September 2023

Responsible Investing
AXA IM Soft commodity
derivatives policy

Institutional investors commonly gain exposure to commodity markets via commodity derivatives,
namely exchange traded future contracts. There is a growing debate regarding whether financial
investors in food commodity derivatives are responsible for artificially inflating the price of basic foodcommodities, leading to increasing future prices. However, while the link between hunger and foodprices is relatively plain, the relation between commodity derivatives trading and food price increases
and volatility is less clear among academics. Indeed many other factors impact prices such as energy
prices, climate change, rising demand for agriculture products and grain-led livestock. In this ongoingdebate, AXA IM has made the decision to not invest in food commodity derivatives.
AXA IM has been a member of the PRI1 since 2007 and is committed to promoting responsible investment (RI). For these reasons,the Management Board of AXA IM decided in December 2014 to implement a policy for investments related to soft commodity
derivatives.
AXA IM strives to not invest in instruments such as commodity futures and ETFs based on food (“soft”) commodities or enter
into speculative transactions that may contribute to price inflation in basic agricultural or marine commodities (such as wheat,rice, meat, soy, sugar, dairy, fish, and corn).

1 Principles for Responsible Investment: PRI | Home (unpri.org)

1September 2023

Scope
Financial instruments
The policy applies to all single-name financial instruments issued by the identified companies or offering exposure to identified
companies, and to commodity futures and ETFs based on soft commodities.
Portfolios
The policy applies in principle to all portfolios under AXA IM’s management, including dedicated fund and third-party mandates
unless the client has given different instructions for its mandate or the fund has been exempted for risk management reasons.
The policy does not apply to:Funds of funds composed of funds which are not under the management of AXA IM,
Index funds except for ETFs based on soft commodities,
Funds of hedge funds,
Tenants in real estate portfolios.
The policy applies to direct product investments, overall with no look-through except when local laws or regulations require todo so.
Entities
This policy applies to AXA IM and to all its subsidiaries worldwide. It applies to Joint Ventures when AXA IM’s stake is 50% orhigher.

Implementation
This policy is implemented on a best-effort basis, taking into account local regulation and the best interests of both the client
and the fund. If the application of this standard dictates divestments, portfolio managers shall disinvest as soon as possible on a
best-effort basis taking into account the technical implementation timing and the portfolio impacts based on market conditions,liquidity and portfolio construction constraints. In practice, some targeted instruments could remain in the funds or mandates
for a period if deemed in the best interest of their clients and provided that it is compliant with the applicable Laws; however,those holdings cannot be increased2. For certain alternative products such as Collateralized Loan Obligations (“CLOs”), MutualSecuritization Funds (“FCT” in French), closed-ended alternative funds and other alternative products, if the divestment isconsidered impossible, such holdings in portfolio could be kept until maturity following an internal validation process.
The exclusion lists are prepared using information from external data providers, and although a qualitative review is performed,
AXA IM is therefore not responsible for the accuracy of this data.
The implementation of this policy is subject to compliance with asset management local laws or regulations; therefore, somespecific alternative implementation mechanisms of this policy may be put in place locally. In the EU, the implementation of thispolicy is part of the compliance with SFDR requirements as it constitutes AXA IM’s approach to consider sustainable investments
for the ‘Do No Significantly Harm’ (DNSH) criteria (i.e., applicable to Article 8 and Article 9 funds). Thus, if the application of thisstandard dictactes divestments, portfolio managers shall disinvest for their product to be classified Article 8 or Article 9, following
the abovementioned implementation process.

2 Such tolerance could be applied, for example in relation to strategies with accounting objectives (e.g., ‘buy & maintain’ strategies), or forconcentrated strategies with appropriate validation from oversight functions.
2