risks around how their
way of working compares to the goodpractices we identified around:■ A company that established a dedicatedprivacy committee at board level■ Transparency on data privacy policies
and practices■ A company applying strict non-content
based and behavioural targeting,meaning that users’ data is not used topropose personalised advertising■ Oversight of the issue at board level■ Data collection minimisation■ A company that published a humanrights policy that encompasses privacy
issues.

■ Privacy by default
As part of this we sent an engagement
letter to the board chair at 12 of thosefirms, requesting information on theirdata privacy policies and practices andinviting them to begin constructive
and open dialogue on the topic.
Most companies responded positively– we had direct discussions with 16
out of 20. We were glad to see thattechnology companies were open to
discussion and willing to learn about
investors’ expectations around data
privacy.

Data privacy: Trust is hard earned, easily lost. AXA IM. Dec 2019
The Digital Services Act package. European Commission AXA IM. Dec 201912
The Digital Markets Act: ensuring fair and open digital markets. European Commission

We were also glad that the techcompanies we engaged with werealigned with our central message
on data privacy – that responsible
privacy practices are key in building
and maintaining user trust. We believethat this allows responsible firms tocreate and deliver sustainable, longterm value through the collection andprocessing of data.
In 2021, we will continue our engagement
programme with firms exposed to privacy
risks, as work still needs to be done. In
addition, we believe that scrutiny aroundcorporations collecting personal data will
be even greater in 2021. Most notably, the
US Federal Trade Commission recently
ordered some technology companies
to share information about how theycollect and use data, while the European
Commission targeted digital economy
firms in its recent Digital Services11 andDigital Markets Acts12.

The scale of the COVID-19 pandemic is unprecedented but the dynamics
of the disease – how it spreads and affects patients – were arguably
predictable. Coronavirus has exploited well-established inequalities
in society and vulnerabilities in healthcare systems. So although thishighly infectious disease has impacted all our lives in some way, it has
not affected us all equally. These have been long-running concerns in
our engagement with investee companies on global health.
Our engagement goals and activity
AXA IM is a member of the Expert
Review Committee of the Access to
Medicine Foundation, a well-regarded
not-for-profit organisation which conducts
research into pharmaceutical companies’
sustainability practices. We have leveraged
this position to conduct extensive in-depth
engagement with the sector in recent
years. This meant that when the pandemic
struck, we were able to engage companies
on their COVID-19 response in an efficientand positive fashion.

distributing new medicines and vaccines
will be faster and more efficient if
governments and pharmaceuticalcompanies work cooperatively and avoid
a competitive race based on medical
nationalism.
We urged pharmaceutical companies toundertake the following practical steps
to accelerate research and development
efforts and overcome potential barriers to
rapid and widespread access to COVID-19
medicines and vaccines:

We engaged with 28 healthcare companies
on these issues in the first half of 2020,
calling for them to share coronavirusrelated intellectual capital, assist with
manufacturing capacity to scale-up
production of effective treatments andto set affordable prices. This included acollaborative investor initiative which saw
us write to major pharmaceutical firms
alongside more than 60 other financial
institutions. We also made a direct positive
impact by becoming a major donor to theAccess to Medicine Foundation13.

■ Share intellectual capital — including
molecule libraries, patented
compounds, processes or technologies— across the industry and withresearch institutions to facilitate thedevelopment of the most effective
technologies

We also published an open letter in the
media alongside fellow investor Legal& General Investment Management
and the Access to Medicine Foundation.
We publicly called on fellow global
pharmaceutical investors to step up
their engagement activities and ask
all governments and pharmaceuticalcompanies to fully embrace the principles
of collaboration and solidarity in our
response to COVID-19. The processof developing, manufacturing and■ Share manufacturing capacity if theirown clinical trials are not successful tohelp speed up production of effective
products from other companies■ Work with governments across alllevels of income, not just higher-income
countries, to ensure rigorous but
accelerated marketing authorisation
processes■ Set affordable prices based on different
countries’ ability to pay to empower
rapid government procurement■ Agree to non-exclusive voluntary
licensing agreements withquality-assured generic medicine

manufacturers to mitigate the risk of
supply constraints in low- and middleincome countries■ Work with governments andinternational organisations, in particular
the Access to COVID-19 Tools Accelerator
and the COVAX Facility, to develop
and implement a global allocation
mechanism to distribute medicines andvaccines with the objective of maximising
the reduction of COVID-19-related deaths
and protecting health systems
Our goal is not only to promoteresponsible behaviour at the companies
in which we invest, but also to boost
the pace and resilience of the global
economy’s recovery from this crisis, to theultimate benefit of our clients.
Results and next steps
We saw positive responses to our
engagement from companies and otherinvestors, which was encouraging, andmany healthcare companies provided
evidence of senior-level commitments tohelping overcome the COVID-19 pandemic.
However, we continue our discussions
with companies which are working
through exactly how these commitments
will accelerate into impactful practices andwhat the results of these actions will be in
2021 and beyond.

1011

10 2020 Active Ownership and Stewardship Report13

AXA IM to partner with the Access to Medicine Foundation and develop a philanthropy mechanism on its impact fund range. May 2020
2020 Active Ownership and Stewardship Report 11

Engagement, collaboration and escalation

Active ownership in fixed income
Green, social, climate transition and sustainability linked bonds

Sovereign bond issuer engagement

Engagement with bond issuers is an important aspect of our active ownership programme
as we are long-term investors and often hold bonds to maturity. Engaging on ESG issues is a
critical way to ensure we manage the value of our bond investments over time.

Engagement on sustainability between investors and sovereign issuers isstill in its early stages. Sovereign issuers have traditionally focused mainlyon the needs of the government and the country’s citizens rather than thoseof the global institutional investors who are buying their bonds. However,
we are seeing sovereign issuers becoming more open to engagement andto taking on the views of investors – this has been particularly noticeablearound green bond issuances in recent years.

Our engagement goals and activity
In 2020, we engaged with 30 issuers ofgreen, social, climate transition andsustainability-linked debt instruments,
many of which were bond-only issuers– that is, organisations that do not issue
shares. These were sovereign issuersand supranational entities such as
development banks as well as privately
held companies.
We held extensive discussions about
their commitment to a robust climate
and sustainability strategy and theirprovision of clear, ongoing reporting on
how a bond’s proceeds are used.
We also used this opportunity to discuss
other thematic areas of interest to us.
Given upcoming developments on thegreen, social and sustainability bonds
market – notably the EU sustainablefinance taxonomy14 and the European
Union (EU) green bond standard – wediscussed how bond issuers are preparing
and adapting to new standards.

Separately, we co-chaired the Climate
Transition Finance Working Group under
the auspices of the International CapitalMarket Association’s (ICMA) Green andSocial Bond Principles. It consistedof more than 80 market participants
including many corporate bond issuers.
We shared our views and expectations
on how issuers from carbon-intensive
industries can raise money to finance theirtransition to a greener, Paris Agreementaligned business model. As a result of thisworking group, the ICMA publisheda Climate Transition Finance Handbook15,
which will help bond issuers in structuringtransition bonds.

Results and next steps
We generally had high quality
engagement discussions with bondissuers – particularly green, social andsustainability bond issuers. Principles andguidelines for issuing such transactions
are well understood. Therefore, the main

topic on which we challenged issuers was
to make sure that debt raised is usedas part of a robust sustainability strategy
where actions are taken to align businessmodels with the objectives of the Paris
Agreement. We believe our desire to be aleader in this field has pushed many fixedincome issuers to seek our views on ESG
topics. We are pleased that many havetaken tangible steps in the transition toa low-carbon economy.
In 2021, we will establish a list ofgreen, social and sustainability bondissuers where we have identified what
we believe to be weaknesses in theirframework and sustainability ambitions.
We will push them to align with bestpractices on the market. We will alsoestablish a framework for assessing
transition and sustainability-linked
bonds, which will allow us to engage andshare our expectations with bond issuerson these types of transactions.

During the summer of 2020, we initiatedengagement with 40 sovereign issuers16.
We sent a survey aiming to establish
a dialogue that encourages concrete
progress in terms of sustainable
development. This is part of a multi-year
engagement plan to better understandhow our investments into sovereignissuers are considering ESG mattersand the UN SDGs as part of their debt
issuance programme.

Results of the survey

We consider that the sustainabilityrelated health of sovereign nations
contributes significantly to the capacityof governments to issue debt andrepay it. We want the financial healthof countries to be aligned with broader
policy aims – such as those described in
the UN SDGs.

Three-quarters of respondents viewed
our approach positively and said they
were ready to engage on the UN SDGs
or ESG issues. The SDGs most often
mentioned were: SDG 6 – Clean Waterand Sanitation; SDG 13 – Climate Action;and SDG 16 – Peace, Justice and Strong
Institutions.

Our 38-question survey was sent
to representatives of the Treasury/
debt management agency in order tounderstand their:

This survey was a first step in AXA IM’s
engagement with sovereigns. This year
we will reinforce our dialogue with thosethat answered our survey and develop
the relationship with the others.

One in four of the sovereigns targeted
responded to our survey, most of whomanswered the questions directly, whileothers responded in a dialogue by
telephone or mail. One key finding wasthat the respondents had not received
other surveys or information aroundan engagement programme from otherinvestors. AXA IM’s engagement outreach
was unique.

■ ESG strategy■ SDG-related priorities■ Bond issuance programme (Green,
Social and Sustainable)■ Openness to be engaged
We want to engage with sovereigns on
AXA IM’s priority UN SDGs. These include:
SDG 13 – Climate Action; SDG 15 – Life on
Land; and SDG 14 – Life Below Water. We
will also look at specific SDGs where webelieve the sovereign is lagging, based on
our research.
16

EU taxonomy for sustainable activities. European Commission
15
Climate Transition Finance Handbook. ICMA
14

12 2020 Active Ownership and Stewardship Report

Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, China, Colombia, Czech Republic, Finland, France, Germany, Hungary, Italy, Japan, Kazakhstan,
Korea Republic, Kuwait, Lithuania, Morocco, Netherlands, New-Zealand, Peru, Philippines, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Slovak
Republic, Slovenia, Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom, United States, Uruguay.
2020 Active Ownership and Stewardship Report 13

Engagement, collaboration and escalation

How we conduct our engagement with companies
AXA IM’s active and long-term approach means our relationship with investee
firms can continue for many years – decades in some cases. We have a duty
to our clients, our colleagues and wider stakeholders in society to monitor
and engage with companies for the entire time that we hold their stocks andbonds – and in a fashion that helps protect all our interests long into the
future.
At the heart of this is our ambition toachieve a clear ‘win-win’ of improving
risk-adjusted returns while contributing
to broader societal and environmental
objectives as defined in the UN SDGs.

outcomes helps us reach our goals forclients and society in the long term.
We also seek to work collaboratively
with other investors to achieve sharedobjectives17.

For us, active ownership is about making
the most of our rights as an investor to
engage investee companies in productive
dialogue that makes a tangible
difference. So how do we do this?

We are responsive and alert: Although
our core engagement approach is to beproactive, we recognise that there arecases where major controversies occur,or international norms are breached.
Such norms include the UN Global
Compact (UNGC) – a set of principles
based on corporate commitments toimplement sustainability principles. In
these cases, we will assess the severityof the cases through our ESG Monitoringand Engagement Committee andconsider whether to engage on a reactive
basis or take other decisions such as todivest.

We are proactive: We strive to engage
companies before concerns materialisethat can potentially harm investors.
We commit our efforts to those ESG
issues which we consider to be the moststrategically and financially material for
long-term investors. These are climatechange, biodiversity, human capitalmanagement, public health, data privacy
and corporate governance.
We are research-driven: As a truly
active investment manager, we conduct
in-depth analysis of companies andthe broader macroeconomic backdrop
and incorporate ESG factors into that
research from the very start. That
ensures ESG can shape investment
outcomes. Our engagement and voting
are built on the knowledge and insights
we have developed.

We also act quickly and decisively
in cases where companies are in breachof our internal ESG investment exclusion
standards and policies. These include
limits on coal usage or involvementin products and services such as tobacco,
controversial weapons and palm oil18.

We create impact: Investors can drive
impact in their investment activities bypressing for change at corporations –influencing the way they behave anddo business. We focus our engagement
where we believe it can have the greatest
impact and consider how it can alignwith the UN SDGs.
We are an industry leader: Taking a boldstance on difficult issues and committing
resources to delivering engagement

Drilling down into engagement approaches
At AXA IM, responsibility for stewardshipfalls on a wide range of teams. These
include (but are not limited to):■ Active ownership specialists – ESG
engagement analysts

We have rolled out a clear process for selecting priorities, which can be addressed in combination:■ ESG stock/bond analysts andimpact investment specialists within
investment platforms■ Fund managers and analysts■ Public policy and regulatory
professionals

14 2020 Active Ownership and Stewardship Report

Reactive: While our core engagement strategy is proactive,
there are some cases when we need to engage in response to a
specific event. These can relate to:▶ Focus list: Every 12-18 months, we produce a list ofcompanies for which intense and repetitive engagement
is conducted on one or two key issues. Objectives are
set upfront and resources allocated. This is the priority
list for which we expect regular individual engagement
meetings, updates and action▶ Severe controversies19 and UNGC breach20: For AXA IM’s
ESG-integrated/sustainable/impact strategies, we exclude
investments in issuers which are impacted by a severe
controversy – where holding securities from that issuer could
pose a significant financial and/or reputational risk. Severe
controversies are largely defined as UNGC breaches, but
we can also exclude investments where issuers have been
involved in other types of controversies.
In certain cases, we decide to engage to discuss with thecompany the credibility of corrective actions put in place toresolve the issue, instead of divestment. Such an exemption isdecided by the ESG Monitoring and Engagement Committee
after a qualitative review of the stock and internal agreement
between the stakeholders of the Committee▶ Thematic projects: In addition to the focus list,
we also conduct engagement projects on specificthemes. These projects cover a wider universe ofcompanies in any relevant market, sector or asset class.
On average 20-40 companies will be targeted throughthis approach.

The ultimate responsibility for stewardshiplies at AXA IM board level.
Nevertheless, our RI specialists have a
responsibility to formulate the broader
engagement programme and make asignificant contribution to engagementwith issuers. Engagement by the RI
specialists is performed across asset
classes. We also provide leadership andinput on stakeholder communication,client reporting, and internal training.

Annual general meeting voting: Before and after
votes, we conduct extensive discussions with companies
on corporate governance matters, voting resolutions atupcoming meetings and, increasingly, on sustainability
issues which are a focus of shareholder proposals. We
also provide full transparency on our voting actions withcompanies and our voting records. This is a fundamental
aspect of our fiduciary duty to clients.

Investment teams empower their analysts
and portfolio managers to engage
companies on ESG issues – in a similarvein as they do for financial analysis. This
covers ESG analysts, impact investment
analysts, and stock/credit analysts. Many ofthe engagement meetings are conducted incollaboration with the RI specialists.

We vote in a manner that is intended to be beneficial
to the long-term, sustainable value of the companies inwhich we invest. Areas of support or dissent can relate to anumber of sustainability-related issues, such as executive
remuneration, climate and diversity – which we havecaptured within our dedicated voting policy. Voting may
occasionally be used as an escalation option if we believe
engagement on a thematic issue has stalled. For moredetail, see the Escalation section.

▶ Sectoral ban lists: Any update of our sectoral ban lists canalso lead to some companies being automatically excluded.
Again, the ESG Monitoring and Engagement Committee canadvise to engage rather than exclude▶ Negative news flow: We often hear negative news flow from
our investee companies. While these are not necessarilyranked as ‘severe’ controversies by our controversies researchservice provider, we might want to engage with the company
to obtain a better understanding of the issue and assess thequality of its response.

Opportunistic: Our relationships with companies mean weare often invited to attend conferences, roadshows or field
trips. This is an opportunity to learn more about companies’
actions, policies and performance while at the same time
updating them on our areas of focus and scrutiny.

The common thread in all the above engagement approaches lies in the way they are
conducted. Conversations with companies are generally confidential and do not go
beyond AXA IM and/or specific stakeholders. This stems from our belief that long-runningconfidential and constructive discussions based on trust are the most effective route tocreate change over time.
19

See Collaboration Section below
18
The full list of our ESG investment exclusion policies and standards can be found here.
17

Proactive: We engage in a proactive fashion on material
ESG areas. There are two main approaches in place tofacilitate proactive engagement:

20

As per AXA IM’s ESG standards, a severe controversy is when our ESG data provider Sustainalytics rates a controversy as level five (out of five).
There are 10 UNGC principles in the areas of human rights, labour, the environment and anti-corruption. Any breach would hint a lack of integrity andresponsibility within companies that we want to avoid.
2020 Active Ownership and Stewardship Report 15

Engagement, collaboration and escalation

Collaboration

Escalation

Most of our engagement is based solely on our own efforts, but wealso believe that collaborating with other like-minded investors
and stakeholders can help us to achieve our goals. We participate
actively in key industry initiatives such as Climate Action 100+21, and
the Access to Medicine Index22.
When deciding which initiatives to participate in or support, we
focus on topics and groups where we believe our involvement

will have a material impact. Impact can often be greater by
joining forces with other investors and stakeholders, so we use acombination of collective and individual engagement.
We play a proactive role in several industry initiatives and groups
and take a leadership role as often as possible, as shown in the
Appendices.

We track engagement progress on a scale of zero to five, which sets
out the range of possible outcomes:
section for further details) due to a lack ofprogress. Some of these may be recorded
as engagement failures in the coming year
or two.
Examples of milestones where ourengagement, alongside those of other
responsible shareholders, has coincidedwith corporate action include:23■ Climate change – Repsol: Spanish oilcompany Repsol aims to achieve net
zero emissions by 2050, making it thefirst oil and gas company in the world toassume this ambitious goal. At the sametime, it is setting a decarbonisation pathwith intermediate targets for 2020 to2040. We have already been engaging

In 2020, we recorded 23 milestones –instances of achieving our engagement
objectives or what we label Stage 5 in thechart below. These were with 21 issuers.
We recorded no engagement failures (Stage0) in 2020. However, we have escalated
our engagement with 30 issuers (see next

1

2

Engagement
commences

Company
Responds

3 months

4

5

Company
acknowledges issue

Engagement succeeds(milestone)

30Insufficient progress;
escalation

Engagementfails

6 - 18 months

24 -36 months

Source: AXA IM■ Targeting more senior input: We may seek to move thediscussion up the corporate chain, ultimately through to chief
executive/chair level■ Collaborating with other investors: Working with otherinvestors can send a unified message through formal industry
groups or via ad-hoc associations

Tracking engagement progress

Every engagement has its objectives
established upfront. We conduct theengagement with issuers and trackprogress over time. We usually consider
36 months to be a reasonable timeframeto achieve an outcome from the inceptionof engagement. This obviously differs
according to the nature of the objective,
the country of the issuer and the thematicarea.

Engagement does not always progress smoothly. Responses given by companies canbe either unsatisfactory or slow. It is crucial in such cases to escalate the issue to keep
the process moving and maximise the chance of meeting our engagement objective.
Here again, there are multiple options available for escalation:with Repsol intensively in recent years
on this issue both through one-to-one
dialogue and through collaborative
initiatives.

■ Voting against resolutions at annual general meetings(AGMs): We use voting as a mechanism to escalate engagement
concerns. When engagement on key themes has stalled, weshow dissent through a vote against specific resolutions.
Alternatively, we may consider co-filing a resolution on specific
ESG issues■ Business conduct – Novartis: The
Swiss pharmaceutical giant announced
key steps to resolve all outstanding
legacy compliance breach cases. Thesesettlements resolve longstanding major
litigation and investigations related toprofessional practices in certain Novartis
businesses around the world thatdate from 2007-2016 and an antitrust
investigation into the US generic drug
industry that focused on the period
between 2013 and 2015. We have been
engaging the company on this issue fora number of years but intensively so in2019 when we visited the company at
its Basel headquarters and also met thechief executive in London with otherinvestors to discuss these issues.

■ Public policy engagement: Involvement with policymakers is a
key part of our active ownership strategy. As interest in ESG grows
among clients and regulators in many geographies, the need forclearer definitions and usable standards is a top priority for thefinancial industry. We aim to play a proactive role in helping toshape public policy in areas where we have seen a reluctance fromcompanies to seek progress.
■ Divestment: In certain cases, we consider divestment as a means
to put pressure on the company to change its practices (see casestudy).
These escalation options are not exclusive and can be used in
combination. In 2020, we escalated our engagement with 30 issuers.

Escalation case study: State Bank of India24
We invested in the State Bank of India’s green bonds in 2018.
We then engaged the company to end lending activities
related to coal mines including the large Carmichael projectin Australia. We explained that such major new mines willbring volumes of coal output to the market which are misaligned with the carbon budgets defined by scientificallycredible +1.5° C global warming scenarios. Despite ourefforts (and those of other investors), the company was not
responsive to the engagement. Following further analysis
and review of the bank environmental lending practices, wetook the decision to divest from the company’s green bond.

■ Board independence – Fanuc: The
Japanese factory automation androbotics company has made significant
reforms in recent years to its governancepractices including its board structure.
It has gone from an all-insider board in2013 to establishing one-third board
independence in 2020. Also, the new
independent director is female – which
is a first for the company. We have been
engaging Fanuc over several years
through meetings and our voting.

Climate Action 100+.
Access to Medicine Index. Access to Medicine Foundation
23
These examples are provided for illustrative purposes only and do not constitute investment advice or an investment recommendation
21
22

16 2020 Active Ownership and Stewardship Report

24This example is provided for illustrative purposes only and does not constitute investment advice or an investment recommendation
2020 Active Ownership and Stewardship Report 17

Voting

How we exercised our voting rights in 2020
Extraordinary and unprecedented. These now familiar words describe all our private andworking lives over the last 12 months – and they also capture the nature of corporate activity.
Companies have been forced to adapt at a faster rate than at any time in living memory
as the impact of the pandemic and its aftermath became clear.
We would argue that the engagement
work carried out by responsible
shareholders over the preceding years
helped prepare companies to do thatsuccessfully. Investors have pushed
executives to define their corporate
purpose and put it into action. They
have challenged companies on
worker rights, encouraged robust risk
mitigation and strong board oversight,
and argued for the alignment ofexecutive pay with the broader
workforce.
Voting at company meetings has been
an important part of that process tobuild sustainable businesses. The
way we use our voting rights to holdcompanies to account reflects whether
firms have normalised these topics
as part of everyday good governance.
Our votes also reflect how companies
have treated employees, respectedshareholder rights, adapted executive
rewards and positioned corporations
in society during these challenging
times.

remains steadfast and we continue to holdinvestee companies to high governancestandards. These are defined by our inhouse voting policy25.

2020 highlights and voting statistics
During the year we exercised our clients’voting rights globally in line with ourinvestment footprint.
Some key points from the year include:■ Social lockdowns imposed bygovernments globally made it hard forcompanies to hold the usual in-person
AGMs. Many moved to online meetingson an exceptional basis – with varying
degrees of success■ The pandemic has forced many
companies to ask themselves what theystand for beyond profit. There is a greater
emphasis on corporate purpose and how
this is integrated into the business

Voting, therefore, is an important partof how we exercise our investor rights
and engage with investee companies.
AXA IM is a global asset manager witha commitment to market-leading
practices in stewardship, so we
consider voting to be a fundamental
aspect of our fiduciary duty to clients.
We vote in a manner that is intended
to be beneficial to the long-termsustainable value of the companies inwhich we invest.

Meetings voted and level of dissent

We recognise the need for flexibility
and prudence in our voting approach
during a global crisis, however, ourcommitment to strong governance

5500

from last year (see chart on precedingpage)26■ The pandemic has also amplified theneed for companies to act urgently
to address climate change. COVID-19
has highlighted how critical it is forbusinesses to act rapidly to address athreat. Climate is accepted as one of
the most pressing issues of the decadeand corporate leadership has now seen
the tremendously high cost of being too
slow to react

6100

46%
39%

Accounts and auditors
Diversity
Articles of Association
Other
Business Reorganisation/M&A

11%

ESG opportunities and risks

Much of the focus this year will be on how companies have responded to the pandemic. The themes will include
employee safety and protection, dividend policy and capital raisings, how executive pay has aligned with the wider
workforce impact and how board actions during the year were able to manage systemic risks.
Similarly, as we look beyond the short term, much of the next decade will continue to be defined by our collective
ability to turn ambition into action on global issues like climate change, biodiversity loss, gender diversity and data
privacy. On voting and engagement this will mean:■ Driving companies to raise the bar on their climate
objectives by providing transparency on theirstrategy, investments and rollout plans to meetbroader 2050 climate neutrality objectives28. This will
include pushing companies to disclose intermediarytargets on the route to that ultimate goal

60%
50%

■ Engaging the financial sector on its climate
commitments and financing of the energy transition

30%

5814

■ Using a climate voting policy to target thosecompanies considered climate laggards

20%

5700
10%

5600

■ Enhancing our gender diversity voting policy indeveloped market economies where women do not0%
General Meetings

Remuneration

Our voting priorities for 2021

40%

5932

2017

Board issues
Capital issues

25%

6016

5900

32%
8%

make up at least one-third of the board. In addition,
engaging companies on the topic of racial diversity on
boards and across the organisation■ Engaging companies on systemic risks and humancapital issues as a top priority

42%

6000

5800

6247

3% 2%

5%

■ We continued to challenge company
boards on worker rights and employee
safety in the face of the pandemic■ We voted against management on atleast one resolution at 56% of company
meetings. This was a notable increase

56%

4%

10%

■ COVID-19 has also highlighted theimportance of board oversight ofmanagement. Executives have been
forced into quick decisions to copewith the short-term impact of thepandemic whilst maintaining thoughtfulconsideration of the longer-term
implications, and of the need to keepshareholders and stakeholders informed

6300
6200

■ We enhanced our voting policy on key
topics including board gender diversity,
time commitment of directors, auditor
rotation, and the integration of nonfinancial ESG metrics into executive
compensation27

Our votes against management by topic

2018

2019

2020

■ Challenging companies on supply chain optimisationand transparency on data privacy policies andpractices■ Generally enhancing the use of voting as a tool toescalate stalled engagement on key themes identified
by our research specialists, including climate,biodiversity, public health, and data governance% meetings with at least one vote against management

In absolute terms, 13% of votes cast were dissenting. Source: AXA IM
2020 Voting Policy Updates. AXA IM
282050 long-term strategy. European Commission
26
27

25

Corporate Governance & Voting Policy. AXA IM

18 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 19

Voting

Voting case studies

The voting process

Engagement with banks around business ethics, corporate governance,and climate commitments

We consider voting to be a crucial aspect of being an active shareholder. It is a vital partof the investment process and an opportunity to influence companies. Our voting andengagement activities are closely aligned. We regularly engage companies before and after
the vote. AXA IM has established a Corporate Governance Committee which is responsible foroverseeing the implementation of AXA IM’s Corporate Governance & Voting Policy. The Policy
is reviewed and updated annually by the Committee prior to voting season to apply to all
meetings going forward.

With our engagement priorities for 2021 in mind, we
have already been laying the foundations for important
discussions with banks and financial institutions on
business ethics, corporate governance, and climate
commitments.
Our engagement goals and activity
We believe that our voice and our expectations as responsible
investors are vital at a time when the sector faces a difficult
macro and competitive environment, after experiencing highprofile controversies around failures in internal controls andbusiness ethics. Most importantly, investor voices must be heard
on the sector’s crucial role in financing the transition towards a
low-carbon economy29.
Our engagement has therefore continued through 2020 and into
2021. Reactions have ranged from positive and constructive tosome situations where change has been slow to materialise. At one
major Nordic bank, the engagement process led to an enhanced
dialogue at a board leadership and executive level, where theidentified issues were acknowledged, progress explained,
and reporting against identified metrics led to us reaching an
engagement milestone. At a peer bank, however, the engagement
did not yield such positive results. While the issues we noted wereacknowledged, change or progress was not observed. This maylead to a voting escalation if objective reporting against identified
key performance indicators (KPIs) is not observed and where no
progress is verified on the identified issues.

Results and next steps
We will continue this engagement effort through 2021, with anincreased attention to banks’ climate commitments and to any
concrete steps taken to finance the transition to a low-carbon
economy, and to ensure that climate risk is accounted for. We
expect to see progress against clearly set expectations.

The Committee comprises regulatorycompliance and responsible investment(RI) specialists as well as representativesof investment teams, who bring theirhands-on investment perspective to
the Committee’s deliberations. Our RI
specialists oversee the implementation of
the regular policy and guidelines. Where
there are complex, controversial or nonroutine cases, or where we may wish to
deviate from our policy, our RI experts
consult with and make recommendations
to the Committee.

or recommendations. For pooled andsegregated accounts – where clients havedelegated the exercise of voting rights to
us – these would be voted in line with the
AXA IM Corporate Governance & Voting
Policy.

The relevant RI specialists will set out
an explanation of the issue in question
and make their recommendation.
The Committee members deliberate
independently on any issue ofconcern and provide their views and/During 2020 we voted at 6,247 shareholder
meetings representing 98% of meetings
where we had a legal right to do so.
Unvoted meetings were primarily due
to markets that have varying degrees ofshare-blocking requirements that make it

In 2020 we updated our policy on gender
diversity and over-boarded directors,
long-tenured auditors, and on links to
ESG-performance criteria in remuneration,reflecting some of our key thematic
priorities as an organisation.

difficult for AXA IM to exercise its votes inthese rare cases.
We vote against items at annual meetings
where we believe the proposals are notin the best interests of our clients. This
covers a wide range of concerns suchas the suitability of individual directors,
board oversight of key risks and strategy,
executive pay, dividend and capitalrelated issues and diversity as well astransparency and reporting. We also voteagainst proposals as a method to escalate
our engagement where sufficient progresshas not been made.
While local best practice codes may
adopt different approaches, we expect allcompanies to seek to closely align withour core global governance principles

Executive remuneration linkage to ESG metrics
We engaged in constructive dialogue with an Italian company that
consulted us to hear our views on executive remuneration andfollowed up with an end-of-year meeting to provide a review.

a general level we have also made the integration of ESG metrics
into executive remuneration a key focus of our engagement withcompanies generally.

Our engagement goals and activity

Results and next steps

During our meeting with the company, we conveyed our view thatlinking ESG metrics to executive remuneration is an importantdemonstration of a commitment to tackling ESG risk management
at a Board level.

We will continue our engagement and voting demands at thiscompany and others, seeking to secure disclosure around theachievement of extra-financial performance against ESG targets
and to monitor the stringency of the targets set under thosemetrics.

We had been pushing for the inclusion of ESG metrics in executive
pay at this company for a couple of years, asking for tangible ESG
metrics, in line with the strategic ESG goals the company has
set in its extra-financial disclosures, and in a way that cannot be
construed as an addition of ESG goals to adjust remuneration
upwards. In this case, ESG metrics were added to both the shortand long-term remuneration components which we deemed to berobust, stretching, and in alignment with the company’s KPIs. At

29More broadly, the continued integration of ESG metrics
into executive remuneration will remain a key focus of ourengagement with companies generally and may impact how wevote on remuneration related proposals in 2021. Increased focus
will also be placed this AGM season around executive pay-outs,
closely monitoring the use of discretionary Board decisions indetermining pay awards this year.

Financing brown to green: Guidelines for Transition Bonds. Source: AXA IM

20 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 21

Voting

The voting process (continued)
which set out the fundamentals of corporate governance. With allcompanies, AXA IM considers these principles in conjunction with
region-specific policies in our voting and engagement activity.
AXA IM publicly discloses its voting. It is updated on a quarterly
basis and we provide the rationale for why we voted against
management. The records contain the historical voting record
at company level and a rationale for all votes cast against
management recommendations. These reports are available on
our website30.

Voting research
AXA IM uses voting information services from Institutional
Shareholder Services (ISS), Proxinvest, and Institutional

Voting Information Service (IVIS). The research received isused to augment knowledge of companies and resolutions
at forthcoming general meetings – it is one input among
many. When making voting decisions, we also incorporate
internal knowledge and research, intelligence gathered fromengagement with the company, fund manager input andcommittee considerations. All voting decisions are made by
AXA IM and are based on our Corporate Governance & Voting
Policy.
In order to assure quality, we carry out an annual service review
with each of our voting research providers which includes anevaluation of the research and service received as well as any
necessary discussion about upcoming changes to policy andservice.

Stock lending
Some clients have decided to participate in stock lending
programmes. The attendant transfer of voting rights alongwith the lent shares means that additional scrutiny is required
to ensure that lent shares are not put to purposes that are
detrimental to the long-term interests of shareowners. Shares
will not be lent where the objective of such activities is to voteat general meetings. More fundamentally, AXA IM recalls all
shares, ahead of record date, in advance of general meetings
to exercise our full voting right for open-ended funds andmandates.

Conflicts of interest
AXA IM has adopted a set of guidelines to identify circumstances
which may give rise to conflicts of interest.
In general, we consider that a conflict of interests can occur
especially between a client and:■ Another client■ AXA IM, or one of its collaborators (or any person or company
directly or indirectly linked to them)■ A related company, one of its delegates or subdelegates, aservice provider or another entity of the Group (AXA IM or
AXA), an introducer or any commercial intermediaryBy ‘conflict of interest’ we mean a situation where the interestsof AXA IM, of AXA IM’s employees, of a third-party delegate ora related company are, directly or indirectly, in competition
with the interests of one or several clients. It also pertains topotential conflicts that may occur between AXA IM’s clients.

30

Voting results site. ISS

22 2020 Active Ownership and Stewardship Report

In relation to stewardship activities,
including engagement and voting,
AXA IM has adopted a set of guidelines
to identify circumstances which may
give rise to conflicts of interests. These
guidelines include relationships withlisted affiliates such as our parent
company, AXA Group, key clients, andsignificant suppliers.
We manage conflicts within our voting
and engagement activities using thefollowing approach.
First, the engagement programme at
AXA IM is a proactive approach with aclear process for selecting priorities– including planning, prioritisation,
execution, and reporting. The
engagement programme is supervised
and governed by the ESG Monitoring &Engagement Committee. This ensuresthat decisions taken to engage arealigned with the engagement strategyof AXA IM and are free from any outside
influence.
Second, the Corporate GovernanceCommittee has sole responsibility fortaking voting decisions in identified
situations of conflict on behalf of clients
who have given AXA IM full discretion tovote. Voting decisions are taken prior to
any reference or discussions with clients
who have not delegated voting rights to
the Corporate Governance Committee
or have their own policy. This seeks
to ensure that decisions are free fromoutside influence.
We aim to align our voting andengagement practices with best practicein the markets in which we operate.
Where potential conflicts of interest
have been identified, recommendations
to vote in support of management
resolutions contrary to our regularpolicy position will be escalated to the
Corporate Governance Committee.
Any decision by the Committee to votecontrary to the policy position in thesecases will be supported by a written
record.
A full copy of our conflicts of interest
policy is available on our website31.

31

AXA IM Conflict of Interest Policy
2020 Active Ownership and Stewardship Report 23

ESG Integration into Platforms

Putting ESG to work in portfolios

Active Fixed Income
Effective fixed income portfolio management seeks to maximise risk-adjusted returns.
Given the asymmetric risk profile of this asset class, AXA IM’s Active Fixed Income investment
teams believe limiting downside risk is a key driver of long-term performance – and that ESG
plays an important part in that.

Chris Iggo
Chief Investment Officer, AXA IM CoreAXA IM is a long-term, responsible investor with the aim to deliver sustainable returns for clients.
Over time, our investment processes have evolved to reflect the ever-greater focus on nonfinancial factors. We believe that by building a powerful understanding of the environmental,social and governance (ESG) risks to an investment we can better target those sustainable returns
while contributing to better outcomes for people and the planet.
We aim to achieve this goal via indepth research, data analysis and theconstruction of portfolios which lookto optimise both financial and nonfinancial factors. Our investment process
reflects our core belief that a focus onsustainability can ultimately deliver thebest economic and financial performanceover the long term.
As part of that process we have developed
a proprietary ESG scoring methodology
which combines third-party data with ourown analysis to help us identify bestin-class companies – and laggards too.
We have also worked to identify the ESG
priority themes of most pertinence toportfolios. Our goal is to protect clientsfrom ESG risks across all strategies andasset classes, and to uncover investment
opportunities within those themes. In more
focused strategies – such as green bonds
or clean economy equities – we aim to hit
tough ESG targets while delivering financial
returns.32
Meeting with company management
teams is another vital part of theinvestment process. It allows us to drill
down into sustainability issues and fully
understand how they integrate with acompany’s overall corporate strategy. For
management, meeting with investors alsostresses the importance of reporting key
metrics and gives an understanding of how
sustainability assessments drive investment
decisions. As owners of equity, or creditors
through corporate bonds, investment

managers have the responsibility to
influence corporate behaviour.
Asset owners and portfolio managers havea vital role to play in delivering better
environmental and social outcomes. Ourcareful and committed ESG analysis helps
guide portfolio construction throughout
our businesses – and is the defining
factor in those more focused strategies.
Through our allocations and engagement,
responsible investors such as AXA IM
can not only help shape the narrativearound sustainability, but also commit
capital to reward businesses that drivesocial opportunities and equality, takeon the challenge of climate change anddemonstrate new standards for businessmodel transparency.

Our credit analysts use ESG to identify material concerns that
could impair the credit quality and long-term sustainability of
the issuers in our markets. This process helps to identify thoserisks most relevant to credit investors, which we believe canhelp to reduce downside risk. Analysts and portfolio managers
incorporate a wide range of ESG factors into credit analyses,
focusing on those most relevant to a given credit.
ESG factors are also important for sovereign and quasi-sovereign
debt and are also completely integrated into our investment
process, with different quantitative indicators for sovereignissuers to corporate issuers.

The ESG data used in the investment process are based on ESG methodologies which rely in part on third-party data, and in some cases are internally developed.
They are subjective and may change over time. Despite several initiatives, the lack of harmonised definitions can make ESG criteria heterogeneous. As such, thedifferent investment strategies that use ESG criteria and ESG reporting are difficult to compare with each other. Strategies that incorporate ESG criteria and thosethat incorporate sustainable development criteria may use ESG data that appear similar but which should be distinguished because their calculation method
may be different.

24 2020 Active Ownership and Stewardship Report

All credit analysts have been trained in ESG engagement by
AXA IM RI specialists and continue to increase engagement efforts.
Discussions are also taking place with sovereign issuers on ESG
topics during regular meetings with Treasuries. In addition, our RI
leader dedicated to active fixed income participates in multiple
AXA IM RI committees and collaborates closely with the global RI
other RI specialists on a regular basis.

Our investment process applies several AXA IM sectorial exclusion
policies to our funds. One of these is our climate risk ban list,
which bars coal and oil sands exposure above certain thresholds.

Portfolio managers integrate the AXA IM RI sectorial policies,
AXA IM ESG Standards and AXA IM qualitative ESG scores into theirdecision making. Analysts and portfolio managers discuss thesescores as well as particular ESG issues they view as significant.

How we achieve thisIn Asian high yield, where existing products are not ESG integrated
by our internal standards, we adhere to the AXA IM RI sectorial
policies and discuss ESG risks identified by the analysts as being
significant to credit quality.

ESG analysis is embedded into our active fixed income research
process and credit analysts incorporate ESG analysis in theirinternal research reports. These reports highlight the relevant
ESG strengths and weaknesses as well as an issuer’s performanceon specific issues. Analysts also comment on actions thatmanagement is taking to mitigate ESG weaknesses and its targets
to improve ESG performance.
Within our credit process, analysts also include a qualitative ESG
template in their models, assigning a view with respect to company
management and momentum of ESG issues related to industry andpeers. In the template, credit analysts highlight ESG strengths aswell as concerns and mitigating actions, ESG KPIs, and commentson governance structure.
Within both credit and sovereign research, the key ESG topics,
risks, and KPIs highlighted are at the discretion of the analyst,
allowing them to select topics and risks most relevant to theissuer. Each credit and sovereign analyst has been trained byour dedicated RI leader on ESG issues relevant to their assigned
sector(s) or region, drawing from several third-party sources,
including the Sustainability Accounting Standards Board (SASB),
TCFD, MSCI, Sustainalytics and others including rating agencies
and sell-side research.

32

particularly targeted carbon dioxide emissions, energy use,
renewable energy consumption and the water exploitationindex. Portfolio managers have access to AXA IM’s proprietary
quantitative scores and a selection of ESG KPIs.

Analysts have access to multiple sources of ESG data scores(internal and third party), including MSCI and Sustainalytics.
Among the key ESG topics, risks and KPIs recently highlighted
were greenhouse gas emissions and details of any issuer plans
and targets to reduce those emissions, as well as water intensity,
labour relations and board diversity. For sovereigns we have

Looking forward
In active fixed income, a number of strategies adopted
AXA IM ESG standards and began incorporating ourquantitative ESG scores into their decision-making processduring 2020, while continuing to adhere to the AXA RI
sectorial policies. These include Global Strategic Bonds,
Euro Credit Plus, Euro Credit Total Return, Euro Credit Short
Duration, Global Short Duration, Asian Short Duration,
Emerging Markets Bonds, Short Duration Emerging Markets
and China Short Duration. We expect this trend to continue
over the coming 12 months.
We have also participated in an increasing number of green,social or sustainability bond deals in 2020 and expect tocontinue to do so over the next year.
In 2021, our investment teams intend to expand their focus
on water, carbon intensity and the proportion of women
on boards. These three factors were selected for several
reasons including the availability of data across a wide
range of debt issuers and the objectivity of those metrics.

2020 Active Ownership and Stewardship Report 25

ESG Integration into Platforms

Framlington Equities

Rosenberg Equities

We believe that fundamental non-financial factors, as seen in AXA IM’s ESG priorities,
put us in a far better position to deliver on our aim of providing sustainable equity returns
over the long term. There are four key reasons for this:We believe that ESG insights enhance our traditional financial analysis. Our researchshows that ESG data can help identify potential risks and opportunities beyond
technical valuations, allowing us to better understand the possibility of reputational
damage and identify how firms are adapting to meet new market challenges.

■ They can help reduce exposure to companies with serious ESG risks■ They improve our understanding of how long-term issues are integrated into a company’s strategy■ They allow us to refocus portfolios around companies that have implemented good practices
in terms of their governance and their environmental and social impacts■ They can help to improve companies’ performance through active dialogue around the managementof ESG issues, thereby limiting our ongoing exposure to reputational risks

How we achieve thisAt Framlington Equities we seek out a 360°
approach to company evaluation throughthree steps:■ Quantitative – The initial step relies on
incorporating the internally developed
ESG scores into our front-office tools,
internal research models and risk
reports. In addition, investment
professionals have access to voting/
AGM results, carbon emissions data,comparative tables by sector and detailsof alignment with the UN SDGs.
■ Qualitative – It is our intention to go
beyond pure quantitative scoring
and to gain a detailed and nuanced
understanding of how a company
is intending to deal with its ESG

challenges. This type of deep-divequalitative focus forms the second
pillar of our investment approach. It is
our goal to incorporate ESG risks andopportunities more systematicallyin our portfolio construction andmodelling as part of our risk/return/fairvalue assessment.
This type of analysis is undertaken when
we visit companies, meet them faceto-face to discuss and understand how
their ESG and sustainability policies andpractices are supporting their long-term
strategic goals. The responsibilities
of Framlington Equities’ dedicated
ESG analysts include considerationof ESG factors at corporates and the
pro-active monitoring of related risks
and opportunities ahead of portfolio

construction. In addition, we analyse
securities with no or low ESG ratings,
complementing AXA IM quantitative
scoring with an in-depth qualitative
analysis.
■ Engagement – We see ourselves as key
influencers towards better and more
responsible corporate behaviours
and disclosure. Our engagement withcorporate management is central togenuine active asset management. Thisdialogue on ESG integration expresses
our conviction as long-term responsible
investors, seeks to avoid negative issues
that can damage portfolio returns andalso aims to influence management tobuild resilience by taking the right steps
to enhance their sustainability profileand practices.

Case Study
Our Clean Economy strategy adopts an impact investing
approach and has been specifically designed to have a
direct and positive effect on the environment. The strategy
objective is to contribute to the reduction of global
greenhouse gas emissions by investing in best-in-classcompanies within the sectors that contribute most.
As such, the strategy typically invests in listed companies
whose activities we believe can improve resource
sustainability, support the energy transition (from fossilbased to zero-carbon energy production and storage) oraddress the issue of water and food scarcity. The strategy
focuses on several themes identified as main drivers ofclean economy growth over the coming years including
low carbon transport, smart energy, agriculture, water,
recycling and waste reduction. The definition and the

26 2020 Active Ownership and Stewardship Report

At Rosenberg Equities, ESG is not just an additional factor toconsider at the portfolio construction stage. Our research into thelink between ESG information and the fundamental drivers of longterm risk and return has been coded into our proprietary factor
models.
We believe that integrating ESG information complements ourfundamental insights and may change our opinion of the economic
worth of a stock. Accordingly, we believe that the thoughtful use of
ESG insights can help investment outcomes, help reduce risks andpotentially improve long-term returns for our clients.

How we achieve thisWe add ESG scores and key performance indicator targets
alongside our traditional alpha and risk measures when we
optimise portfolios. This approach ensures that in our systematicconstruction of portfolios, when faced with two stocks of identicalalpha scores, our optimiser will favour the one with the highest ESG
rating, all other considerations being equal.
Beyond optimisation, our research into the links between ESG
and the fundamental drivers of long-term risk and return has led
to innovative enhancements of our stock selection models. For
example, the impact of company’s carbon footprint on its shareprice is included within our proprietary value factor model and thediversity of a company’s board contributes to our view of its future
earnings quality.

Our investment approach enables us tosystematically incorporate non-financial
information directly into our models alongside
traditional financial data. We take data from avariety of external vendors and we incorporate the
ESG scoring framework that is maintained centrally
and used across AXA IM’s investment teams.

Our latest research leverages our Natural Language
Processing capability to help identify companies
that are truly committed to ESG or
are aligned with the sustainable
development goals of the United
Nations.
Our approach allows us to build
portfolios with a better-thanbenchmark ESG score and lower
carbon/water intensity in a consistentand repeatable manner.

Once the data is in our system, we can work with
it in a variety of ways, including research, analysis
and reporting. However, using this information to
help construct portfolios, ensures that ESG data
directly contributes to investment outcomes.

Case study
number of themes may evolve going forward since weare still at an early stage of the clean economy adoption
growth.
When defining the investment universe for the strategy,
we apply a specific environment filter, excluding from theavailable universe companies that are in the bottom 10th
percentile on AXA IM’s proprietary ‘Environment’ score.
We also apply a proprietary thematic filter on companies’
exposure to the clean technology theme, to target the areas
defined above. Within this identified universe of circa 500
stocks, the managers look for multi-year sub-themes which
are already investable with proven commercial viability
while seeking to avoid chasing short-term niches.

Where we construct portfolios with
explicit climate targets, we apply
additional processes that balance theobjectives of decarbonisation todaywith investing in a future low-carbon
economy. Through working withclients who wish to address climatechange through their investments, wehave come across a common challenge- an ambitious target on current
portfolio carbon intensity reduction
may limit exposure to transitioning andbest-in-class companies within highstake industries. These companies
often contribute a high proportion of
the world’s carbon emissions.

Our climate-focused strategy
manages this complex trade-off byusing a combination of divestment
and investment allocation within our
optimisation framework. This allows
us to reduce portfolio carbon intensity
whilst actively investing in companies
that are committed to a path of
improvement or contributing to themitigation of climate change throughtheir ‘green’ revenues.
We believe that aligning portfolio
allocation with both reported
and forward-looking measures ofclimate awareness sends a strong

message to companies that adopting
emissions targets and accelerating
their transition to a low-carbon
economy is an important investment
consideration for us and our clients.
In 2021, we have plans to launcha strategy that builds on thisand further aims to neutralise
its emissions using carbon offset
contracts. Our clients are demanding
more action on climate, and we willcontinue to evolve our offering tomeet these needs.

2020 Active Ownership and Stewardship Report 27

ESG Integration into Platforms

US Active Investment Grade and High Yield

Real Assets (Real Estate Direct Equity)

Effective fixed income management seeks to maximise risk-adjusted returns. Given theasymmetric risk profile of these assets, we believe limiting downside risk is a key driver of longterm performance in AXA IM’s active US investment grade (IG) and US/European high yield (HY)investments. ESG plays an important part in this.

Responsible investment sits at the core of AXA IM Real
Assets’ approach to business. We actively consider bothfinancial and non-financial criteria during the originationof opportunities, through our investment assessment anddecision-making process at acquisition and through theactive ownership of our investments.

Our credit analysts use ESG to identify
material concerns that could impair thecredit quality and long-term sustainabilityof issuers in our markets. This process
helps to identify those risks most relevant
to credit investors, which can potentiallyhelp to minimise downside risk. Analysts
and portfolio managers incorporate a wide
range of ESG factors into credit analysis
but focus on those most relevant to a given
credit.
Our investment process applies several
AXA IM sectorial exclusion policies to ourstrategies. One of these is our climate risk
ban list – i.e. bans on coal and oil sands
exposure above certain thresholds.

How we aim to achieve thisAs part of our US active IG credit research
process, analysts incorporate ESG analysis
into their internal research reports.
These reports highlight the relevant
ESG strengths/weaknesses as well as an
issuer’s performance on specific issues.
Analysts also comment on mitigating
actions that management teams aretaking with respect to ESG weaknesses
and detail any issuer-announced,
forward-looking targets to improve ESG
performance.
Within our HY credit process, analysts also
include a qualitative ESG template in theirmodels, assigning a score with respect
to company management and on the
momentum seen around ESG issues. In thetemplate, credit analysts briefly highlight
ESG strengths as well as concerns andmitigating actions, ESG key performanceindicators (KPIs) and comments on
governance structure. Our HY ESG analysis
process continues to evolve as the market
changes.
Within both IG and HY research, key ESG
topics, risks, and KPIs highlighted inresearch are at the discretion of the analyst,
allowing them to select the topics and risks

most relevant to the credit in question.
Each IG and HY credit analyst is trainedby our dedicated ESG Specialist/Credit
Analyst on ESG issues relevant to theirassigned sectors, drawing from several
third-party sources, including SASB, TCFD,
MSCI, Sustainalytics, as well as credit rating
agencies and sell-side research.
Analysts have access to multiple sourcesof ESG data (internal and third party),
including MSCI and Sustainalytics.
Among the key ESG topics, risks and KPIs
recently highlighted were greenhouse gas
emissions and details of any issuer plans
and targets to reduce those emissions,alongside other themes including water
intensity, labour relations and board
diversity. Portfolio managers have accessto AXA IM proprietary quantitative scores
and a selection of ESG KPIs.
All IG and HY analysts have been trained in
ESG engagement by AXA IM’s RI specialists
and continue to increase engagement
efforts. In addition, an ESG Specialist/
Credit Analyst dedicated to US active
IG and US/European HY participatesin multiple AXA IM RI committees andcollaborates closely with the global
RI experts on a regular basis.

Case Study
In IG, a number of strategies adopted AXA IM ESG standards
and began incorporating our quantitative ESG scores into
their decision-making process during 2020, while continuing
to adhere to the AXA RI sectorial policies. These include US
Corporate Bonds, US Credit Short Duration IG and FIIS US
Corporate Intermediate. Analysts and portfolio managers
discuss the quantitative scores as well as any ad hoc ESG
issues that they view as significant. We have also participatedin several green or sustainability bond deals in 2020 and expect
to continue to do so over the next year.

On the HY side, the AXA IM RI sectorial policies are applied
and the ESG risks identified by analysts as significant to credit
quality are factored into portfolio decision making.
In 2021, both IG and HY teams intend to expand their focus
on water and carbon intensity. These factors were selected
for several reasons: First – data availability for a wide range ofdebt issuers (including some private companies); second – theobjectivity of these metrics and finally; the prevalence of energy(and fracking) in the US credit universe and the relevance of
these environmental KPIs with respect to that industry.

This integrated approach is fundamental to the good stewardshipof our investments. By making specific non-financial considerations
part of our investment processes, we ensure better visibility ofsustainability-related risks and potential adverse impacts on ourinvestments. This visibility provides us with a broader perspectiveon asset and sector-specific risks which informs our underwriting
and asset selection. Ultimately, it also helps to shape our view oninvestment risk, returns and liquidity, enabling our teams to better
identify and unlock opportunities to enhance value for our clients.

How we achieve thisFor direct real estate investments, our asset and fund management
teams receive guidance from a dedicated ESG group which supports
the business in developing and achieving platform-specific ESG
objectives such as energy performance and building certifications.
They also get support from the deployment of tools, both proprietaryand from external sources, on our data management platform.
When acquiring assets, five key factors are formally assessed as partof our investment decision-making process to provide an initial view
on asset-level sustainability risk. This assessment forms the basis of
key actions for the ongoing strategic asset plan for each investment.
■ Regulatory Risk – reviewing the estimated level of transitional or
regulatory risk associated with the asset, primarily through assetlevel Energy Performance Certificate (EPC) rating, or equivalent for
non-European assets■ Physical Risk – reviewing the estimated level of physical risk
associated with natural catastrophe and climate change, in
conjunction with the AXA Group Natural Catastrophe modellingteam■ Independent certification – reviewing the appropriate level
and type of independent certification for a relevant market,
and providing a view on the relative level of asset quality andunderlying management■ Counterparty Risk – reviewing appropriate counterparty
governance risk, including checks against our anti-money
laundering and know-your-client reviews in addition to AXA IM
exclusion policies■ ESG score – reviewing the estimated performance of the asset
relative to the AXA IM Real Assets portfolio at a sector and country
level, assessed using AXA IM’s proprietary ESG scoring tool
Real Assets ESG highlights, Dec 2019. AXA IM.
Deepki35
Carbon Risk Real Estate Monitor.

As part of our active ownership, three primary tools assist us inmanaging asset level performance, contributing to the threepillars of the Real Assets sustainability strategy: Decarbonisation,
Resilience and Building Tomorrow33. First, we use the Deepki34
platform, which stores, visualises and reports on asset and fundlevel environmental data; second, we increasingly use the Carbon
Risk Real Estate Monitor (CRREM35) tool to assess our relative levelof alignment with a 1.5°C or 2°C decarbonisation trajectory for each
asset. And lastly, through our property managers, we increasingly
use an annual tenant satisfaction survey to engage with tenants
and to assess performance of our property managers.
These tools provide us with visibility of performance and progressagainst targets and are used regularly by the asset management
team and their property managers to actively measure, manage
and report on their underlying asset performance. They also build
a clearer picture of tenant concerns and throw up opportunities forfurther engagement.
Data from Deepki is provided to our asset and fund management
teams on a regular basis, providing updated performance metrics
against specific strategy-level targets such as certification levels,
CO2 emissions, water consumption or waste production in addition
to examples of specific initiatives undertaken at asset level.

Case Study
In one Pan-European strategy, integration of ESG has
resulted in increased coverage of data, leading to better
understanding of potential adverse environmental
impacts of the strategy. Through engagement with local
property managers, we have increased the coverage ofenvironmental data ranging from energy, water, and waste
performance metrics to plot against decarbonisation
pathways established by the Paris Agreement objectives
in the CRREM model. Successful engagement with teamson the ground has provided asset managers with sufficientvisibility on environmental performance to determine
short, medium and long-term action plans to begin to alignasset performance with Paris Agreement targets.
More specifically, in Nordic residential assets held in thestrategy, we have deployed an innovative technologicalsolution to optimise heat consumption, leading to reduced
operational expenditure and increased net revenues. This
asset-level example demonstrates how our asset managers
are actively finding opportunities to create and enhancevalue from a financial and environmental perspective while
reducing cost and increasing comfort levels for residents inthese assets.

33
34

28 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 29

Governance, resources, incentives and monitoring

Responsible Investment organisation at AXA IM

Resourcing and Remuneration at AXA IM

Across AXA IM we have close to 40 dedicated experts embedded within our investment and research teams who
are responsible for responsible investment (RI) activities. These experts sit across both our Core and Alternatives
businesses, covering all related aspects including research, due diligence, data/scoring, analytics, stock and credit
analysis as well as active ownership and engagement.

The AXA IM Remuneration Policy sets out the principles relating toremuneration, which take into account AXA IM’s business strategy,
objectives, risk tolerance, and the long-term interests of AXA IM’sclients, shareholders and employees. It also seeks to ensure
sound and effective risk management and behaviour which isconsistent with the risk profile, strategy, objectives and values ofthe managed portfolios.

The organisation of RI functions within the business is in line with our principle that responsible investment must be fully embedded
within our investment functions, to ensure that ESG is not an ‘add on’, but simply part of everything we do.
For more details on our RI governance and capabilities, refer to our RI policy36. For a more detailed look at our RI structure, please see
page 51 in the Appendices.

Responsible Investment GovernanceTo ensure consistency and co-ordination between RI experts, investment teams and support functions, the following ESG-specificcommittees meet on a quarterly or bi-annual basis:

Variable remuneration must account for appropriate qualitative
criteria, such as sound and effective risk management (including
regulatory compliance) and client service that delivers fair, highquality outcomes.

AXA IM Management Board

AXA IM RI Strategic Committee

Scores, Methodologies and
RI Processes Committee

ESG Monitoring & Engagement Committee

Corporate Governance Committee

Committee descriptions
Committee
AXA IM RI Strategic
Committee

Objectives

Frequency

The main body responsible for defining AXA IM's responsible investment strategy and monitoring
its implementation. This includes defining sectoral policies and the framework for RI products, aswell as leading efforts on selected themes, such as climate change. The RI Strategic Committee
reports to the AXA IM Management Board which regularly validates and reviews the RI strategy. The
Committee includes three Management Board members.

Quarterly

The Committee guides and supervises the application of the corporate governance and voting policy.
Its members include AXA IM Core fund managers and senior executives who have a well-establishedcorporate governance profile in their respective markets. The RI co-ordination and governancespecialists, under the direction of the Corporate Governance Committee, actively monitor resolutions
submitted for shareholder approval at general meetings and vote on behalf of clients.

The Committee focuses on discussions around key ESG themes and controversies, discussing
possible implications at an AXA IM level and coordinating engagement actions.
The Committee is also responsible for the direction and nature of AXA IM’s RI investment/
restriction policies, including their implementation.

36
37

This committee ensures the coordination of ESG integration in a more operational manner, with a
specific focus on ESG scoring methodologies, quantitative tools and reporting.
In 2020, the Committee looked at proposed evolutions in our corporate ESG scoring methodologies
with a focus on sustainability bonds, as well as proposed evolutions in our Sovereign ESG scoring
methodologies.

AXA IM Responsible Investment Policy.
Net Zero Asset Managers Initiative.

30 2020 Active Ownership and Stewardship Report

Third-party service providers and due diligence
We use the research of ESG specialists like MSCI, Sustainalytics, Vigeo and Institutional Shareholder Services (ISS) to complement the
information provided by AXA IM proprietary ESG scores. A thorough due diligence process is in place for the selection of these providers,involving quantitative experts as well as investment and risk teams, and we regularly meet with the providers over the durationof our partnership, to review, propose or challenge methodological evolutions. We are particularly attentive to the limitations inmethodologies, linked to the unavailability of comparable, exhaustive data reported by issuers.38

ESG Data
ProviderBi-annual

Quarterly + ad-hoc
as required

In 2020, it discussed evolutions in our coal exclusion and engagement strategies, as well as thethematic focus for engagement activities.
AXA IM Scores,
Methodologies
and RI Processes
Committee

In the 2021 version of the Remuneration Policy, the importanceof equality has been re-emphasised. AXA IM must makeremuneration decisions that are consistent and free fromdiscrimination or irrelevant personal factors such as age,nationality, ethnic origin, gender, sexual orientation, gender
identity or expression, religion, marital status or disability.

AXA IM third-party providers

As an example, in 2020 the Committee reviewed proposed updates to the voting policy and met on
an ad hoc basis to discuss several high-level proxy fights.
AXA IM ESG
Monitoring &Engagement
Committee

In 2021, the sustainability risk (an environmental, social or
governance event or condition that, if it occurs, could cause an
actual or a potential material negative impact on the value of aninvestment) has been integrated into the Remuneration Policy. As
of January 2021, individual objectives for investment teams include
elements related to the sustainability risk framework and updated
investment processes include the monitoring of these risks.

Investment professionals also have access to external qualitative research through brokers, for instance.

For example, in 2020, the committee looked at our approach to implementing new regulations
including the EU’s Sustainable Finance Disclosure regulation and it took the decision to join the
Net Zero Asset Managers Initiative37.
AXA IM Corporate
GovernanceCommittee

AXA IM’s Risk Management Department validates and assesses
risk-adjustment techniques (which are used in assessing
performance, determining AXA IM target variable pay and ex postrisk adjustment) taking into consideration all relevant types ofcurrent and future risks – including financial and non-financial(e.g. reputation, conduct and client outcomes).

Risk and compliance factors, including adherence to risk andcompliance policies, are taken into account to determ
determine the target variable pay for employees in investment
platforms, including investment professionals and portfolio
managers.

Quarterly +ad-hoc as required

Sustainalytics

ExpertiseControversies Analysis

ESG Scores andCompany Research

ESG Raw
Data & KPIs✓✓

Vigeo-EIRISStrong expertise in social issues
and European small & mid cap✓

GMI – MSCI

Strong expertise in Governance issues✓

Trucost S&P

Full range of Quantitative Environmental KPIs

Carbon 4

Offers a climate risk package
Offers expertise across a full range of environmental,social and governance (ESG) issues✓

ISS – Oekom

Expertise in Impact analysis✓

11/201209/2007
07/2004✓

04/2004✓

03/2012

Only used for Green Bonds reporting

ISS – Ethix

Start Date

01/2017
01/2003
02/201106/2018

Carbon Delta

Expertise in Climate analysis✓✓

11/2018

Beyond Ratings

Expertise in Climate analysis✓✓

08/2018

Bloomberg ESG

ESG KPIs. Used for investment and reporting purposes✓

12/2018✓

03/2019
01/2021

EthifinanceStrong expertise in European micro and small caps
Iceberg Data Lab Biodiversity-related data
38✓

The ESG data used in the investment process are based on ESG methodologies which rely in part on third party data, and in some cases are internally developed.
They are subjective and may change over time. Despite several initiatives, the lack of harmonised definitions can make ESG criteria heterogeneous. As such, thedifferent investment strategies that use ESG criteria and ESG reporting are difficult to compare with each other. Strategies that incorporate ESG criteria and thosethat incorporate sustainable development criteria may use ESG data that appear similar but which should be distinguished because their calculation method
may be different
2020 Active Ownership and Stewardship Report 31

Client and beneficiary needs

Supporting Client Needs

Fund level

We believe it is vital to communicate with clients in the mosttransparent and comprehensive way possible in order to givethem a complete analysis of responsible investment and help
them understand it. All the main financial and non-financial
information on every fund that has integrated ESG criteria into
its investment process is available on our Fund Centre. This
is in accordance with the regulations governing undertakingsfor collective investment (UCIs) and Article 173 of the Energy
Transition for Green Growth Act.

To help our clients measure the integration of ESG criteria into
funds and to communicate in a clear and transparent manner,
AXA IM has taken the initiative to display three ESG indicators in
Business-to-Business and Business-to-Consumer reports for all
our funds. The ESG score (absolute and relative) and the Carbon
Footprint (CO2 relative intensity) are integrated into our reports
and have been since January 2019.

AUM Eur 829.5bn by Asset Class*
6%

15%

1%
12%

5%

60%

9%
64%
RetailEquityFixedIncomeMulti Asset
Alternative
Real Estate

Alternative
Structured Finance
Other

EuropeAsia

USA

Emerging

Other* Source AXA IM as at 30 Sept 2020

■ Annual and mid-year Active Ownership and Stewardship Report■ Annual TCFD and Article 173 report■ Annual Principles for Responsible Investment (PRI)
report■ Policies
Going into more detail about our stewardship reports, we arecommitted to provide transparency and regular reporting on
active ownership, both internally and externally.
AXA IM’s RI activities are published and available publicly. Our fullvoting records are accessible publicly and detail how we voted

32 2020 Active Ownership and Stewardship Report

On top of this standard reporting, an RI newsletter is sent
quarterly to clients. The objective of this newsletter is to informclients about responsible investment topics. The RI newsletter
is a summary of the latest developments in responsible
investment/ESG in the market and more specifically within
AXA IM.
In addition, we communicate with our clients on an ad-hoc basis
about the evolution of our responsible investment policies andpractices.
At AXA IM, we regularly use our social media channels andwebsite to communicate with our clients. The thematic and
ESG research papers written by our RI analysts and our AXA IM
RI policies are published on our global website and relayed on
our social networks. Recent research highlights have included
papers on biodiversity40 and climate change41.

Company level
The following content is available on our website:■ Legal documentation (prospectus, KIID, annual reports, semi
annual reports)■ Monthly comments from the portfolio manager

18%

12%

Institutional■ Voting Report (for equity and multi asset funds only) – with
the AGMs voted and rationales for any vote against the
management■ Engagement Report

AUM Geographical Distribution*

5% 8%

85%

■ Transparency code

■ ESG Report

AXA IM At a Glance – A breakdown of the assets under management across asset classes and geography:
AUM Client type*

We have mentioned broader fund content above. For openended funds classed as sustainable and impact in the AXA IM
range39, the following content is made available to clients on ourFund Centre:

at general meetings of companies held on our clients’ behalf. In
addition, we publish annual and mid-year Active Ownership and
Stewardship Reports which include information on RI issues,
engagement with companies, and aggregated voting records forthe relevant period.
We also provide bespoke and customised reports aligned withspecific client requests – the decision whether to make the reportpublic or private is made by the clients. This includes a statistical
overview and analysis of engagements conducted including
breakdowns by theme and by the UN SDGs. There is also
information on progress made through engagement and detailsof where we consider success has been achieved. We also provide
a list of all issuers engaged with and on which specific themes.

Those open-ended funds are categorised as products which promote ESG characteristics (“Article 8”) or which have sustainable investment as theirobjective (“Article 9”) according to the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR”). Detailsof our RI categories are available on the AXA IM website.
40
Why agriculture threatens biodiversity, and how responsible investors can respond. AXA IM. Sept 2020.
41
Climate Alignment Principles: How to invest in line with a +1.5˚C goal. AXA IM. Dec 2020.
39

2020 Active Ownership and Stewardship Report 33

Promoting well-functioning markets

Review and assurance

Public Policy

Accountability

At AXA IM we adhere to the principles, standards and codes which govern
the policies and practices in the markets where we are active.
We work with regulatory authorities andpolicymakers to ensure that public policy
supports an investment environment
which takes seriously sustainability andresponsible investment issues. In addition,
AXA IM is an active member of several
industry initiatives – at global and local
level – which pursue the same objective.
Involvement with policymakers andindustry groups is a key part of our active
ownership and stewardship strategy.
As interest in ESG grows among clientsand regulators in many geographies,

the need for common, clear and usable
standards is a top priority for the financial
industry. This forms an important area
for our public policy engagement. We
actively participate in industry bodies,and interact with regulators to share ourviews on sustainability-related regulatorychanges – in 2020 this led us to focus
notably on the revision of the Non-Financial
Reporting Directive, and on the definition
and implementation of the Sustainable
Finance Disclosure Regulation. For thoseregulations, we worked closely withindustry associations in France and at

European Union level, with industry groups
such as Sustainability Accounting Standards
Board (SASB) and submitted our own
responses to the related consultations.
We adopt a selective approach when
deciding which initiatives we will
participate in or support, focusing on
topics and groups where we believe
our involvement will have a material
impact. Impact can often be greater by
joining forces with other investors andstakeholders, so we use a combination ofcollective and individual engagement.
In 2020, we contributed to and supported
a number of initiatives. A list of these canbe found on page 38.

Systemic risk, extra-financial risk and climate risk
AXA IM’s approach to sustainability risks isderived from the deep integration of ESG
criteria in our research and investment
processes. AXA IM has implemented aframework to integrate sustainability risks
in investment decisions based on:■ Sectorial and normative exclusions – inorder to manage ESG and sustainability
tail-risks, we have implemented a seriesof exclusion-based policies across ourassets. All our policies are available on
our website42■ Proprietary scoring methodologies

42
43

Our climate strategy, organised aroundfour pillars, is aligned with the framework
proposed by the TCFD:■ Screening and risk management■ Reporting and integration in portfolio
management■ Active ownership (proxy voting andengagement)
We are deeply committed to tackling theimpact of climate-related risks and asa large investor we have a role to play in

AXA IM’s Management Board isaccountable for the responsible
investment (RI) strategy across theorganisation, including focusing on the
integration of relevant RI considerations
into our investment and stewardshipprocesses, and it regularly reviews thestrategy and stewardship undertaken
across the business. This implementation
strategy is endorsed by the Executive
Committee.
AXA IM has also established threemajor ESG committees: The RI Strategic
Committee, the Corporate GovernanceCommittee and the ESG Monitoring andEngagement Committee which all playa key role in reviewing and approving
the annual and mid-year Active
Ownership Reports. The committees
also play a crucial part in reviewing
and approving relevant policies
and processes related to RI andstewardship.

Corporate Governance & Voting Policy,
the AXA IM Conflicts of Interest Policy
and other relevant policies. These arealso monitored and reviewed by internal
compliance teams and subject to periodic
internal audit.
In addition to this, AXA IM manages a rangeof strategies for which the level of ESG
integration is significantly deeper, withspecific sustainable objectives that are
regularly monitored. These open-ended
vehicles are categorised as products
which have sustainable investment as
their objective (“Article 9”) according

to the Regulation (EU) 2019/2088 on
sustainability-related disclosures in
the financial services sector (“SFDR”).
Details of our RI categories are available
on the AXA IM website.
An annual audit is performed byexternal auditors on the vast majorityof these funds to ensure adherencewith those objectives, and to ensurethat engagement and stewardship
responsibilities are fully met.

Internal controls ensurealignment with the AXA IM
Responsible Investment
Policy, the AXA IM
limiting global warming. We believe it isour duty to provide the relevant expertiseto help our clients better understandclimate change and how it may impact
their portfolios, and to support themin adapting their investment decisions
accordingly. As part of mandatory disclosure
requirements, we publish a combined
Article 173 – TCFD report43. Here we reporton our ESG methodologies and tools, on
the contribution of our investments toemissions and on how we measure climate
risks and opportunities through quantitative
indicators such as warming potential, as
well as the ESG score by asset class.

Exclusion Policies. AXA IM Global
Article 173 – TCFD combined report. AXA IM

34 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 35

Complete list of 2020 engagements and themes

Issuers engaged in 2020
We view engagement as a fundamental part of our role as active
investors. As such, our engagements focus on those ESG issues
which we consider to be the most strategically and financiallymaterial for the long term. Our goal is to work closely withexecutives to ensure that threats are addressed before theydamage investor value.

The list below details the issuers with which we engaged in 2020.
We are fully transparent about our voting activities. The full 2020
voting record can be found here.

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITAL✓✓✓SOCIAL
PUBLICRELATIONS HEALTH✓✓CORPORATEBUSINESSGOVERNANCE ETHICS✓ISSUER

COUNTRY

Australia Government Bond

Australia

Australia & New Zealand Banking Group
Ltd

Australia✓

Commonwealth Bank of Australia

Australia✓

CSL Ltd

Australia

IDP Education Ltd

Australia

Macquarie Group Ltd

Australia

National Australia Bank Ltd

Australia✓

Westpac Banking Corp

Australia✓

ANDRITZ AG

Austria

Republic of Austria

Austria

Befimmo SA

Belgium

Kingdom of Belgium

Belgium

Groupe Bruxelles Lambert SA

Belgium✓

Ontex Group NV

Belgium✓

Federative Republic of Brazil

Brazil✓✓Petroleo Brasileiro SA

Brazil✓✓Bulgaria Government Bond

Bulgaria

✓

✓

✓

✓

✓

✓

Canada Government International Bond

Canada

✓

✓

✓

✓

✓

✓

Toronto-Dominion Bank/The

Canada✓Banco del Estado de Chile

Chile

✓

✓

✓

Republic of Chile

Chile

✓

✓

✓

✓

Agricultural Development Bank of China

China

✓

Alibaba Group Holding Ltd

China

Baidu IncChina

CGN Power Co Ltd

China

✓

People's Republic of China

China

✓

✓

CPMC Holdings Ltd

China

✓

✓

Ctrip.com International Ltd

China

ICBC Financial Leasing Co Ltd

China

JD.com Inc

China

Ping An Insurance Group Co of China Ltd

China

✓

TAL Education Group

China

✓

Tencent Holdings Ltd

China

✓

Yum China Holdings Inc

China

✓

36 2020 Active Ownership and Stewardship Report

✓
✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓
✓

✓
✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓

✓
✓

✓

✓

✓

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITAL✓✓✓ISSUER

COUNTRY

Republic of Colombia

Columbia

Ecopetrol SA

Columbia✓

Danske Bank A/S

Denmark✓

AP Moller - Maersk A/S

Denmark✓

Novo Nordisk A/S

Denmark

SOCIAL
PUBLICRELATIONS HEALTH✓✓✓CORPORATEBUSINESSGOVERNANCE ETHICS
✓
✓

✓

✓

✓

✓

✓
✓

Orsted A/S

Denmark✓

Arab Republic of Egypt

Egypt

✓

✓

Republic of Finland

Finland✓✓

Fortum Oyj

Finland✓✓

Nordic Investment Bank

Finland✓

Valmet Oyj

Finland✓✓

Albioma SA

France✓✓Credit Agricole SA

FranceAir France-KLM

France✓✓Air Liquide SA

France✓✓Arkema SA

France✓✓Atos SEFrance✓Banque Federative du Credit Mutuel SA

France✓✓Danone SA

France✓✓BNP Paribas SA

FranceBPCE SAFrance✓Caisse des Depots et Consignations

France✓CarrefourFrance✓Council Of Europe Development BankFrance✓CovivioFranceVinci SAFranceDassault Systemes SE

FranceEdenredFranceElectricite de France SA

FranceElior Group SA

FranceEngie SAFrance✓Europcar Mobility GroupFrance✓La Francaise des Jeux SAEM

FranceFrench Republic

France✓✓✓Gaztransport Et Technigaz SA

France

✓

✓

✓

ICADE

France✓✓Region of Ile de France

France✓Iliad SAFranceIngenico Group SA

FranceKering SA

FranceNatixis SA

France✓✓Korian SA

France

✓

✓

✓

✓

✓

✓
✓
✓

✓

✓
✓
✓

✓

✓
✓
✓

✓

✓

✓

✓
✓
✓
✓

✓

✓

✓

✓

✓
✓

✓
✓

✓
✓
✓

✓

✓
✓
✓

✓
✓

✓

✓
✓
✓

✓
✓
✓

✓

✓

✓

2020 Active Ownership and Stewardship Report 37

Complete list of 2020 engagements and themes

Issuers engaged in 2020 (continued)
CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITALISSUER

COUNTRY

Klepierre SA

France✓Legrand SA

FranceMaisons du Monde SA
Mercialys SA

SOCIAL
PUBLICRELATIONS HEALTHCORPORATEBUSINESSGOVERNANCE ETHICS

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITALISSUER

COUNTRY✓

Covestro AG

Germany✓✓✓

Daimler AG

Germany✓✓

France✓✓Deutsche Bank AG

Germany✓✓

France✓✓Deutsche Hypothekenbank AG

Germany✓

EnBW Energie Baden-Wuerttemberg AG

Germany✓

Federal Republic of Germany

Germany✓

Henkel AG & Co KGaA

Germany✓

LEG Immobilien AG
LANXESS AG
Merck KGaA

Germany

Cie Generale des Etablissements Michelin
SCA

France✓✓Lagardere SCA

France✓✓Metropole Television SA

France✓✓Neoen SAFranceNexans SA

FranceNexity SA

FranceOrange SA

France

Orpea

✓

✓

✓

✓

✓

SOCIAL
PUBLICRELATIONS HEALTHCORPORATEBUSINESSGOVERNANCE ETHICS
✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

Germany✓✓

Germany

✓

✓

✓

✓

✓

✓

✓

✓

✓

Muenchener Rueckversicherungs
Gesellschaft AG in Muenchen

Germany

France✓✓Nemetschek SE

Germany✓

L'Oreal SA

France✓✓NRW Bank

Germany✓✓

Peugeot SA

FranceRWE AG

Germany

✓

✓

✓

✓

Regie Autonome des Transports Parisiens

FranceSAP SE

Germany✓✓✓

Teleperformance

France✓Siemens AG

Germany

TF1

France✓TAG Immobilien AG

Germany

Renault SA

France✓Volkswagen AG

Germany

SNCF Reseau

France✓Republic of Guatemala

GuatemalaPernod Ricard SA

France✓✓✓✓AIA Group Ltd

Hong Kong

SanofiFrance✓✓✓✓Hungary

Hungary

Suez SAFrance✓Apollo Hospitals Enterprise Ltd

India

Societe Generale SA

France✓Aurobindo Pharma Ltd

India

Societe Du Grand Paris EPICFrance✓Bandhan Bank Ltd

India

Sopra Steria GroupFranceCipla Ltd/India

India

Schneider Electric SE

FranceDr Lal PathLabs Ltd

India

✓

Sodexo SA

FranceFuture Retail Ltd

India

✓

Tarkett SA

France✓✓Godrej Consumer Products Ltd

India

✓

TOTAL SAFrance✓✓HDFC Bank Ltd

India

✓

Ubisoft Entertainment SA

France✓✓Unibail - Rodamco - Westfield

France✓Veolia Environnement SA

FranceVivendi SA

FranceWorldline SA/France

Franceadidas AG

Germany✓

Vonovia SE

Germany✓

alstria office REIT-AG

Germany✓✓

BASF SE

Germany✓✓

Bayer AG

Germany

Bayerische Motoren Werke AG

Germany

HUGO BOSS AG
Continental AG

✓
✓

✓

✓

✓

✓

✓

✓
✓

✓

✓
✓

✓

✓

✓

✓

✓
✓

✓
✓

✓

✓

✓

✓
✓

✓

✓

✓
✓
✓

✓

✓

✓
✓

✓

✓

✓
✓
✓
✓
✓

Housing Development Finance Corp Ltd

India

✓

Novelis Inc/Old

India

✓

ICICI Bank Ltd

India

✓

✓

Infosys Ltd

India

✓

✓

Marico Ltd

India

✓

✓

Reliance Industries Ltd

India

✓

✓

State Bank of India

India

Tata Consultancy Services Ltd

India

Zee Entertainment Enterprises Ltd

India

Bank Rakyat Indonesia Persero Tbk PT

Indonesia✓

Endo International PLC

IrelandGermany✓

Kingspan Group PLC

Ireland✓Germany✓

Kerry Group PLC

Ireland✓38 2020 Active Ownership and Stewardship Report

✓
✓

✓
✓

✓

✓

✓

✓

✓

✓
✓
✓
✓

✓
✓

2020 Active Ownership and Stewardship Report 39Complete list of 2020 engagements and themes

Issuers engaged in 2020 (continued)
CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITALISSUER

COUNTRY

Radware Ltd

IsraelAssicurazioni Generali SpA

Italy

Buzzi Unicem SpA

Italy

DiaSorin SpA

Italy

Enel SpA

Italy✓

Eni SpA

Italy✓

Ferrovie dello Stato Italiane SpA

Italy

✓

FinecoBank Banca Fineco SpA

Italy

✓

Infrastrutture Wireless Italiane SpA

Italy

SOCIAL
PUBLICRELATIONS HEALTH

Netherlands✓

Stedin Holding NV

Netherlands✓✓

TenneT Holding BV

Netherlands✓✓

New Zealand Government Bond

New Zealand

✓

✓

✓

Equinor ASA

Norway

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓
✓

Intesa Sanpaolo SpA

Italy

✓

✓

✓

Italy

✓

✓

✓

Prysmian SpA

Italy

✓

Snam SpA

Italy✓

Calbee IncJapan

Daiichi Sankyo Co Ltd

Japan

Eisai Co Ltd

Japan

✓

FANUC Corp

Japan

✓

Fujitsu Ltd

Japan

Japan

Japan

Kao Corp

Japan

Kirin Holdings Co LtdJapan

Mitsubishi Corp

Japan

Mizuho Financial Group Inc

Japan

Nomura Holdings Inc

Japan

✓

NTT DOCOMO Inc

Japan

✓

Shiseido Co Ltd

Japan

✓

SoftBank Group CorpJapan

Sumitomo Mitsui Financial Group Inc

Japan

Takeda Pharmaceutical Co Ltd

Japan

Toyota Motor CorpJapan

Astellas Pharma Inc

Japan

Yushin Precision Equipment Co Ltd

Japan

Republic of Kazakhstan

Kazakhstan

✓

✓

✓

✓

✓

Kuwait International Government Bond

Kuwait

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

United Mexican States

Mexico✓Kingdom of Morocco

Morocco✓✓Euronext NV

Netherlands

Louis Dreyfus Co BVNetherlands✓✓

Kingdom of the Netherlands

Netherlands✓✓

Koninklijke Philips NV

Netherlands✓✓

Republic of Poland Government Bond

Poland

✓

✓

✓

✓

✓

✓

State of Qatar

Qatar

✓

✓

✓

✓

✓

✓

✓

Republic of Korea

Republic of Korea

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Republic of Korea✓

Romania

Romania✓✓✓

Gazprom PJSC

Russia✓✓Rosneft Oil Co PJSC

Russia✓✓✓Saudi Arabia✓

Kingdom of Saudi Arabia

Saudi Arabia

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Amadeus IT Group SA

Spain

Iberdrola SA

Spain

✓

✓

Autonomous Community of Madrid Spain

Spain

✓

✓

Repsol SA

Spain

✓

✓

Banco Santander SA

Spain

Siemens Gamesa Renewable Energy SA

Spain

Kingdom of Spain

Spain

Telefonica SA

Spain

✓

Avanza Bank Holding AB

Sweden✓✓Kommuninvest I Sverige AB

Sweden✓Sweden Government Bond

Sweden

✓
✓

✓
✓

✓

✓

✓

✓
✓
✓

✓

Kingdom of Sweden

SwedenSwedbank AB

SwedenTele2 AB

SwedenVattenfall AB

Sweden

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓
✓

✓

✓

✓
✓

✓

✓

✓
✓

Volvo AB

Sweden✓Belimo Holding AG

Switzerland

✓

✓

✓

BKW AG

Switzerland

✓

✓

✓

Glencore PLC

Switzerland✓✓✓

Saudi Arabian Oil Co✓✓

Slovakia

✓

✓

✓
✓

✓

Slovenia✓✓

RussiaRussia✓Slovak Republic✓✓

United Co RUSAL PLC
Russian Federation✓

Republic of Slovenia

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

Philippines✓✓

Lithuania

Republic of the Philippines✓✓

Luxembourg

✓
✓

✓

✓

Republic of Lithuania

Peru
Philippines✓✓

European Investment Bank

Republic of Peru

Korea Electric Power Corp

✓

✓

✓

✓

✓

✓

Portugal✓✓✓

Asian Development Bank

✓

✓

✓

Portugal✓✓✓

EDP - Energias de Portugal SA
✓

✓
✓

✓

Portuguese Republic

✓

✓

✓

CORPORATEBUSINESSGOVERNANCE ETHICS✓Royal Dutch Shell PLC✓✓

SOCIAL
PUBLICRELATIONS HEALTH

COUNTRY✓✓

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITAL✓✓ISSUER

Republic of Italy

40 2020 Active Ownership and Stewardship Report

CORPORATEBUSINESSGOVERNANCE ETHICS✓✓✓

2020 Active Ownership and Stewardship Report 41

Complete list of 2020 engagements and themes

Issuers engaged in 2020 (continued)
ISSUER

COUNTRY

LafargeHolcim Ltd

Switzerland

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITAL✓CORPORATEBUSINESSGOVERNANCE ETHICS✓

COUNTRY

Bristol-Myers Squibb Co

United States

Cheesecake Factory Inc/The

United States

Cargill Inc

United States

Clorox Co/The

United States✓

United States✓

SOCIAL
PUBLICRELATIONS HEALTH✓

Switzerland
Switzerland✓

Roche Holding AG

Switzerland✓

Swiss Confederation

Switzerland

✓

✓

✓

✓

✓

✓

CVS Health Corp

Emirate of Abu Dhabi United Arab Emirates United ArabEmirates

✓

✓

✓

✓

✓

✓

Dow Inc

United States

AstraZeneca PLC

United Kingdom✓

eBay Inc

United States

Barclays PLC

United Kingdom✓

Edison International

United States✓✓

BAE Systems PLC

United Kingdom

Enable Midstream Partners LP

United States✓✓

Tritax Big Box REIT PLC

United Kingdom✓

Facebook Inc

United States

BP PLC

United Kingdom✓✓

Gilead Sciences Inc

United States

Burberry Group PLC

United Kingdom✓✓

General Mills Inc

United States

Central Asia Metals PLC

United Kingdom

General Motors Co

United States✓

Cadent Finance PLC

United Kingdom✓✓

Alphabet Inc

United States✓

European Bank for Reconstruction &Development

United Kingdom✓✓

easyJet PLC

United Kingdom✓

GlaxoSmithKline PLC

United Kingdom

Linde PLC

United Kingdom

Lloyds Banking Group PLC

United Kingdom

National Grid PLC

United Kingdom

Ocado Group PLC

United Kingdom

Persimmon PLC

United Kingdom

Rio Tinto Ltd

United Kingdom✓

Rolls-Royce Holdings PLC

United Kingdom✓

Segro PLC

United Kingdom✓✓

St James's Place PLC

United Kingdom

Thames Water Utilities Ltd

United Kingdom✓✓

United Kingdom of Great Britain andNorthern Ireland

United Kingdom✓✓

Unilever NV

United Kingdom

Sabre Insurance Group PLC

United Kingdom

Airtel Africa PLC

United Kingdom

Anglo American PLC

United Kingdom

Apple Inc

United States

AbbVie Inc

United States✓

Abbott Laboratories

United States✓

Archer-Daniels-Midland Co

United States✓✓

Amazon.com Inc

United States

✓

✓

✓

✓

United States
United States

Booking Holdings Inc

United States

42 2020 Active Ownership and Stewardship Report

✓

✓

✓

✓
✓
✓
✓
✓

✓

✓

✓
✓

✓

✓

✓

✓
✓

✓
✓

✓

✓

✓

United States

JPMorgan Chase & Co

United States✓

Microsoft Corp

United States✓

Murphy USA Inc

United States

Mylan NV

United States

✓

✓

✓

✓
✓
✓

✓

✓
✓

✓

✓

✓
✓

✓

✓

✓
✓

✓

✓

✓

✓
✓
✓

✓

✓

✓

✓

✓
✓

✓

Netflix Inc

United States

✓

✓

✓

✓

ServiceNow Inc

United States

✓

✓

✓

Oracle Corp

United States✓✓

Ovintiv Inc

United States✓

Pfizer Inc

United States

✓

✓

✓

✓
✓

✓

✓

✓
✓
✓
✓

✓
✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

Johnson & Johnson

✓

✓

✓

United States
United States✓✓✓

Goldman Sachs Group Inc/The
International Finance Corp✓

CORPORATEBUSINESSGOVERNANCE ETHICS

Nestle SA

Bunge Ltd✓

CLIMATE RESOURCE & HUMAN
CHANGE ECOSYSTEMS CAPITALISSUER

Novartis AG

Bausch Health Cos Inc✓

SOCIAL
PUBLICRELATIONS HEALTH

Procter & Gamble Co/The

United States

PTC Inc

United States

Valvoline Inc

United States✓

Verizon Communications Inc

United States✓

Wells Fargo & Co

United States

Williams Cos Inc/The

United States✓

Walmart Inc

United States✓

United States of America

United States✓

Oriental Republic of Uruguay

Uruguay

✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓
✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓
✓

✓
✓

2020 Active Ownership and Stewardship Report 43

Appendices

Regulatory Review
The UK Stewardship CodePurpose and governance

Responsible Investment Research and Publications 2020
 How will investors tailor portfolios to tackle the climate crisis?

1. Purpose, strategy and culture ............................................................................................................................................................................................3
2. Governance, resources and incentives .....................................................................................................................................................................30-31
3. Conflicts of interest..............................................................................................................................................................................................................22
4. Promoting well-functioning markets ......................................................................................................................................................34, Appendices
5. Review and assurance.........................................................................................................................................................................................................35

 How have the UN SDGs helped to change the investment landscape?

Investment approach Coronavirus: How ESG scores signalled resilience in the Q1 market downturn

6. Client and beneficiary needs ......................................................................................................................................................................................32-33
7. Stewardship, investment and ESG integration ......................................................................................................................................................24-29
8. Monitoring managers and service providers.......................................................................................................................................................... 22, 31

 How does AXA-IM adapt portfolios to reflect the transition theme?
 Bringing an ‘impact’ mindset to listed equities

 How responsible investing standards and policies affect returns

Engagement

 COVID-19: Greening the recovery

9. Engagement.......................................................................................................................................................................................................................4-16
10. Collaboration............................................................................................................................................................................................................ 16, 46-50
11. Escalation................................................................................................................................................................................................................................17

 COVID-19: How a new breed of bonds can help finance the fightExercising rights and responsibilities

12. Exercising rights and responsibilities........................................................................................................................................................................18-23

PRI
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.......................................................24-29
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.............................................4-23
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest......................... 24-29, 30, 34, AppendicesPrinciple 4: We will promote acceptance and implementation of the Principles within the investment industry.......4, 50, AXA IM website
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.......................................Assessment Report
Principle 6: We will each report on our activities and progress towards implementing the Principles..............................Assessment ReportJapanese Stewardship Code
1. Institutional investors should have a clear policy on how
they fulfill their stewardship responsibilities, and publicly disclose it. ................................................................................................. Full Report
2. Institutional investors should have a clear policy on how they manage conflictsof interest in fulfilling their stewardship responsibilities and publicly disclose it. ..............................................................................................22
3. Institutional investors should monitor investee companies so that they can appropriately fulfill
their stewardship responsibilities with an orientation towards the sustainable growth of the companies. ............................. 14-17, 24-29
4. Institutional investors should seek to arrive at an understanding in common with investee companies
and work to solve problems through constructive engagement with investee companies. .........................................................................4-13
5. Institutional investors should have a clear policy on voting and disclosure of voting activity.
The policy on voting should not be comprised only of a mechanical checklist; it should be designed
to contribute to the sustainable growth of investee companies. ............................................................................ 18-23, voting disclosure site

 COVID-19: Has your workplace changed forever?
 AXA IM Taskforce for Climate-related Financial Disclosure Report highlights
 Strategic Asset Allocation for a +1.5°C World: a proposed framework
 COVID-19: Stewardship and the pandemic
 ESG and financial returns: The academic perspective
 2020 Proxy Voting Season Review: Beyond ‘business as usual’ Why agriculture threatens biodiversity, and how responsible investors can respond COVID-19: Accelerating the energy transition
 Impact Engagement Principles: Delivering on the UN SDGs
 Green bonds: How active management aims to make the most of a dynamic sector
 COVID-19: Investors find new ways to drive positive social outcomes Climate Alignment Principles: How to invest in line with a +1.5˚C goal

6. Institutional investors in principle should report periodically on how they fulfill their stewardship
responsibilities, including their voting responsibilities, to their clients and beneficiaries. .............................................................. Full report
7. To contribute positively to the sustainable growth of investee companies, institutional investors should develop
skills and resources needed to appropriately engage with the companies and to make proper judgments
in fulfilling their stewardship activities based on in-depth knowledge of the investee companies and theirbusiness environment and consideration of sustainability consistent with their investment management strategies. ....................30-35
8. Service providers for institutional investors should endeavor to contribute to the enhancement of the functionsof the entire investment chain by appropriately providing services for institutional investors to fulfill theirstewardship responsibilities............................................................................................................................................................................................. N/A

44 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 45

Appendices

Investor initiatives supported in 2020

Involvement

Involvement

Human Capital

ClimateInvestor Statement on Luxury, Transparency and Living Wage

Fortum Investor Coal Engagement Letter

Letter to call for increased transparency around the identification and management of material ESG issues
in the luxury industry (operations and supply chains) with a special effort on the living wage. The letter also
called for more collaboration on supply chains between brands, investors and stakeholders.

Co-signatory

Tech

CA100+/PRI Investor Engagement Guide on Climate for Aviation Companies
Co-signatory

Human Capital
Human Capital Research Project (SASB)
The Human Capital Research Project aims to assess the scope and prevalence of various human capitalmanagement themes across the SASB’s 77 industry standards; the final step being for SASB to publish a newversion of its human capital framework. AXA IM participated in one key consultation phase designed to seek
key stakeholder feedback on issues presented in the preliminary framework to inform potential revisions to
its general issue taxonomy for human capital issues.

Consultation

Signatory

ClimateAlongside 38 other investors, we signed a letter to companies operating in the energy, materials andtransportation sectors to ask them to align their financial statements with Paris Agreement goals. The letter
sets out five steps signatories expect companies to take to ensure climate risks are properly considered intheir accounts, including the associated risks.

Total Climate Action 100+ Joint Statement

Signatory

Signatory

Public policy
Non Financial Reporting Directive revision
Consultation

AXA IM responded to the EU Consultation on the Non Financial Reporting Directive revision

ClimatePublic policy

BP Climate Action 100+ Joint Statement

Sustainable Finance Disclosure Regulation - Regulatory Technical Standards

46 2020 Active Ownership and Stewardship Report

Signatory

Investors Expectation for Paris-aligned Accounts - IGCC

ClimateInfluenced by investor engagement led by the Climate Action 100+, BP announced early in 2020 that it was
targeting net zero emissions by 2050, or sooner. To deliver on this, BP said it is reviewing its organisation
to embed sustainability in its group-wide strategy. In May, BP and investors within the Climate Action 100+came up with a new joint statement providing more detail on the decarbonisation strategy implementation
plan with the announcement of a decrease in oil and gas production. As investors in the engagement
programme, we will continue to ensure BP integrates climate change in its business strategy and lookforward the publication of its report illustrating the company’s alignment to the Paris Agreement goals.

Signatory

Investor Letter on Indigenous Engagement
Following the destruction by Rio Tinto of the 46,000 year old Aboriginal heritage site in Juukan Gorge, we
joined an investors’ initiative and sent a letter to top mining companies on indigenous community rights
and the social license to operate. The investor letter requires companies to provide further information on
the action they are taking to understand and manage social risks related to communities at global level.
The statement recommends companies in the mining industry consider some risk management principles.
Applying these principles should bring more transparency and confidence to investors around how
companies are managing their social license to operate.

Open Letter to Data Analytics Providers (SASB)

Investors belonging to the Climate Action 100+ pushed the global energy company Total, through acollaborative engagement, to achieve net zero emissions by 2050, or sooner. Consequently, Total and the
Climate Action 100+ members published a joint statement where Total committed to achieve net zero by2050 across its operations and products (covering scope 1, 2 and 3 emissions) through action plans which
will be revised at least every five years.

The PRI and Climate Action 100+ joined forces to call on airlines and aerospace companies to address theirclimate risks and opportunities. This includes the implementation of action plans and targets for achieving
net-zero emissions by 2050. In addition, investors urged airlines and aerospace companies to establish
robust strategies for developing and commercialising sustainable alternative aviation fuels and technologies
with much lower carbon emissions compared to conventional jet fuels.

Human Rights

ESG Data
Just as we rely on data from financial statements to inform investment decisions, we need equally reliable,transparent ESG information to help inform investment decision-making. The letter invited data providers tomeet this market need through the collection and provision of company-reported data, following the SASB
framework as well as framework from other leading initiatives from the “Group of 5”.

Signatory

ClimateTech giants and human rights: Investor expectations
Statement developed by the Swedish Council on Ethics of the Swedish national pension funds and the Danish
Institute for Human Rights. It calls for big tech companies to integrate human rights into board oversight,
business strategy and policies, and into risk management. It also presses tech companies to disclose and reporton human rights, as well as to interact on these issues with stakeholders, policymakers and regulators.

In March 2020, investors including AXA IM called on Fortum to stop lobbying against the Paris Agreement,
and to phase out coal generation in line with the requirements consistent with a trajectory to meet net-zeroemissions by no later than 2050.

Signatory

Consultation

AXA IM responded to the EU Consultation on the SFDR RTS, along with its parent company

Public policy
EU Renewed Sustainable Finance
AXA IM responded to the EU Consultation on the Renewed Sustainable Finance strategy, along with its parent
company

Consultation

2020 Active Ownership and Stewardship Report 47

Appendices

Investment industry partnerships and collaborations in 2020

30% Club Investor GroupThe 30% Club Investor Group’s purpose is to co-ordinate the investment community’s
approach to diversity. This includes explaining the investment case for more diverse boards
and senior management teams, exercising our ownership rights – including voting andengagement – to effect change on company boards and within senior management teams.
In addition, it encourages all investors to engage on the issue of diversity with chairs ofboards and senior management teams.
“Chair of the French group Member of the UK group”

Access to Medicine Index

The Access to Medicine Index covers seven areas of corporate behaviour. In each one, theIndex evaluates 20 of the world's largest research and development-based pharmaceuticalcompanies against a list of responsibilities for improving access to medicine as they enter
low and middle-income countries.
“Expert Review Committee member Donor”

Access to Nutrition Initiative

Association Française de la Gestion
Financière (AFG) - Responsible Investment
and Corporate Governance Committees

The AFG is the French industry body for asset management.

CDP (Carbon Disclosure Project)

CDP works with shareholders and corporations to disclose the greenhousegas emissions of major corporations.

The Climate Action 100+ coalition aims to engage and work with companies and industry
members to communicate the need for greater disclosure around climate change risk andcompany strategies aligned with the Paris Agreement.
Signatory

Climate Bonds Initiative

Finance for Biodiversity "Investor
Statement" calling for the creation of
biodiversity metrics (Joined 2020)

Call for experts to create biodiversity impact metrics.

FIR (Forum pour l’Investissement
Responsable)

The FIR's purpose is to raise awareness on social and responsible investing, andto encourage investors to integrate social cohesion and sustainable development
considerations in their work. The FIR is member of the European network Eurosif.

Climate Bonds Initiative is an international organisation working solely to mobilize thelargest capital market of all, the $100 trillion bond market, to create climate changesolutions.
It promotes investment in projects and assets necessary for a rapid transition to a low
carbon and climate resilient economy.

GIIN (Global Impact Investing Network)

The EU Business @ Biodiversity Platform provides a unique forum for dialogue and policy
interface to discuss the links between business and biodiversity at EU level. It was set up by
the European Commission with the aim to work with and help businesses integrate natural
capital and biodiversity considerations into business practices.
The EU Community of Practice Finance@Biodiversity workstream will serve as a forum of
dialogue between participants to share experiences, raise awareness and promote bestpractices at EU level on how to integrate biodiversity and natural capital into mainstream
financial activities and foster investments in natural capital as a new asset class.
MemberEuropean Fund and Asset Management
Association (EFAMA) Stewardship and ESG
Standing Committee

48 2020 Active Ownership and Stewardship Report

The EFAMA is the European industry body for asset management.
Member of the ESG and Stewardship Committees

The GIIN focuses on reducing barriers to impact investment so more investors canallocate capital to fund solutions to the world's most intractable challenges. We do this bybuilding critical infrastructure and developing activities, education, and research that help
accelerate the development of a coherent impact investing industry.
Member of the Investor Council Group. Active participant of the Network including
speaking at GIIN events on compelling topics

GRESB (Global Real Estate Sustainability
Benchmark)An industry-driven organisation committed to assessing the sustainability performance ofreal estate portfolios around the globe.
Fund Member, Investor Member, Benchmark Committee member, Infrastructure Debt
working group member

ICMA - Climate Transition Finance working
group

The Working Group will consider the concept of transition financing in the context of thegreen bond market.
Co-Chair

ICMA - Green and Social Bond Principles

Member. Particular involvement in the “brown to green initiative”
EC B@B (European Commission Business@
Biodiversity)

Co-lead - Ad hoc initiative

Chair of the Research commission

Member of the RI and CG Committees

MemberEurosif’s mission is to promote sustainability through European financial markets. The
main activities of Eurosif are public policy, research and creating platforms for nurturing
sustainable investing best practices. Eurosif works as a partnership of Europe-based
national Sustainable Investment Fora (SIFs). Eurosif is also a founding member of the Global
Sustainable Investment Alliance, the alliance of the largest SIFs around the world.
Through member organisations

Initiative to support and spur greater investor engagement with companies to address
global nutrition challenges and deliver the Sustainable Development Goals.
MemberClimate Action 100+Eurosif (European Sustainable Investment
Forum)The Group has an oversight role on the Green Bonds Principles. The Green Bond Principles
and Social Bond Principles, as well as the Sustainability Bond Guidelines, referred to as the“Principles”, have become the leading framework globally for issuance of green, social andsustainability bonds.
AXA IM has been at the Executive Committee since 2017 and reelected at the 2019
AGM for 2 years. We also participate actively to the following working groups: Impact
Reporting, Green Projects Eligibility and Social Bonds

IIGCC Paris-Aligned Investment Initiative(Joined 2019)

PAII looks at how investors can align their portfolios to the goals of the Paris Agreement.

Net Zero Asset Management Initiative

The Net Zero Asset Managers initiatives will play a critical leadership role in directing theasset management industry towards a net zero future. A signatory commits to support
the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts
to limit warming to 1.5°Celcius. It also commits to support investing aligned with net zero
emissions by 2050 or sooner.

MemberFounding Member

2020 Active Ownership and Stewardship Report 49

Appendices

Investment industry partnerships and collaborations in 2020 (continued)

RI and Impact Excellence Center
38 dedicated RI professionals embedded within our investment processes

David Baudouin

Thomas Roulland
One Planet Asset Management WG

Following the 2015 Paris Agreement to collectively mitigate the effects of climate change,
the One Planet Summit was held on 12 December 2017, which was followed by the Climate
Finance Day, recognising the important role played by this key sector. Given both theirinfluence and long-term investment horizons, SWFs are uniquely positioned to promote
long-term value creation and sustainable market outcomes. Accordingly, the “One Planet
Sovereign Wealth Fund Working Group” was established at the event in order to accelerate
efforts to integrate financial risks and opportunities related to climate change in the
management of large, long-term asset pools.

Head of RI Solutions,
Models and Tools

ESG Analyst

Julien Bertrand
ESG Analyst

Danika Matheron
ESG Analyst

Laurent Clavel

Head of Quant Lab

MemberPRI (Principles for Responsible Investment)

Ashley Keet

The PRI is the world’s leading proponent of responsible investment. It works to understandthe investment implications of ESG factors and to support its international network ofinvestor signatories in incorporating these factors into their investment and ownershipdecisions.

Amanda Prince

Global Head Of Core
Investment Analytics

Member
SASB - Sustainability Accounting Standards
Board

Senior Investment Analyst

César Vanneaux
Portfolio Engineer

Marie Walbaum

RI Solutions Expert

Hans Stoter

Global Head of AXA IM Core

The Urban Land Institute, or ULI, is a nonprofit research and education organization with
regional offices in Washington, D.C., Hong Kong, and London. Its stated mission is "toprovide leadership in the responsible use of land and in creating and sustaining thriving
communities worldwide".

Cyril du Chéné

RI Project and Process
Manager
Laurence Devivier

Sustainability council Member
UNEP FI (United Nations Environmental
Program Finance Initiative)

Mitesh Patel

The mission of the SASB Foundation is to establish industry-specific disclosure standards
across environmental, social, and governance topics that facilitate communication
between companies and investors about financially material, decision-useful information.
Member of the Investor Advisory GroupULI (Urban Land Institute)

Senior Investment Analyst

Virginie Derue

Global partnership between UNEP and the financial sector, working with UNEP tounderstand the impacts of environmental and social considerations on financial
performance.

Head of RI Research

Sovereign analysis and RI standards

Julien Foll

Biodiversity and Green Bonds

Marie Fromaget

Human Capital and Gender Diversity

Property working group

Théo Kotula

Data Privacy and Green Bonds

Gilles MoëcAXA Group Chief Economist
and Head of Research

Lise Moret
ClimateMarine Jubert-Sirgue

Clémence Humeau

Head of RI Coordination
and Governance

Investment
Teams
17 Equity & Fixed Income
RI Analysts 1

RI Coordinator

Julie Cavaignac

RI Coordinator analyst

Antoine Najm

Corporate Governance

Irfan Patel

Corporate GovernanceSource AXA IM as of 01/03/2021.
Some resources are shared by the entire AXA IM Organization. There is no assurance that any particular individual will be involved in the management of theportfolio for any given period of time, if at all. We do not guarantee the fact that staff remain employed by AXA Investment Managers and exercise or continue
to exercise in AXA Investment Managers.
1
FTEs who devote at least 70% of their time to ESG analysis and responsible investment.
50 2020 Active Ownership and Stewardship Report2020 Active Ownership and Stewardship Report 51

This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial
instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell
any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment
strategy or a personalized recommendation to buy or sell securities.
It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are theexpression of an opinion, based on available data at a specific date.
All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers
disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise,
are as of the publication date of this document.
Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary
used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in
whole or in part is, unless otherwise authorised by AXA IM, prohibited.
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