April 2024

AXA IM
Stewardship
Report 2023
Our purpose isto act for humanprogress byinvesting forwhat matters.
This report is our
purpose in actionand evidence ofour commitment
to transparency
Marco Morelli,
AXA IM Executive Chairman

Contents

Introduction.......
Marco Morelli, AXA IM Executive Chairman
page 3Engagement, collaboration and escalation......
Gilles Moëc, AXA Group Chief Economist and AXA IM Head of Research
page 5Engagement in 2024: Research thematics
Virginie Derue, AXA IM Head of RI Research
page 6Engagement in 2023: Highlights and data
page 9Engagement themes:
Climate change, Biodiversity, Gender diversity,
Responsible technology, Social, Governancepage 12

Protecting our shared interests
page 34

Promoting well-functioning markets
Public Policy

Clémence Humeau, AXA IM Head of Sustainability Coordination and Governancepage 40

VotingVoting: Key 2023 DataHéloïse Courault, Constance Caillet and Alexandre Prost
AXA IM Corporate Governance & Stewardship Analysts
page 44

Voting: Our priorities and plans
page 52

ESG Integration into platforms
Putting ESG to work
Identification of Risks
AXA IM CoreAXA IM Alts
AXA IM Prime
page 54

Governance, resources, incentives and monitoring
How the Responsible Investment team is organised
Inclusion and diversity
Learning and development
Performance management and remuneration
Third-party service providers and due diligence
page 74

Client and beneficiary needs
Supporting client needs
About us and about our funds
page 82

Review and assurance
Accountability
page 85

Appendicespage 87

2 AXA IM Stewardship Report 2023

Introduction

We remain steadfast in driving progress
to a sustainable futureindustry bodies and regulators, votewith conviction at company meetings,
and maintain dialogue with companies.

Marco Morelli
AXA IM Executive Chairman

Investment does not have to be abinary choice between sustainability
and strong financial performance.
Clients need clarity on Responsible
Investing (RI) – and they also want to
see their assets perform. This 2023
Stewardship Report sets out how AXA
Investment Managers works to meetboth these goals and how, in doing so,
the company reinforces its purpose, ‘toact for human progress by investing forwhat matters’.
As an investor, AXA IM’s primary goal is
to deliver returns and outcomes for its
clients, whilst keeping responsibility
central to everything it does. This
includes enabling the transition to amore sustainable future and continuing
to develop a distinctive industryleading offering to enable clients toinvest in sustainable strategies, orin sectors that will benefit from thetransition.
The company also believes that properconsideration of Environmental,
Social and Governance (ESG) factors
are additive to performance, which
is why a robust and measurable
stewardship and engagement strategy
is fundamental to its approach; andwhy AXA IM’s RI teams advocate with

I am proud of AXA IM's record ofengaging with companies across aconsiderable spectrum of ESG themes.
In 2023, a substantial percentage ofengagements focussed on climatechange (37%), followed by corporate
governance (17%), human capital (17%)
and resources & ecosystems (16%).
AXA IM’s teams also prioritise social
relations, business ethics and publichealth. In addition, they ensure thatengagements happen across a range ofasset classes. This Stewardship Report
includes case studies that demonstrate
the impact of investor dialogue, andI was delighted to see the CFA has
referenced AXA IM in their CFA ESG
learning, as good practice for disclosure
on engagement activity.
Looking ahead to the next three yearsof the company’s strategic plan, AXA
IM will continue to be an advanced
responsible investor, ensuringcontinued emphasis on stewardship asa key element of its approach to RI. The
company will prioritise transparency,
assertive engagement, and a focus on
critical issues such as biodiversity loss,
pollution and human and worker rights- as defined by the RI team and by the
Portfolio Managers who are in regulardialogue with market participants.

giving more details on the content of
those discussions, level of progressand objectives. As a business, now
more than ever, it is important that thecompany is open about what it does
and why it does it. Regular and public
self-monitoring of RI efforts – throughstewardship reporting and throughtools such as the AXA IM for Progress
Monitor – ensures that AXA IM holds
itself to account.
Progress on sustainability also
requires collective action and AXA IM iscommitted to remaining active withina range of collaborative initiatives,
such as Climate Action 100+ initiativeand Nature Action 100 (NA100) to help
foster change.
I am confident that by maintaining theemphasis on transparency, commitment
to a more sustainable future, andengagement with likemindedstakeholders, AXA IM will strengthen its
ability to deliver sustainable long-term
performance for clients.

As AXA IM strives to provide thehighest level of transparency to all its
stakeholders, in 2024 the company
will start disclosing the rationale
for all votes against ESG-relatedshareholder proposals and against
shareholder resolutions. In addition,
it will provide clients with enhanced
portfolio level Engagement Reports,

AXA IM Stewardship Report 2023 3

4 AXA IM Stewardship Report 2023

Engagement, collaboration and escalation

Performance at the heartof Responsible Investment

subsequent underperformance of the energy
sector versus the MSCI Europe Index in 2023
proved the doubters wrong.
There will always be short-term periods of
weaker returns. But over the long-term webelieve the evidence is clear: ESG works as aninvestment approach.

Gilles MoëcAXA Group Chief Economist and
AXA IM Head of Research

Responsible investment is coming underattack.
Some critics argue that investors should only
care about financial returns and that ESG
is a distraction. Others simply believe thatanything related to ESG is, to some extent,
greenwashing.
We disagree with both points of view.
The reason AXA IM focuses on RI is that we
believe it will be beneficial from a financial
standpoint, especially looking at medium tolong-term horizons. There is no contradiction
between non-financial commitments contributing to mitigating climate change,for example - and generating sustainable
performance. Said differently, as a diversified
investor which invests in the whole economy
and multiple asset classes, we believe thatover the long-term financial materiality anddouble materiality converge.
Indeed, we believe that in the medium tolong-term, businesses which are low oncarbon, socially aware and display the best
governance practices are likely to overperform their peers, and help improve the risk
profile of portfolios.
There will, of course, be times when ESG
funds underperform – 2022 being a notable
example. But ESG indices during that period
were negatively impacted by a sectoral bias
amid temporarily high energy prices. The
1

The cost of ignoring reality
Not everyone agrees on the extent or cause ofclimate change. But there is a financial cost to
paying no heed to the governmental response
to it.
For us, ignoring the transition to net zerois equivalent to forfeiting the impact of thebillions which governments are going to spend- and are already spending - to transform oureconomies, support the decarbonisation ofhigh emitters, and assist those companies
providing solutions necessary to thetransition.
In the US, the Inflation Reduction Act, thelargest piece of federal legislation ever toaddress climate change, provides massive
subsidies to help support the transition. Do
investors really want to forego exposure tothese handouts? It is, after all, free money.
If it pays to be mindful of the benefits
associated with efforts to tackle climatechange, however, we must also recognise
physical and social risks will necessarily
impact the financial performance of several
sectors.
Carbon taxes are already a reality in Europe
and will likely extend geographically, as well as
across industrial sectors. This means the usual
measures of financial performance will bedirectly impacted by firms’ carbon intensity.
With the price of carbon rising, at least in somecountries, these financial realities represent
a further risk that investors simply cannot
afford to ignore. This will exceed the strict
boundaries of Europe. The introduction of the
carbon adjustment at EU borders will affectthe price of heavily carbonated products
originating from non-European producers.

Clarity on RI principles
The central role of the financial sector insupporting an effective transition towards
climate neutrality has meant sustainablefinance policies came into force in several
geographies over recent years. Often withdifferent approaches and criteria, thesebrought complexity and some confusion
in recent years. A multiplicity of different
metrics, targets and definitions litter the ESG
landscape, and more simplicity, comparability
and inter-operability is needed.
Against this backdrop, we want to be veryclear about our policies, and about theframework which guides our engagementwith companies.
Our ‘Three Strikes and You’re Out’ policy,
for instance, makes plain to companies wedeem climate laggards that, unless they
make sufficient progress within three years on
emissions reduction targets and investment inrenewables, we will vote against management
and ultimately divest.
Supported by our engagement within thisframework, we are pleased to say that twocompanies were recently removed from our
Climate Laggards list, after they enhanced
their strategies and met our engagement
objectives.
Our robust engagement policy andgovernance is a key pillar of our ambition toremain an advanced player in responsible
investing. We are also deeply convinced thatpublic, regular and quantified monitoring of
our ESG commitments – e.g. through our AXA
IM For Progress Monitor, organised around 8
KPIs - is key to maintaining such positioning.
Consistency, clarity, and transparency
guide our approach, and help us shape theinvestment solutions which best address theinvestment and sustainability objectives ofour clients.

Source: MSCI as at 29 December 2023
AXA IM Stewardship Report 2023 5

Engagement, collaboration and escalation

Engagement in 2024:
Research thematics
Transition focus on engagement

Virginie Derue
AXA IM Head of RI ResearchThis year will be an extraordinary
12 months on the political front, as
more than 60 countries are goingto the polls, and this backdrop willundoubtedly impact the course ofsustainable finance. Polarisation
around key environmental, social andgovernance (ESG) issues is therefore
set to increase globally, injecting
uncertainty into climate policies.

Meanwhile, transition should become
the key area of focus, echoing COP28
in its call to support the wholeecosystem’s transformation. Green
investments are important, butwhat needs to be financed is thetransition to a greener economy andwhat actually supports the shift ofcompanies towards more sustainablebusinesses.
There is still no precise framework
defining what transition finance is,and this will clearly slow the transitionof high emitting sectors. This is evenmore an issue as companies in some
sectors will have to contend withincreasingly stringent emissions
reduction policies that will raise
operating costs going forward throughthe European Union’s (EU) emissions
trading scheme for instance.

2

Deforestation, water, waste and Pollution
6 AXA IM Stewardship Report 2023

As such, the focus on transition will drive
specific attention on engagement, echoing
a broader request to prevent ‘engagement
washing’. Asset managers will have toshare more about their assessment oftransition plans, what they focus on,
and how they adjust their approachto the different sectors and different
regulations. This year should accordingly
mark a turning point in the field of
climate assessment/engagement withthe beginning of a second phase, movingfrom objectives setting, to deliverability
and track record on first interim targets.
No doubt it will trigger some shifts
in assessments and investments, as
investors will be scrutinised on how their
engagements effectively bear fruit.

Biodiversity loss in greater focus

Beyond climate, ecosystem vulnerability
and biodiversity loss are set to rise up
investors’ agendas, supported by therelease of the Taskforce on Nature-related
Financial Disclosures (TNFD) frameworkand the coming into force of the EU
deforestation regulation that will start toapply from the end of 20242.
Deforestation, water, waste and pollution
should accordingly be the key aspects
tackled by investors and engagers,
including as a potential risk for litigation.
Sector wise, the food industry is likely
to see increased scrutiny, driven by its
contribution to environmental degradationand interplay with climate change, as
echoed at COP28. It represents risks, butalso opportunities for companies targeting
specific activities in the field of regenerative
agriculture for instance, but also various
segments such as water consumption
monitoring, waste avoidance and recycling.

Human and workers’ rights

Finally, social aspects and more
specifically human and workers’ rights
should continue to gain traction, driven
by ramifications of transition plans,due diligence regulations and clientdemand over broader sustainability
claims. Living wages, work conditions,
unionisation and social dialogue are
structural issues that have been tosome extent overshadowed by climate
concerns until recently, but now
investors are starting to consider themmore seriously. In the same vein, we
believe the focus on human rights willkeep on intensifying in 2024 in tandemwith regulatory pressure.
A qualitative review of controversies andof what is at stake is necessary, as at theend of the day, investors will have totake their own view around the severityof the cases, the red lines they have,and ultimately, the need to exclude orengage. Beyond any tick-box exercise
on codes of conduct or existence ofgrievance mechanisms, what matters to
us is concrete evidence of what is doneon the ground by corporates to prevent,alleviate and remedy issues at stake.
More broadly, responsible investment
is likely to broaden its lens, shiftingfrom a net zero focus to a more holistic
perspective of sustainability, integrating
the different environmental and social
negative externalities driven by thetransition.
All this translates into a very busy 2024
agenda for the team in terms of researchand engagements.

Engagement in 2023:
Highlights and data3
At AXA IM, our purpose is to act forhuman progress by investing for whatmatters. Responsible allocation andoversight of capital is therefore a key
pillar of our corporate purpose. By
considering sustainability factors
throughout the investment process, we
aim to create sustainable investment
outcomes for our clients, which wouldin turn lead to broader societal andeconomic benefits over the long term.
An important way to achieve it involves
investor engagement, which can be
defined as a process based on long-termand constructive dialogue where investors
seek to influence investee companies’
practices with the aim of preserving or
enhancing long-term value on behalf of
their beneficiaries. Investor engagement
also enables a better understandingof companies’ management ofsustainability risks, contributing to amore comprehensive assessment of
the company’s risk profile, hence toeffective investment decision making.
Our Responsible Investment (RI) thematic
research on key ESG issues such as
climate change, biodiversity, responsible
technology, human capital and humanrights, and corporate governance feeds
our stewardship strategy.
Since 2022, AXA IM has distinguishedbetween ‘engagement with objectives’and ‘sustainability dialogues’. The
former seeks to influence change atinvestee companies, by defining specificobjectives related to the key ESG issues
at stake for the targeted company andis most often led by the Responsible
Investment Research and the Corporate
Governance Research teams, often withthe participation of fixed income and/or equity teams. The latter, often led byinvestment teams, aims to have a better
understanding of the sustainability-related
risk profile of a position held in portfolios,
potentially feeding into future targeted
engagement.

3

Figures in this section may be rounded

In 2023, we conducted 681 engagementswith 503 entities, representing a 14%
increase in engagements compared to2022 – showcasing the importance of
stewardship in our responsible investment
strategy, and its integrated approach.
The increase was observed both forengagement with objectives, with 298‘engagement with objectives’ with 207
issuers in 2023, and for sustainability
dialogue, with 383 sustainability
dialogues with 328 issuers, an increaseof 60%. Engagement and dialogue areoften conducted in collaboration withvarious teams, providing both strategic
and technical views of the company’s
practices but also demonstrating AXA IM's
integrated stewardship approach, whichallows the information gained during
engagement to be fed into investmentdecision making.
Climate change remains our main themeof engagement, representing 37% of
the overall engagements compared to
28% of 2022 engagements. This increase
was largely driven by higher - frequency

sustainability dialogues, for which climatechange represents 46% of engagements and is a good illustration of the integrationof climate considerations in investment
teams’ activities, in line with AXA IM’s net
zero commitment.
Regarding ‘Engagement with objectives’,
demonstrating the strong interlinkage
between themes, 38% of climate change
engagements also address corporate
governance-related topics, notably
focusing on the articulation of the climate
strategy and objective as well as withcompanies’ management structures andincentives. In addition, more than 29%
of climate-related ‘engagements with
objectives’ also addressed biodiversity
issues, an increase on 2022, due tosynergies between greenhouse gas (GHG)
emissions and deforestation ('the climatebiodiversity nexus').
Corporate governance and human capitalare the second most targeted themes
followed by resources and ecosystems,
business ethics and public health.

Our engagement with companies covers a broad spectrum of key

ESG themes

2%

Business Ethics

17%

Corporate Governance

17%

37%

Human Capital

Climate Change

1%

Public Health

16%

10%

Resources &Ecosystems

Social Relations

Approach

Number%Engagement with objective

298

44

Sustainability dialogue

383

56

Source: AXA IM, end-2023
AXA IM Stewardship Report 2023 7

Engagement, collaboration and escalation

Engagement in 2023:
Highlights and data
Engagement with objectives
Climate change, corporate governanceand resources and ecosystems were themain themes addressed by Engagementwith Objectives in 2023.

Engagement category (EWO)

11%

Collaborativelead

We believe that collaborating with otherlikeminded investors and stakeholders
can help us to exercise good governanceover the companies in which we haveinvested. Indeed, using a collective
voice is a powerful engagement tool. In
that context, 27% of the ‘engagementwith objective’ in 2023 was conductedin collaboration with other investors, anincrease compared to 2022.
AXA IM has been a founding memberof a number of such collaborative
initiatives in 2023 and 2022,
contributing to the framing anddefinition of initiatives’ objectives
and then starting to engage with preselected issuers. In 2023 for example
AXA IM co-founded with Sycomore
Asset Management an initiative focusedon mental health and wellbeing risks
related to technology companies’
products and services. We were alsopart of the Nature Action 100 (NA100)
launch investor group, which seeks
to engage companies in key sectors
deemed to be systemically important inreversing nature and biodiversity loss
by 2030.

Furthermore, we used more escalation
techniques in 2023 when analysing
absolute numbers, to push companies
to achieve their engagement targets.
Vote escalation is the main escalation
technique used (63%), in particular
on remuneration-related resolutions.
Other escalation techniques include
collaborative engagement, and joining
forces with other investors to aim to
influence issuers

8 AXA IM Stewardship Report 2023

16%

Collaborative
participant

73%

One-to-one
engagement

Escalation Type

Number%Vote Escalation Non-Communicated

2

12,5

Vote Escalation Communicated850

Collaborative Escalation

6

37,5

+14%
engagements

compared to 2022

Source: AXA IM, end-2023

200
engagements

at senior executive or
board director level

Highlights and data

Sustainability Dialogues
In light of further ESG integration
at portfolio level, an increasing
number of investment teams
are contacting companies to get
additional information on theirsustainability strategy in order tobuild a comprehensive ESG analysis
of companies. This complements ESGrelated data we receive from external
data providers.
A large part of our sustainability
dialogues is conducted as part ofour global net zero strategy, to get abetter understanding of companies’
GHG emissions reduction targets andarticulation of their operational andcapital expenditure to achieve thosetargets. This aims to focus our portfolio
on companies which are reducing their
GHG emissions to achieve our carbon
intensity reduction objectives, reported
in our AXA IM For Progress Monitor.

Outlook for 2024
We will continue to roll out the robust
policy and processes for listed assets
we have developed over the past
years for engagement with objectives
and sustainability dialogue. This willallow us to leverage our position as anequity and a bond holder to use thedifferent interactions with the investee
companies to maximise the impact of ourengagement and likelihood it will effectchangeAs an investor active in real assets, private
markets and fund selection we will also
increasingly aim to create sustainablevalue by encouraging the managers andpartners we work with to adopt bestpractices when it comes to integrating
sustainability in their strategy. We will
also look at ways to leverage some of thebest practices developed as part of ourengagement in traditional asset classes
for this purpose
Policy advocacy will also remain an
important priority, and among othersustainable finance themes we will
focus on issues which could impede
the effectiveness and influence ofshareholder engagement and voting in
the European Union and the UK.

As further described in this report,a few sustainability dialogues arealso conducted with Green, Social,
Sustainability and Sustainability-Linked
bonds issuers at the pre-issuance level,
to better understand the relation to
articulation of the issuance with theglobal issuer’s sustainability strategy,
but also post-issuance, notably to verify
use of proceeds are in line with theobjective of the issuance.

Reporting

Finally, in 2023 we worked on increasing
disclosure of our engagement
activities at portfolio level. We will
release in early 2024 an enhanced
version of our Engagement Report at
portfolio level, providing additional
qualitative information on the content
of discussions, level of progress andobjectives asked of investee companies
which were subject to engagement.

AXA IM Stewardship Report 2023 9

Highlights and data
In 2023, we engaged with companies

across the world

Source: AXA IM, end-2023(figures may not total 100% due to rounding)

Argentina
Australia
Austria
Belgium
BermudaBrazilCanadaChile
China
Colombia
Denmark
FinlandFranceGermany
Hong Kong
Hungary
India
Indonesia
Ireland
Italy
Japan
Kazakhstan

0.15%
2.22%
0.15%
2.66%
0.15%
1.18%
2.22%
0.59%
1.33%
0.59%
0.74%
1.18%
18.02%
5.47%
0.15%
0.15%
0.30%
0.30%
1.18%
4.14%
4.14%
0.30%

Korea (the Republic of)
Luxembourg
Malaysia
MexicoNetherlands (the)NorwayPortugal
Qatar
Romania
Saudi Arabia
South Africa
Spain
SwedenSwitzerland
ThailandTürkiyeUkraineUnited Arab Emirates (the)United Kingdom of Great Britain
and Northern Ireland (the)

0.30%
0.89%
0.15%
0.44%
4.14%
0.74%
0.74%
0.15%
0.30%
0.15%
0.15%
2.66%
2.95%
2.81%
0.15%
0.15%
0.15%
0.89%
11.82%

United States of America (the)Uruguay

22.90%
0.15%

More than69%
of our engagements in 2023 were linked to the UN SDGs. The breakdown is as follows:

Source: AXA IM, end-2023.
10 AXA IM Stewardship Report 2023

0.21%

0.21%

1.71%

4.49%

0.64%

4.27%

15.60%

1.07%

0.85%

4.27%

12.61%

44.87%

0.21%

7.91%

1.07%

SDGs shown for illustrative purposes only

AXA IM Stewardship Report 2023 11

Engagement, collaboration and escalation

Engagement themes
Climate change▶▶▶

Olivier Eugène
AXA IM Head of Climate Research

Last year was another 12 months ofrecord coal and oil consumption4 –and greenhouse gas emissions. It wasalso a period when extreme weather
events occurred all over the planet and,according to the World MeteorologicalOrganization, it was the warmest year onrecord5. More positively, it was also a year
when record solar and wind capacities
were installed and when clean energy
investment continued to pull ahead offossil fuel investment.6
COP28 was held in Dubai at the endof 2023 and while the outcome was,as always, a subject of debate7, wewould stress the final stocktake8 fully
acknowledges the work and conclusionsof the Intergovernmental Panel on Climate

4

5
6
7
8
9

Change. It highlighted the necessity todifferentiate countries depending on theirdevelopment levels, connected climate,biodiversity and social justice, and forthe first time recognised the need totransition away from fossil fuels. In otherwords, nearly 200 countries have signed
an official document stating that climatechange is real, it is man-made, and it isnecessary to transform society to tackle it.

facing the obstacle instead of bickeringin front of it. It implies being clear andtransparent, that the energy transition is
wide and large, and will impact everyone,
everywhere.

The next phase• Understanding scope 3: How
responsible investors can wrestle withthe unruliest of emissions, in February

The next step is however the most crucial.
Beyond acknowledgments and intentions,
it is time for more action, more ambitious
policies, and acceleration. Not enoughwas done in recent years – and this is a
global and collective failing. The final
stocktake makes it clear the world is not
on track to achieve the goal of the Paris
agreement9 and the window to do so is
closing quickly. In this same report a year
ago, we questioned whether 1.5°C was
still achievable. We believe the questionis even more valid today. However, whilemoving the goalpost might become
unavoidable, keeping alive the Paris
Agreement’s spirit is paramount. It implies

In 2023, our research efforts continued
to focus on several aspects of the energy
transition and touched on specific events.
We published the following reports:• Feeding the world and protecting theplanet: A biodiversity and climate
challenge for investors, in May, incollaboration with our biodiversity expert• Biofuels and the energy transition: Green
sprouts or biowashing?, in September• A preview – COP28: What can investors
reasonably expect? – and a post view –COP28: Limited expectations met withsome progress on climate finances – of
COP28, in October and December.

Coal 2023 - Analysis and forecast to 2026, IEA, December 2023
Oil Market Report - January 2024, IEA, January 2024
WMO Provisional State of the Global Climate 2023, WMO, November 2023
World Energy Investment 2023, IEA, June 2023
COP28: Limited expectations met with some progress on climate finance | AXA IM Core (axa-im.com)
Outcome of the first global stocktake, UN, December 2023
The 2015 Paris Agreement, signed at COP21, sought to limit global warming to well below 2˚, and preferably to 1.5˚ Celsius, above pre-industrial levels

12 AXA IM Stewardship Report 2023

Engagement status

Our engagement goals and activity
Engaging with companies on climate andtheir decarbonisation strategies remained a
top priority of our 2023 engagement strategy,
given AXA IM’s objective to reduce thegreenhouse gas footprint of our investments
in line with our net zero by 2050 commitment.
This makes climate change the mostcommon theme of our engagement activities,
representing 37% of our total efforts in 2023.
While this theme is universal and relevant
to all firms from all sectors, we focus ourefforts where materiality is greatest, notablyenergy (hence the relevance of United
Nations Sustainable Development Goal
(UN SDG) 7 and SDG 13), but also banks –through their lending policies – as well as
the building materials industry. Engagementwith companies operating in these sectors
represented more than half our total climaterelated engagements in 2023. Companies
engaged are selected based on their absoluteemissions and on the exposure in theportfolios we manage for our clients.
We also participated in collective
engagements, mostly within the Climate
Action 100+ (CA100+) initiative10, and weheld meetings with the three companies
where we are a co-lead investor - Ecopetrol,
Renault and Saudi Aramco. While theengagements with Renault and Ecopetrol
have been constructive and progressed forseveral years now, the relationship with Saudi
Aramco has been patchier. After more thana year of silence, we managed to meet with
its head of sustainability in autumn 2023
following the publication of the company’s
second Sustainability Report. We expressed
our expectations in terms of improvements
in scope 1, 2 and 3 reporting and details on
the company’s approach to nature-based
solutions (NBS) and carbon capture andstorage (CCS). We cautiously look forward toa more constructive discussion with the oil
giant.

10

Case Study – Ecopetrol
Engager:

Responsible
Investment Research

Asset Class: Fixed Income,Multi-Asset

As co-lead investor within CA100+,
we have been engaging with
Ecopetrol, a Colombian state-owned
oil and gas integrated company,
since 2019. After a slow start, therelationship became one of trust, of
straightforward discussions, and of
progress.
Initially, as for most of its nationaloil company peers, Ecopetrol had
limited goals and poor reporting on
climate related issues. Over the past
four years, we met nine times with thecompany which progressively upped
its game, first reporting under the Task
Force on Climate-related Financial
Disclosures (TCFD) framework,
then setting a long-term net zeroambition for its own emissions andintermediary targets. This occurred
while it faced specific challenges
linked to the differentiated pace of theenergy transition for Colombia andits status as a state-owned company,
especially following the 2022 politicalelections. In 2023, we held threemeetings with Ecopetrol, bothindividual and collaborative.
An individual meeting held in 2023

Engagement Progress
was a reactive one, upon the requestof Ecopetrol’s decarbonization
manager , asking for AXA IM’s input
on the company’s scope 3 targets.
During this meeting, we madeseveral recommendations as partof the company’s fine-tuning of its
climate strategy. We communicatedclear expectations related to settingintermediary targets on a 10-to-12year horizon, with both intensity andabsolute metrics, which should beframed into a broader energy transition
narrative.
We also proactively met twice during
the year as part of the CA100+ coalition
during which we discussed details on
decarbonisation capital expenditure,
scope 1 and 2 actions and targets, andscenario analysis. We were pleased tosee the company’s progress in termsof scope 3 mapping, but also its newmethane targets and ambition to be at
net zero methane by 2030.
Overall, Ecopetrol has significantly
progressed in its policies and actions injust a few years, and we look forward
to further improvements. We willcontinue engaging the company in2024, focusing on setting robust scope
3 emissions measurement and targets
as well as monitoring its new methane
emissions policy.

Climate Action 100+ is an investor-led initiative that seeks to ensure the largest corporate greenhouse gas emitters take necessary action on climatechangeAXA IM Stewardship Report 2023 13

Engagement, collaboration and escalation

Climate change▶▶▶
Engagement status

Case Study – Martin Marietta
Participant: Corporate GovernanceResearch
Asset Class: Multi-Asset, Fixed
Income, Equity

long-term net zero ambition, formalisea business-wide climate strategy, and to
submit its targets to the Science Based
Targets initiative (SBTi).

Martin Marietta is a US building materials
company, producing mostly aggregates,and owns two cement plants in Texas. We
initiated a dedicated engagement withthe firm in 2022 to push it to enhance its
climate ambition, observing it was lagging
versus a number of peers. We specificallyrequested for the company to set a

In late 2022 and early 2023, we held
two meetings with the company, eachtime with the entire C-suite, including
the Chairman and Chief Executive.
In our 2023 meeting, we discussed
the upcoming publication of Martin
Marietta’s Sustainability Report andrecommended an SBTi certification
now the methodology for cement had
become available. We also discussed
climate governance and the Board’s

Success

environmental expertise. Following the
publication of the new Sustainability
Report, we were pleased to see significant
improvements in Martin Marietta’s
climate strategy, notably setting a net zero
scope 1 ambition for its entire operation,enhanced intermediary targets, andimproved TCFD disclosure. The company
also announced its commitment to seekan SBTi certification.
Given the evolution of Martin Marietta’s
strategy, we deem this engagement a
success. We will continue to monitor the
implementation of their newly announced
strategy.

Engagement status

Engagement Fails

Case Study – Chevron
Engager:

Responsible Investment
Research

Asset Class: Fixed Income,Multi-Asset, Equity

Chevron – an American multinationalenergy corporation headquartered in
California – is one of the world’s largest
oil and gas integrated companies. In ourview, the company appears reluctant tocommit to net zero for its downstream
activities, and demonstrates a lackof ambition in its intensity emission
reduction targets for energy sales,
which we think sets it behind its main
peers.
As we consider these ambitions
to be insufficient, and considering
the company’s business, Chevron
was included in our priority list forengagement on climate issues.

14 AXA IM Stewardship Report 2023

Discussions have taken place with thecompany’s sustainability teams since2022, and notable progress has occurred(including the publication, at the end of
October, of a methane report). However,
we believe that Chevron’s evolution inits climate strategy does not match thepace of the climate urgency.
Therefore, to push Chevron to further
enhance its energy transition ambition,
we have used multiple escalation
techniques since 2022, including:• Voting against the re-election of
Sustainability Committee members andsupporting a climate-related resolution
filed by non-governmental organisation
Follow This at the 2022 AGM• Co-filing a Follow This climate-related
resolution ahead of the 2023 AGM• Publicly pre-disclosing our decision tovote against several resolutions at the2023 AGM

We also continued privately engaging with
Chevron and had one meeting in autumn
2023, reiterating our initial requests
that the company should have stronger
goals for its own emissions and for theemission intensity of its sales. Despite
that, we understood that no change
in the company’s climate strategy wasconsidered, and despite our repeatedrequests, the company will not upgrade
its scope 1 and 2 ambition.
Therefore, we will re-consider in 2024
the relevance of continuing engagement
given the likelihood of success andmay consider more drastic steps in ourescalation strategy.

Our approach to climate laggards: the ‘Three Strikes and You’re Out’ Policy
In 2023, we continued to pursue our climate laggards engagement
initiative that we announced in 2021 and initiated in 2022. We
held at least one meeting with each of the companies identified
as laggards, including the one that had not responded in 2022.
Overall, we were pleased to see progress on many fronts: twocompanies set new formal net zero ambitions; many improved theirtargets, policies, and reporting; and banks are gradually rolling out
dedicated policies for the most material sectors. There is still more
to be done but the momentum is positive. However, one company
is not progressing at all, falling further behind its peers.

We reviewed the list at the end of 2023 and concluded that
two companies no longer fit the laggard definition after having
significantly enhanced their strategies and met our engagement
objectives. As such, the list will evolve in 2024 with new companies,
which have fallen behind their peers since the launch of our ‘Three
Strikes and You’re Out’ policy, entering the list.
The 2024 reporting and Annual General Meeting (AGM) season
will be another opportunity to engage, update our analyses andpotentially escalate.

How we applied our ‘Three Strikes’ policy in 2023 (anonymised examples):SectorGeography

Nature of Issues

Engagement Requirements

Engagement
Activity

Agri-foodUS• The company already has
committed to SBTi and set a
specific target for its scope 3
emissions• However, there is nolong-term ambition andintermediary targets (2025)
are weak• The company consumes large
quantities of thermal coal in a
specific industrial process• Set a long-term net zeroambition• Set more ambitious scope 1
and 2 targets• Exit coal as a fuel• One meeting heldwith the Head of
Sustainability in
2022 and anotherin 2023• Between our two meetings, thecompany announced a long-term net
zero aspiration• In the second meeting we felt thecompany was more open on the
different options – all rather longdated – regarding exiting coal than it
had been during our first meeting

BankingJapan• Sizeable exposure tocontroversial sectors• Exclusion policies lagging
versus global peers• Net Zero Banking Alliancesignatory, but does not yet
disclose financed emissions
and has not set intermediatetargets for publication ofscope 3 financed emissions• Disclose scope 3 financed
emissions and set intermediate
reduction targets• Strengthen coal exclusion
policies and extend coal exit
targets to mining• Set up exclusion policies in
the field of unconventional orcontroversial energy sectors• Articulate long-term
commitments with clear
policies in place• Three meetings
held in 2022,
including one
with the Chief
Financial Officer
and an in-person
meeting with theChief Executive
in our Paris
office; anothermeeting was heldin 2023 with thesustainability team• The company started relatively late
in integrating climate change into its
strategy. Last year, we noted that itwas now doing so in a very disciplined
and rigorous manner, with more
improvements expected to come inthe coming years.
This was confirmed in 2023 as thebank improved its reporting anddisclosure, confirmed that three new
sectorial policies would be announced
in the near future, and integrated nonfinancial elements in management’s
long-term compensation

Information
technology

US• No targets beyond 2025

• Formalise a climate strategy,
with a long-term net zeroambition and intermediarytargets on a five-to-10-year
horizon• Accelerate further inrenewable electricity and set
time-bound targets on theshare of overall electricity
consumption• Delineate more precisely apolicy and targets to reduce
emissions of special gases
such as perfluorochemicals
and nitrogen trifluoride• Seek a SBTi validation• One meeting heldwith the investor
relations teamin 2022, and two
meetings in 2023,
including one witha senior counsel tothe Board• Initially, our requests remained largely
unanswered. The discussions wereconstructive and the answers precise,but the company was only focusing
on its 2025 targets• In our most recent meeting with thecompany in December 2023, it said
a new plan was in progress and thatseveral of our requests – namely a net
zero ambition, new targets and SBTi –were all being considered• We will monitor future developments
to ensure this translates into effective
public commitments and continue toengageIntermediary Conclusions

AXA IM Stewardship Report 2023 15

Engagement, collaboration and escalation

Climate change▶▶▶
Engagement status

Case Study – TotalEnergies

Just Transition
We continued to work with the Institut
de la Finance Durable, formerly known
as Finance for Tomorrow, on the ‘justtransition’ theme. AXA IM is the lead
investor of the energy sector investor
working group and member of the
agriculture and food sector working
groups. The objective of this initiative
is to ensure the social implications of atransition to a low-carbon economy are
sufficiently anticipated by companies.
This requires different approaches fordifferent sectors, the energy sector being
one of the most at stake. In line with
the International Labour Organization’s
definition, the transition would seek
to leave no-one behind and ensure theconsequences of associated changes are
fairly distributed.
Moving to low-carbon energy, buildings,
transportation and industrial production
will bring dramatic adjustments andchallenges to countries and industries– and therefore to workers and theircommunities. A failure to anticipate thesocial implications of these challenges
could stall climate progress and contributeto political instability because of increasing
inequality. This would risk disrupting thefragile equilibrium between developing
and developed economies.
At AXA IM, we increasingly tackle the justtransition theme in our dialogue withcompanies. It is a risk factor which needs
to be closely monitored – as risks include
social unrest, strikes, supply chainsdisruptions, and decline in employee
engagement. Although we acknowledge
the lower level of maturity on this issue, we
encourage companies particularly exposed
to such risk to consider the notion of ajust transition in their climate strategy, as
formalised in the 2024 expectations of our
Corporate Governance & Voting Policy. We
also systematically supported shareholder
proposals linked to the just transition thatwere submitted in 2023 at the AGMs ofseveral US companies.

11

Energy for a just transition collaboration, BSR

16 AXA IM Stewardship Report 2023

Engager:

Responsible Investment
Research

Asset Class: Fixed Income, MultiAsset, Structured Assets,
EquityBuilding on our previous dialogue
with the company on climate andgovernance issues, we started toengage TotalEnergies in 2022 on the
topic of the just transition, reflecting
our position as lead investor of theenergy sector working group of theJust Transition initiative. We had
several meetings with the company’s
investor relations team, with a primary
goal of raising the company’s level ofawareness on this issue and detailingthe objective and expectations of theJust Transition investor initiative.
We also recommended the company
elaborate on its own definition of thejust transition; commit to identifying
all stakeholders negatively impacted
by the energy transition; and deliver a

Engagement Progressdetailed action plan to alleviate suchimpacts.
We were pleased to see increasedtransparency as in 2023, it dedicatedfor the first time a specific section of its
annual Climate Progress Report to its
just transition ambition.
We continued engagements anddialogues in 2023 via individual
meetings dedicated to climaterelated issues and by attending
working groups. One example was
our participation in the collaborative
initiative for a just transition by
the energy sector coordinated bysustainability consultancy BSR11. It
was an opportunity to present ourviews and discuss directly with thepeople responsible for just transition
strategies in each energy company via
small working groups.
We will continue to engage thecompany on this issue with a focus ontransparency and reporting of specificjust transition data.

Outlook for 2024
Our focus in 2024 will remain on
the systemic nature of the energy
transition. We are more convinced
than before that all companies – andall stakeholders – have a role to playfor the transition to move forward.
The recurring debate on valuechains – i.e., scope 3 emissions – isa testimony to this. We will hence
engage with companies acrosssectors to better understand andassess individual decarbonisation
strategies and how they interconnect
with those from their suppliers andcustomers.

We will nonetheless continue to havetargeted engagements with companies
from the most material sectors in termsof emissions, whether though individual
engagements or through a collective
approach. In the same logic, we will
actively pursue our Climate Laggards
engagements.
In our engagements as in our research
efforts, we will continue to explore thepractical levers making the transition
possible, from well establishedtechnologies to nascent solutions andfrom policy needs to behavioural changes.

AXA IM Stewardship Report 2023 17

Engagement, collaboration and escalation

Engagement themes
Biodiversity collapse▶▶▶

Mariana Villanueva,
Responsible Investment Analyst

At AXA IM, we remain committed tobiodiversity protection. Human life andeconomic prosperity are dependent on thebenefits provided by nature. Biodiversity
loss puts ecosystems upon which societies
depend at risk; in addition, it also threatens
economic loss. We believe investors
must integrate nature and biodiversity
considerations into their research,engagement, and investment processes.

The engagement context
The year following the 2022 adoption of the
Global Biodiversity Framework, a landmark
agreement to halt and reverse nature loss by
2030, saw several important developments
which will no doubt contribute to shaping
private sector action to come.
Two key international standards were
issued in 2023. The Science Based Targets
Network (SBTN) released beta targetsetting guidance which companies began
pilot testing. In addition, the Taskforce

on Nature-related Financial Disclosures(TNFD) published a highly anticipatedframework outlining a set of disclosure
recommendations and guidance forassessing, reporting and acting on naturerelated dependencies, impacts, risks andopportunities. These help to illustrate that
we are in a period of foundation setting aswell as knowledge and capacity building.
The landscape of biodiversity integration
is an evolving one, and both companies
and investors are still at the early stages.
New data, metrics, and methodologies
are currently being tested and developedby various market actors. While somecompanies have begun working on
this complex and relatively new topic,
the responses to the 2023 CDP Climate
Questionnaire’s biodiversity section
highlight that biodiversity integration– particularly assessments and indicators –are still at their nascency, although many arewilling to consider advancing on this topic.
To help galvanise greater momentum
among corporates, Nature Action 100(NA100) was officially launched in
September 2023. AXA IM was part of theLaunching Investor Group and we area member of the Steering Group. This
global investor initiative seeks to engage
companies in key sectors deemed to besystemically important in reversing natureand biodiversity loss by 2030.

2023 Engagement activities mapped to biodiversity pressures13
Pressure

Share of Total Engagements

Land Use Change

61%

GHG Emissions

9%

Pollution

48%

Over exploitation of Natural Resources

3%

Invasive Species

0%

12
13

Top 10 biodiversity ranking of company industries, Finance for Biodiversity
The total amount is not equal to 100% as a single engagement can target several biodiversity pressures.

18 AXA IM Stewardship Report 2023

Our engagement goals andactivity  

Our engagement approach to thecomplex and nascent theme of
biodiversity has been to start aligning
our greatest efforts in such a way thatincorporates the knowledge established
but also emerging on negative impacts
and the sectors which matter most forbiodiversity and nature. In 2023, ourgreatest efforts focused on companies
implicated in the agrifood value chain –predominantly the food products sector
but also consumer staples distribution
and retail – as well as the chemicalindustry. The food and chemical industry
figure among the top three industries
with the highest potential negative
biodiversity impact according to a recent
multi-tool study12.
Our primary engagement activities
encompassed a programme webegan piloting in 2022 by using a
biodiversity footprint tool developedby our partner Iceberg Data Lab (IDL),
as well as engagement programmes
targeting specific themes, namely
deforestation and pollution. As a resultof the programmes and profiles ofcompanies we engaged, over half of theengagements we carried out touched
upon biodiversity pressures related toland use change which includes thetheme of deforestation.

Engagement status
Engagement programme driven by
biodiversity footprint data
Engagements underpinned by abiodiversity footprint represented a thirdof our activities. We used this innovativeand still evolving biodiversity-specific datato help us select and prioritise sectors andcompanies which present a significant
biodiversity footprint, and to help informour dialogues by considering a company’s
main pressures on biodiversity illustrated
by its biodiversity footprint. We describe
this metric and its limitations in our TCFD Article 29 Report.
Given the state of market maturity
described above, the aim of theseengagements has principally been toaccompany issuers as they seek todevelop robust and effective biodiversity
approaches. These are opportunities
to share industry best practices withcompanies as they set up action plans,
and to ensure that these are coherent
with available knowledge on impacts,
including biodiversity footprint reduction,and dependencies. The ultimate goal is forcompanies to develop a comprehensive
biodiversity strategy which effectively
mitigates biodiversity risks – including fromupstream and downstream activities – andsupports a ‘nature-positive’ transformation,
as well as to improve disclosure. An
example of one such engagement isprovided here.

Case Study – Carrefour
Engager:

Responsible
Investment Research

Asset Class: Fixed Income,Multi-Asset, Equity

We started engaging with French
retail distribution group Carrefour
in 2022 as part of our biodiversity
footprint-guided engagement
programme. Carrefour is in a sector
identified as having potentiallysignificant impacts on biodiversity
and the company was specifically
identified as a key issuer contributing
to the biodiversity footprint of
the fixed income fund that wasassessed. Our engagement objective
is for Carrefour to develop a robust
approach to biodiversity.
Carrefour has begun working on
defining a biodiversity strategy
following a pilot to assess its negative
impacts and dependencies. This
exercise served to confirm therelevance of certain focus areas andshed light on a few new subjects.
Carrefour is now using theseresults to assess possible measures

Company responds

to be taken by country and by
biodiversity pressure. Based on the
results of Carrefour’s biodiversity
footprint provided by IDL, a focus
of our discussions in 2023 was how
Carrefour addresses its raw materials
supply chain – namely pressures fromupstream land use – and engages
suppliers. Carrefour has several
initiatives in place on themes like
agriculture, fisheries, waste andplastics. To halt biodiversity loss,
it will need to effectively deliveron its 2026 zero deforestationcommitment where traceability is a
key challenge. We will continue tohold discussions with Carrefour on
progress in its biodiversity strategy
and deforestation commitment.
We aim to provide investor feedback
to companies like Carrefour thatare in the process of assessing
their impacts and dependencies onnature, with the aim of developing ameaningful and robust biodiversity
strategy. In this way, we canaccompany companies on thisjourney aiming to ensure theirapproaches remain consistent withfindings on the way that they interact
with nature.

AXA IM Stewardship Report 2023 19

Engagement, collaboration and escalation

Engagement themes
Biodiversity collapse▶▶▶
Engagement status

Case Study – Food company

Engagement on deforestation

As an extension of our Ecosystem
Protection and Deforestation
policy14, we continued our existingengagement activities with a selectionof companies involved in the supply
chain of agriculture and/or forestry
products, more specifically the value
chain of key raw materials associatedwith deforestation and ecosystem
conversion (soy, palm oil, cattle, andtimber). We focused on those with amaterial impact on deforestation andnatural ecosystems conversion, andthose we view as needing to makegreater progress in managing existingrisks and impacts. We published an
update of this policy in 2023 to include
details on our engagement approach
including our process and general
expectations.
2023 saw some adequate progressin our dialogues, while a few
engagements moved to an escalation
phase over the year. We used voting
and collaboration to signal the needfor more advancement and enhanced
dialogue. An example of an escalation
is provided here.
In addition, the high level of animal
waste produced by industrial farming
annually can lead to nutrient and waterpollution, posing significant risks toecosystems. In response, the FAIRR
initiative on Waste & Pollution aims todrive pork and poultry producers to
conduct meaningful risk assessments
around animal waste and put inplace action plans to reduce theircorresponding impact on biodiversity.
We participated in several company
engagements in 2023.

14

AXA IM Ecosystem Protection & Deforestation policy

20 AXA IM Stewardship Report 2023

Engager:

Responsible Investment
Research

We first reached out to a Brazilian
food processing company in 2022 tostart engaging on deforestation. We
did not receive any response to our
repeated attempts to start a dialogue,
so escalated via voting against there-election of the company’s Boardof Directors at its 2023 AGM. We
communicated our voting decision to
the company and its relation to our
engagement on deforestation.
This led to our first dialogue in mid-2023,
where we conducted a deep dive into its
approach to eliminating deforestation.

Engagement Progress

We discussed the company’s strategy
and the feasibility of achieving zerodeforestation and conversion in the
Amazon by 2025 and the Cerrado region
by 2030.
We found the response to theengagement to be adequate as targets
appeared feasible, thanks to progresseson traceability and feasibility to achievetargets and the creation of protocols
for tracking and identifying suppliers
breaching their policies, and there
was potential for accelerated efforts
in the Cerrado region which was later
confirmed by a public announcement.
The engagement progressed to a moreconstructive phase.

Engagement status

Case Study – Cranswick
Engager:

Responsible Investment
Research

Asset Class: Equity

As part of the FAIRR collaborative
engagement on Waste & Pollution, we
met with Cranswick, a UK pork andpoultry producer. This was our first
dialogue with the company, where we
asked Cranswick to detail its approachto assessing biodiversity risks stemmingfrom nutrient pollution as well as theactions it has in place to mitigate theserisks and improve circularity.
While Cranswick undertakes a range ofenvironmental risk assessments, thedialogue revealed that water quality
risks may be viewed as separate frombiodiversity risk and treated as a

Company responds
regulatory compliance issue. This issimilar to the approach we have foundfrom some other companies engaged
with through FAIRR on this subject,suggesting that even for issuers with adirect operational impact on biodiversity,
this is still a relatively new topic that is
not yet addressed holistically. Cranswick
did, however, share that it considers
some activities to have been associatedwith biodiversity net gains and is
exploring ways to de-risk its manure in
relation to carbon reduction targets. We
will continue engaging with Cranswick
through FAIRR, encouraging the company
to improve risk assessments for water
quality and biodiversity, disclose theresults including the impacts of nutrient
pollution, and better detail mitigating
actions systematically undertaken at the
livestock farm level.

Engagement status

Case Study – BASF

Engaging collaboratively on pollution
We joined two collaborative engagement
programmes related to pollution in 2022,
the Investor Initiative on Hazardous
Chemicals (IIHC) and the FAIRR initiativeon Waste & Pollution and started
engaging with companies in 2023.
Examples of these engagements areprovided in this section.
The IIHC initiative addresses pollution
and health issues related to the
production and use of hazardous
substances by investee companies. The
IIHC engages a number of the world’s
largest chemical companies, advocating
for them to increase transparency on
their exposure to hazardous chemicals;
to phase out hazardous chemicals
particularly persistent chemicals;
and to develop safer alternatives. We
are a member of several company
engagements, including as co-lead.

Engager:

Responsible Investment
Research

Asset Class: Multi-Asset, Fixed
Income, Structured
Asset, Equity
We co-led a collaborative engagement
through the IIHC with German
chemical producer BASF, which
has a particularly large portfolio of
hazardous substances as reported by
the NGO, ChemSec, and is exposedto persistent chemicals like per – andpolyfluorinated substances (PFAS).
The investor group sought for BASF
to increase transparency, phase out
persistent chemicals, and develop
safer alternatives, in line with the
IIHC’s three asks.
We held our first dialogue with thecompany in 2023 after co-signing a
letter in 2022 introducing the initiativeand summarising the IIHC’s position.
We discussed BASF’s current approachto phase-out, notably through its

Company responds
new Triple S approach. BASF has
existing initiatives to measure healthand environmental impacts linked
to its products via lifecycle analysis,
and hazardous characteristics are
considered under products labelled
as ‘challenged’ which it is aiming
to phase-out. Like other chemicalcompanies BASF adopts a risk-based
approach focused on applications andnot a pure hazard-based approach. At
present BASF does not have a strategy
to phase out persistent chemicals,
which remains a material topic for thecompany. We also discussed the needto enhance transparency, conveying
specific recommendations fordisclosure that would be most usefulfor investors, for BASF’s consideration.
We will continue to engage with
BASF through the IIHC on phase-out
measures and enhanced transparency,
in light of growing investor concerns
around persistent chemicals and the
evolving regulatory landscape.

Outlook for 2024
Our engagement approach remains
unchanged. We will continue
incorporating available biodiversityspecific data to help prioritise and inform
our engagement activities and expect ourefforts to be further guided by the TNFD
pilot we are carrying out on the agrifood
and auto sectors.
Deforestation remains a priority. We
will continue encouraging issuers tostrengthen deforestation and conversionfree commitments and disclosure to trackprogress. For issuers that have reinforced
their commitments, the focus will be on
concrete actions and implementation

mechanisms to deliver on objectives.
We expect recent developments such as
the EU deforestation regulation and theprogressive adoption of SBTi forest, land
and agriculture guidance to contribute toprogress.
We remain committed to carrying out
collaborative engagements on pollution
through the IIHC and FAIRR and expect
collaborative engagement activities
to intensify with our participation in
NA100 during 2024. We hope to increase
our nature-related engagements withemerging market issuers through ourparticipation in the Emerging Markets

Investors Alliance working group on
consumer staples.
We will continue our active participation
within the Finance for Biodiversity (FfB)
Foundation under the pledge we signed
in 2021 as well as in other biodiversityfocused initiatives to support work
related to the development of strategies,
transparency standards, and practices
around the protection of biodiversity. In
2024, the work around target setting is
expected to advance with the roll out of
SBTN for corporates and further guidancefrom the FfB for financial institutions.

AXA IM Stewardship Report 2023 21

Engagement, collaboration and escalation

Engagement themes
Responsible Technology▶▶▶

Théo Kotula
AXA IM Responsible Investment Analyst

Personal data collection has helped
fuel the rapid growth of internet-based
technology companies. Firms that
rely on the handling and processing of
personal data are under intense scrutiny
from customers and regulators. At thesame time, artificial intelligence (AI) has
drastically transformed the businessenvironment. As AI’s use in business
continues to grow, responsible AI practices
will be paramount to maintaining thisgrowth and contending with its potential
ethical and socio-technical repercussions.
We have also witnessed growing
concerns around technology companies’
potentially negative human rights andsocietal impacts, as well as aroundsociety’s trust in them – which is key forsustainable, long-term value creation.

15

Trust in technology companies is also atrisk regarding the potential detrimental
impacts their products and services canhave on end-users’ mental health andwellbeing. As a global asset manager withextensive investments in the technology
sector, we believe we have a role to playin encouraging responsible technology
practices and helping protect clients fromassociated investment risks.
Our research found that companies
collecting personal data and developing
AI systems are exposed to human rights,
regulatory, operational and reputationalrisks, and that a fine line separates successfrom failure in terms of responsible
technology policies and practices. This work
framed our 2023 engagement discussions
with firms exposed to such risks.

Our engagement goals and activity
In 2023, we engaged with companies
exposed to responsible technology issues
to examine how their ways of working
compare to the good practices we
identified around:• Transparency on data privacy policies
and practices• Disclosure around responsible AI andalignment with best practice• Human rights policies and inclusion inbusiness practices• Mental health and wellbeing risk
mitigation• Oversight of these issues at board level
Tech companies do acknowledge data
privacy, responsible AI and human rights
are material risks for their business models– but we felt, based on our experience ofengagement, that most firms were perhaps
not willing to make the necessary changes tofully mitigate these risks. Therefore, we are
expanding and enriching our engagement
discussions with tech companies throughcollaboration with other investors andorganisations as we believe it makes ourmessage stronger and helps us to achieve
our engagement objectives. As part of that,
we continued our active participation inthe, Tech giants and human rights: Investor
expectations’ collaborative initiative.15 We
also continued our active participation in
the ICT (information and communication
technology) and Human Rights working
group of the Investor Alliance for Human
Rights in 2023.

The Council on Ethics of the Swedish National AP-funds signals its expectations for tech giants on human rights, Fjärde AP-fonden, December 2020

22 AXA IM Stewardship Report 2023

Engagement status
In 2023, AXA IM also co-founded– together with Sycomore AssetManagement – an investor coalition
to address and engage with mental
health and wellbeing risks related
to technology companies' products
and services. It currently gathers
31 global institutional investors
representing US$2.5bn in assets undermanagement. Our main objective is
to push technology firms to define
robust policies and implement
concrete measures to mitigate risksof addiction and potential adverse
effects on end-consumers’ mental
health and wellbeing. Through thisinitiative, we expanded the scope andsectors of companies we engaged with.
We notably acted as a lead investor to
engage with videogames firms, andinitiated discussions on mental health,addiction and wellbeing risks with
Nintendo for example.
We also continued voting escalation
tactics in our engagement and co-filed
two shareholder resolutions at the2023 AGM of two different companies(Meta Platforms and Alphabet) to show
our disappointment regarding thelack of progress in our engagements.
We made one proposal asking for an
independent human rights impact
assessment, and another requesting
more quantitative and qualitative
information on algorithmic systems.

Next steps

In 2024, we will continue engaging
with tech companies on responsible
technology and carry on withescalation tactics – through voting
notably – if we feel there is a needto do so. We will also continue thecollaboration with other investors tomake our messages stronger.

Case Study – Alphabet

Escalation

Responsible Investment
Researchrights and privacy issues notably – in its
new executive bonus programme.

Asset Class: Equity, Fixed Income,Multi-Asset, Alternative
CreditWhile these are effective oversightmeasures, Alphabet remains under highscrutiny on human rights and privacy
issues. Regulatory and reputationalrisks are increasing, especially with thegrowing adoption of AI systems that
may increase privacy violations anddiscrimination risks.

Engager:Given the influence Alphabet – holding
company of Google – has on society, we
have been engaging with the company
on responsible technology issues since2019, with a specific focus on:• Board oversight of data privacy andhuman rights• The implementation of best-in-classprivacy policies and practices• Integration of relevant human rights
and privacy-related indicators inexecutive pay
As part of this engagement, in 2019 we
co-signed a letter to the Board Chairrequesting a meeting to discuss the
management of human rights issues
and the implementation of the UN
Guiding Principles on Business andHuman Rights across the company’s
operations and value chain. In theabsence of a satisfactory response,
we decided to co-file a shareholder
resolution at Alphabet’s 2020 general
meeting requesting the company
to establish a Human Rights Risk
Oversight Committee of the Board of
Directors.
Since then, we have continued toregularly meet with the company
to discuss human rights issues. As
part of the Global Network Initiative,
Alphabet’s human rights and privacy
risk assessments are reviewed by an
external third party, and the board
and audit committee are frequently
updated by the chief privacy officer
and the privacy counsel. Moreover, thecompany decided in 2022 to integrate
ESG objectives – encompassing humanWe therefore decided to co-fileanother shareholder proposal at
Alphabet’s 2023 AGM, asking thecompany to provide more quantitativeand qualitative information on its
algorithmic systems. We also publicly
disclosed our voting intentions
beforehand in support of other
responsible tech-related proposals
as well as the ‘one share one vote’
proposal, to maximise the impactof our votes on future resolutions
and promote enhanced board
accountability.
Moreover, to maximise the chances ofengagement success, we decided in
2023 to start engaging collaboratively
through our support investor role
within the Big Tech and Human Rights
initiative. We wrote to Alphabet
detailing our expectations for it totake concrete measures to addresshuman rights risks pertaining to its
products and business model and to
related impacts and efforts. We focusedon human rights key performanceindicators (KPIs) related to:• Culture and business model• Content• Vulnerable groups• Access to remedy• Stakeholder engagement
We will start discussions with thecompany based on this letter over thecourse of 2024.

AXA IM Stewardship Report 2023 23

Engagement, collaboration and escalation

Engagement themes
Social▶▶▶

Matthieu Firmian,
AXA IM ESG Analyst

We believe it is key to consider the ‘S’ in
ESG investing, to ensure companies act
responsibly as employers, suppliers ofgoods and services and as stakeholders
in society. Our view is that companies
failing to adequately do so are likely toface higher risks in terms of productivity,
litigation (with heightened regulatory
risks due to upcoming new regulationsin Germany, US, and the EU16), andreputation – which could ultimately
affect financial performance andinvestment returns.
Moreover, in line with a double
materiality lens to ESG, social topics are
the most represented among the United
Nations Sustainable Development Goals.
People and respect for human rights areat the heart of sustainable development.
The broad definition of human rights
encompasses many sub-themes,
including modern slavery, living wages,
gender equality, freedom of association,
as well as health and safety. Theserisks cannot all be handled in the sameway, but all require a deep dive into
corporates’ policies and actions. Ongoing
dialogue with companies therefore
remains crucial, to go beyond public
communications and better understandand reduce controversy-related risks forcompanies.
We must acknowledge the complexityof the issues at stake, depending on the
sectors, markets, or national regulations
involved. We believe it is more effective

to concentrate our efforts on a few
sectors or countries where risks are
the most material. This can range fromhealth and local communities’ rights inthe energy sector to working conditions
and labour rights in the textile and agrifood sectors.
Furthermore, we started to engage
in 2023 via the stewardship initiative‘Advance’ – launched by the Principles
for Responsible Investment at the end of2022, aimed at acting on human rights
and social issues with a specific focus
on metals and mining and renewablesectors.17

Outlook for 2024

18

The integration of social considerations
is bound to keep growing as a transversal
theme, reflecting regulatory pressure suchas the CSRD implementation in Europe aswell as the development of due diligence
regulations across regions. Both willcontribute in our view to a gradual shift
from a purely net zero focus to a more
holistic perspective, aimed at ensuringthat transition efforts are not made at the
detriment of the planet and of people.
Scrutiny on workers’ rights will span all
sectors, particularly in those most affectedby a profound change of skills, such as
automotive where we are seeing a shift toelectric vehicles. It has already triggered
costly strikes in this sector especially in theUS, illustrating the need to also involve
public stakeholders on broader issues
such as reskilling or training. Living wages,
working conditions, unionisation andsocial dialogue are structural issues thathave been to some extent overshadowedby climate concerns until recently – butinvestors are starting to consider thesemore seriously, as echoed by a growing
number of shareholder resolutions
at company annual meetings. Those
resolutions do not yet tackle to a large

extent the ‘just transition’ theme, but
no doubt we will see more of this in due
course.
We believe this means an increased
need for qualitative assessment of themateriality of risks, in terms of economic
activities and geographies. Data providers
assessing compliance with international
norms and standards can help investors
to screen exposures and exclude obvious
infringers in the field of human rights.
However, data does not provide a
qualitative review of controversies andof what is at stake. Ultimately, investors
will have to take their own view aroundthe severity of the cases, the red lines
they have and ultimately, the need to
exclude or engage. We urge companies todemonstrate concrete evidence of how
they address these topics, beyond merely
stating they have codes of conduct orgrievance mechanisms and instead showwhat they are doing on the ground toprevent, alleviate and remedy those risks.
Technology giants will not be immune andwill be facing increasing scrutiny into theirpractises as artificial intelligence further
develops.

German law on due diligence adopted in 2022, Uyghur Forced Labour Prevention Act (UFLPA) introduced in the US in 2022, which prohibits the import ofproducts from Xinjiang and its affiliates linked to forced labour, and upcoming Corporate Sustainability Due Diligence Directive (yet to be adopted as ofFebruary 2024) and directive on the import of products alleged to have benefited from forced labour in the EU
17
Advance: A stewardship initiative for human rights and social issues - Investor statement, PRI, May 2022
18
Sustainability in 2024: From net zero to a more holistic approach, AXA IM, February 2024
16

24 AXA IM Stewardship Report 2023

Human Capital Management, Freedom of Association

Case Study – Tesla
Engager:

Responsible Investment ResearchParticipant: Corporate Governance Research
Asset Class: Equity, Fixed Income, Multi-Asset,
Structured Asset
We started engaging Tesla in 2022 based onallegations of racial discrimination and a poor
inclusive culture. This followed our support fora shareholder resolution filed at the 2022 AGM
requesting the company to report on efforts toprevent harassment and discrimination in theworkplace.
After several meetings with the company in 2022
and 2023 where we clarified our expectationsin terms of diversity, equity and inclusion (DEI)
reporting and practices, we note improved
disclosure in its new impact report. For example,

Forced Labour, Child Labour

Case Study – Stellantis
Engager:

Responsible Investment Research

Asset Class: Equity, Fixed Income, Multi-Asset,
Structured Asset

We co-led an engagement with automotive company
Stellantis in 2023, as part of an initiative led by the
French Sustainable Investment Forum (FIR) andnon-governmental organisation Human Resources
Without Borders. The initiative aims to reduce therisk of child labour and forced labour in supply chainsin French companies by implementing robust humanrights policies. Considering the increased level ofrisk stemming from the complex supply chains of theautomotive sector, Stellantis was selected among thepriority companies to engage with.

Engagement status

Company responds
Tesla now discloses the breakdown of the typeof complaints filed in its grievance mechanism
called ‘Integrity Line’ and stepped up its workplace
trainings. The company also confirmed that new
data will be included in the next impact report,
which we will carefully monitor upon publicationin 2024. However, given the persistence of humancapital controversies, we decided to oppose there-election of the CEO at the company’s 2023 AGM
over concerns around governance and corporate
culture.
Last year, we also started to discuss with Tesla
ongoing allegations of anti-union practices in
the context of massive strikes in the US in theautomotive sector and the role of the main United
Auto Workers union.
We will continue the dialogue with the company on
this topic in 2024.

Engagement status

Company responds
We held two meetings with the company in 2023.
The first was to introduce the coalition’s goals andbetter understand how Stellantis governs humanrights-related risks. The second meeting, held with
the Head of Corporate Social Responsibility, wasan opportunity for the company to explain in moredetail how it tackles forced labour and child labourrelated risks.
We co-designed an analysis grid with Human
Resources Without Borders to assess companies’
level of maturity regarding child and forced labourrisks. On this basis, dialogue with Stellantis willcontinue in 2024 to help the company improve its
practices and policies to reduce the risks of modern
slavery in its supply chains.

AXA IM Stewardship Report 2023 25

Engagement, collaboration and escalation

Engagement themes
Social▶▶▶
Engagement status

Gender diversity
We believe gender diversity is a key factor
in achieving and maintaining a healthy andefficient working environment. We believe
it can boost the emergence of talent, thegeneration of innovative ideas and businessperformance overall.19
Therefore, we continued last year toreinforce our engagement activities
around gender diversity, particularly
via our participation in the 30% ClubFrance Investor Group (which AXA IM
co-founded in 2020), encouraging
large French companies to commit topromoting gender diversity at a senior
management level. We also continued
our gender diversity-related engagement
efforts in Japan, focusing on board-level
gender diversity which continues tofall behind that seen in other markets(including elsewhere in Asia), building on
the positive momentum resulting fromhard and soft law evolution in Japanese
corporate governance.

Company responds

Case Study – Vivendi
Engager:

Responsible Investment
Research

We started engaging French media
holding group Vivendi in 2021 as lead
investor of the 30% Club. Since then,the company has developed stronger
disclosures on gender diversity and has
put in place new actions to advancetowards gender equality goals overtime (including by adding two new key
performance indicators linked to theshare of women in new recruitments andin internal promotion). However, since2022 our dialogue has been focused onharassment claims which occurred at
one of the company’s entities, Havas.

Last year, we sought to understand theremediation measures taken by thecompany following the allegations,in particular the changes made to its
internal control mechanisms to better
detect and prevent potential harassment
cases. Vivendi presented actions it has
taken both at Havas (including a renewed
training programme) and at group level.
We also touched upon broader gender
diversity-related themes, including
measures taken to address the gender
pay gap, shared best practices ontaking action on gender diversity, andencouraged the company to continue its
work on developing a pipeline of female
talent.

Public HealthIn line with our commitment toimproving access to medicine, we
believe that access to affordable insulin
is essential to the survival of millions
of people, even in developed countries
like the United States. The year 2023
was marked by a considerable drop
in insulin prices in the United States,
including by Novo Nordisk.

19
20

Engagement status

Case Study – Novo Nordisk
Engager:

Responsible Investment
Research

Asset Class: Equity, Fixed Income,Multi-Asset, Structured
Asset
We have engaged with healthcarecompany Novo Nordisk on public healthsince 2019. As the producer of aroundhalf the world’s insulin supply20, thecompany has a major role to play bygiving access to this vital treatment for
millions of people around the world.
In 2022 and 2023, we pushed Novo
Nordisk to disclose more information on
the breakdown of people benefiting fromlow-price programmes in the US andwere pleased the company announced

Why Diversity and Inclusion Has Become a Business Priority, Josh Bersin, March 2019
Position on access to diabetes care (novonordisk.com)

26 AXA IM Stewardship Report 2023

Company responds

it would lower US prices of several prefilled insulin pens and vials by up to 75%
in January 2024. This is a massive stepfor people suffering from diabetes.
Last year, we also started to address a
potential future risk of misuse of a newtreatment, Ozempic. Intended as a drug
to treat type 2 diabetes, the medicine
was also found to be effective in weightloss and fighting obesity, attracting
significant social media attention andcustomer demand. We expect Novo
Nordisk to implement efficient guardrails
such as prevention programmes for
doctors and will continue to discuss thisissue with the company in 2024.

Case Study – Gender diversity in Japan

21

Diversity levels in Japanese listed companies acrosssenior management and boards of directors varyby company and industry. In general, though,they remain below that seen in other developed
markets, as well as most other markets in Asia. We
have been encouraged, however, by several positive
developments in recent years, such as the reform of
the Tokyo Stock Exchange’s listing classifications,the revision of Japan’s Corporate Governance Code,a regulatory requirement 21 to address sustainability,
and ongoing plans by the current Japaneseadministration to mandate gender diversity-related
disclosure.

Governance Association, calling for improved gender
representation at top management level.

In compliance with the Japanese Stewardship Code,AXA IM stepped up engagement efforts in Japan
in 2022 to further promote diversity at board and
top management positions. This ultimately led toa public letter co-signed with the Asian Corporate

These engagements enabled us to confirm ourview on the degree of maturity and credibility ofcompanies with most advance DEI policies, while
increasing awareness on the importance of such
issues for companies that are lagging.

In 2023, we continued our engagement efforts ondiversity-related issues, including sending companies
a questionnaire, drawn up in 2022 jointly by ourJapanese credit team and Responsible Investment
team, based on KPIs included in the 30% Club France
survey. The Japanese credit team then reached out
to 24 companies, followed by face-to-face meetings(individually as well as, in some cases, collaboratively
with other global investors) or email communications
to discuss the responses to the survey.

Sustainable Finance, Financial Services Agency, December 2022
AXA IM Stewardship Report 2023 27

Engagement, collaboration and escalation

Engagement themes
Corporate Governance▶▶▶

Héloïse Courault, Constance Caillet andAlexandre Prost
AXA IM Corporate Governance & Stewardship
Analysts

Our engagement goals
At AXA IM, we believe sound corporate
governance creates the framework toensure a corporation is managed in thelong-term interest of its stakeholders.
It is a pre-requisite for sustainable
performance and the successful
integration of environmental or social
issues in corporate strategy. This is why
engagement on corporate governancerepresents such a large chunk of ourengagement activities (25% of ourengagement with objectives in 2023).
When engaging with investee
companies, we focus on the main

28 AXA IM Stewardship Report 2023

themes described in our Corporate
Governance & Voting Policy – including
board composition and effectiveness,sound remuneration structure andpreservation of shareholder rights.
We prioritise our largest holdings, orcompanies where we have identified amaterial change in governance.
Among the overarching principles of our
Corporate Governance & Voting policy
lies our strongly held belief that wemust use our influence as a responsible
investor to actively promote the highest
governance standards, while considering
as much as possible local and company
specificities. We do this by:• Contributing to industry working
groups and technical committees,such as the Global GovernanceCommittee of the International
Corporate Governance Network(ICGN) or the Corporate GovernanceCommittee of the French AssetManagement Association (AFG)• Actively participating in local investor
groups to deepen our knowledge of a
specific market, such as the Investment
Committee of Italy's Assogestioni, or the
Dutch association Eumedion

Our engagement activity

During 2023, we focused our discussion
with companies around themes thatshaped the 2023 season, including:• Executive pay and the notion of social
acceptability, considering workforcerelated views and experience when
discussing chief executive pay in a timeof economic and cost of living crisis• Sustainability governance, ensuring
effective board oversight of sustainability
issues while navigating conflicting views
on ESG in an increasingly polarised world• Protecting shareholder rights in relation
to potential evolution of the format ofcompany AGMs.

Engagement status

Case Study – Marshalls

Escalation

Corporate GovernanceTeam

Asset Class: Equity

the 2023 AGM. After sharing our voting
intentions with the company, Marshalls
reached out to provide more details.

We met with Marshalls’ Chair andRemuneration Committee Chair for the
first time in November 2022 to discuss
the company’s remuneration policy,
more specifically our concerns regarding
the significant increases in base salary
for both the Chief Executive (CEO) and
Chief Financial Officer (CFO). The CEO
and CFO received salary increases of 8%
and 5% respectively for the 2022 financial
year, followed by a further 12.2% and5.5% increase in April 2022 following theacquisition of Marley.

During our second meeting held before
the 2023 AGM, the company reiterated
its increased responsibilities since theacquisition of Marley and highlighted
that profits had also increased
significantly from 2021 to 2022. Wequestioned the rationale considering
the steep decline in the company’s
share price over the previous 12 months
and explained we believe that annual
increases in salary for executives should
be low and ideally proportionally lower
than general increases across thebroader workforce.

Social acceptability of executive
pay
Globally, executive pay attracted
renewed attention during the 2023
AGM season. After two financial years
impacted by the COVID-19 crisis, wehave seen some significant spikes inpay packages, mainly driven by anincrease in quantum and windfall
gains. Many responsible investors,
including AXA IM, advocate for fairer
compensation structures, especiallyin a time of economic crisis, whichhas prompted a cautious approach
towards this issue in our analysis andengagements.
Our view is that the cost-of-living
crisis presents a risk to investment
performance due to its potential
impact on worker productivity,
which in turn could negatively
impact economic performance andoverall market returns for investors.
In turbulent times, protecting themost vulnerable employees andinsisting on retention could be key
to navigating through the crisis as an
employer.
To avoid widening the gap between
average worker pay and the total
remuneration available to executives,
we asked whether companies hadtaken steps to support their lowest
paid employees and pushed forincreases in executive base salary
to be proportionally lower thanthe overall workforce. In terms of
escalation, if the approach takenby the company was not alignedwith our expectations, we withdrew
our support from resolutions toapprove the remuneration report or,in egregious cases, to reappoint thechair of the remuneration committee.

Engager:

We questioned this decision in the lightof the increased cost of living in the UK,
especially considering the single-digit
increase in base salary that was offeredto employees. The company confirmed
the employee benefits package would
also be increased, that it had considered
the interest of the global workforce, andit had held dialogue with unions.
However, following the announcementof yet another 5% increase in base salary
for the 2023 financial year, we decided tovote against the remuneration report at

We had significant concerns about
Marshalls’ approach and questions
around what we perceived as a potential
lack of awareness of the current
economic context, as well as the risks
attached to the proposed changes in
executive remuneration. As such, we
decided to maintain our opposition to
the remuneration report. Considering
the 25% of shareholders voting against
the remuneration report at the AGM, thecompany is expected to consider andrespond to shareholder dissatisfaction,
which we will carefully monitor in 2024.

AXA IM Stewardship Report 2023 29

Engagement, collaboration and escalation

Engagement themes
Corporate Governance▶▶▶
Engagement status

Case Study – Apple
Lead Engager: Corporate Governance Team
Participants:

Responsible Technology Analyst

Asset Class:Equity, Multi-Asset, Fixed Income,
Alternative Credit

Executive remuneration has been a topic of concern
for Apple shareholders for a number of years.
Following the substantial (nearly 40%) opposition22
from shareholders to CEO Tim Cook’s $99m pay
package at the 2022 AGM, we reached out to thecompany early last year to detail, among otherthings, our expectations on executive pay ahead of
the 2023 AGM.
We explained to Apple the reasons behind our 2022
vote against the remuneration, primarily linked to thesize and the structure of Cook's 2021 and 2022 equity
grants. The company explained that, in response toshareholder criticism, Cook’s pay would be cut by
more than 40% in 2023, leading to a $36m reduction
in his salary. Apple has also introduced a new bonus

Engagement Progressformula for executives, which includes an ESG bonus
modifier that can vary the total bonus amount by up
to 10%.
We acknowledged the board’s efforts andresponsiveness to investor feedback. However, wesought to better understand how this reduction had
been decided and whether it will be maintainedin the long term. Moreover, although we welcome
the inclusion of ESG criteria in remuneration, we
explained to Apple that we would prefer to seemeasurable ESG KPIs as standalone performance
criteria, and not just as a discretionary modifier, as iscurrently the case.
Based on what we considered as some positive
response to the shareholder dissent, we decided tosupport the 2023 remuneration package, but clearlycommunicated the rationale behind our votes aheadof the AGM. We also set out our expectations withrespect to future evolution in the remuneration
package and structure, and we may reconsider our
support in 2024.

Engagement status

Case Study – Universal Music Group
Lead Engager: Corporate Governance Team
Asset Class:Equity, Multi-Asset

We first reached out to Universal Music Group(UMG) in 2022, upon publication of its first
remuneration report as independent company
following its spin-off from French company
Vivendi. While UMG is listed in the Netherlands, its
remuneration practices are more similar to those of
the US, where the company’s key executives were
initially located.
We expressed our concerns to UMG’s investor
relations teams regarding the CEO’s pay (valued
at approximately €275m, largely due to initialpublic offering-related bonuses) which we deemed
disconnected from European standards. We also
communicated our intention to vote against the22Apple Inc. form 8-K, United States SEC, March 2022

30 AXA IM Stewardship Report 2023

Escalation
remuneration report ahead of the company’s
first AGM in 2022. We then reached out again
in early 2023 to request a discussion to share
our expectations on executive pay. Following
publication of the 2022 remuneration report
and the company’s decision to grant a €100m“transition award”, we told UMG we intended torepeat our opposition to the remuneration report
and to escalate our concerns by voting against there-election of the Remuneration Committee Chair.
The company’s 2023 AGM saw substantial
shareholder dissent on the remuneration reportand rejection of the Remuneration Committee
Chair’s re-election.
This year we will continue to try to engage on
executive remuneration and share our concerns on
the risks of excessive pay.

Governance of Sustainability

Appropriate governance, including
at board level, is key to ensuring
sustainability is embedded in strategic
decisions. Board directors must be capableof identifying ESG risks and opportunities
and challenging management onsustainability issues.
Therefore, we seek to ensure theboards of our investee companies are
sufficiently skilled and adequately
structured to establish proper oversightof the company’s ESG risks andopportunities. Our expectations, detailed
in our Corporate Governance & Voting
Policy, include full transparency on thegovernance chosen to oversee ESG issues,
as well as adequate coordination between
board committees on transversal ESG
topics. Moreover, we regularly discussboard sustainability expertise, throughdirectors’ skills or dedicated training. From2023, we have also begun formally asking
for transparency on governance of climaterelated issues at board level, in line with
the TCFD recommendations. Insufficient
disclosure would lead to a vote against the
Chair of the Governance Committee or the
Board Chair.
Board oversight of ESG issues is therefore
a key component of our stewardshipefforts and is addressed in more than
40% of our corporate governancerelated engagements. These are selected
examples of issues we discussed last year
when engaging investee companies on
their sustainability governance.

Case Study
Sustainability committee composition
We discussed various governancetopics with the lead director of aFrance-based construction company
as part of the company’s governanceroadshow. This gave us an opportunity
to request more information on
the level of board oversight of thecompany’s vigilance plan and humanrights-related risks, following a labour
rights-related controversy leading toa recent indictment of the company.
Among other things, we sought tounderstand whether the board’s
assessment of human rights-relatedrisks was updated following thecontroversy as part of the company’s
broader vigilance plan, as well as
which committee was tasked tomonitor human rights-related risks.
The company provided updates on thelegal proceedings as well as the levelof board oversight on this issue, which
was closely monitored especially by the
Sustainability Committee.
We then followed up with a dedicatedmeeting with the Corporate Secretary
as we had concerns around thecomposition of the Sustainability
Committee, which included a
representative of the country involvedin the human rights controversy. This
raised questions over a potential
risk of conflict of interest and theappropriateness of the committee’s
involvement in the oversight of thecontroversy. Although the company
confirmed the director’s independence,
we will continue to scrutinise thecommittee’s composition andencourage a more independent
oversight of this issue, for example by
the Audit & Risk Committee.

Case Study
Sustainability expertise
As part of regular meetings held with the
Corporate Secretary of a large Spanishbank, we started discussions around its
level of board expertise on sustainability
in 2022. We asked for further disclosure
on directors’ skills (especially as thecompany’s board skills matrix combines
corporate governance with othersustainability skills, which in our viewencompasses vastly different expertise),
as well as the type of training offered toboard members. Our goal was to better
understand the level of experience of
certain directors on specific ESG issues
considered as a priority for the bank(particularly climate and DEI), as well as
ensuring that the overall knowledge ofthe board on sustainability was regularly
reviewed and updated including via
dedicated training.

We met again with the Corporate
Secretary in 2023 and followed up on
this issue. The company confirmed
it would split corporate governanceand sustainability into two different
areas of the skills matrix, as well as
differentiating between high expertise(board members with extensive
professional experience in specificsustainability areas) and low to medium
expertise gained via dedicated training.
The company then gave details on
the training sessions, organized for asignificant period of time on specificissues where gaps have been identified
during the board evaluation. This
discussion gave us further confidence inthe credibility of the process followedby the board to assess its sustainability
expertise, and we will monitor future
improvements in the skills matrix.

AXA IM Stewardship Report 2023 31

Engagement, collaboration and escalation

Engagement themes
Corporate Governance▶▶▶

The future of the AGM format

Technological developments, combinedwith the impact of the COVID-19
pandemic, have driven the use of virtual
meetings. In 2023, we witnessed a waveof legislative changes in Europe leading
companies to amend their bylaws to beable to hold hybrid and/or virtual-only
AGMs.
In line with the International Corporate
Governance Network’s view, we have apreference for a hybrid AGM model as away to boost shareholder attendance,
while allowing international shareholders
an effective means of participating.
We think that virtual-only meetings,
if badly executed, diminish the abilityof all shareholders – both retail andinstitutional – to effectively participate
and engage the board without
management exerting some type ofcontrol.
The way companies conduct their
meetings is a good indication of theirattention to shareholder rights and theimportance they give to stewardshipand dialogue. With a number of highprofile demonstrations from nongovernmental organisations and civilsociety representatives at 2023 general
meetings, we worry that the virtualonly AGM could become the preferred
option for companies to pre-empt therisk of potential disruptions, ultimately
undermining the quality of shareholder
and stakeholder dialogue.

Case Study
Committee collaboration on key ESG issues
We have held discussions with the
Corporate Secretary and Head ofCorporate Social Responsibility (CSR)
of a Belgian pharmaceutical company
on its sustainability governance since2022. Health equity is considered among
the most material sustainability issues
for the business, and we are seeking tounderstand how it is overseen by theboard.
The company does not have a dedicatedcommittee at board level but rather has
an external committee, acting as anadviser to the company’s management
and the board. Our area of focus wastherefore to understand the levelof interaction between the external
committee and the board to ensure
adequate collaboration between thetwo (including via the organisation of
joint sessions on dedicated ESG topics
and the presence of certain board

32 AXA IM Stewardship Report 2023

members at the external committee
meetings).
Last year, the company organised its first
dedicated physical meeting during which
the external committee and the board
were able to engage on health equity
and access to medicine issues. We werepleased to see this type of dedicatedinteraction enabling effective information
sharing so that the board can benefit
from the external expertise. We continue
to encourage this type of collaboration
as well as further transparency in thecompany’s public disclosure including
around activities of the external
committee, topics discussed during
the dedicated meeting with the board,and eventually the committee’s annual
report which is presented to the Board.
We will also continue to scrutinise thecomposition of the external committee
since changes are expected this year.

Outlook for 2024
Corporate governance will remain a key
focus of our engagements in 2024, as we
remain committed to evolving our practices
and policies over time, integrating thematic
issues in our Corporate Governance &Voting Policy to reflect evolution in market
practice and trends. Hence, in 2024,
updates to our policy and principles will
include:Climate lobbying
The intensifying political backlash on
climate-related regulation, in contrast
with the urgent need for effective policy
intervention to enable a just and orderlytransition, highlights the importance ofclimate lobbying issues. Moreover, we
believe alignment between publicly-statedsustainability goals and private policy
engagement is a good indicator of the levelof credibility of a company’s sustainability
commitment and strategy.
Therefore, from now on, we will seek

to hold to account the highest emitting
companies which have been actively
lobbying against the goals of the Paris
Agreement on climate change. We will also
encourage disclosure on lobbying activities
from companies that voluntarily submit
their sustainability plans to a shareholder
vote.

and reduce economic growth. This isperhaps of even greater importance intimes of economic hardship, when highinflation, especially in energy and foodcosts, has caused a cost-of-living crisis thatwill take time to ease. Given the current
economic context, we believe responsible
investors must step in where needed, with athoughtful approach on compensation.

Virtual AGMs
For the reasons stated above, as of 2024 wewill generally oppose bylaw amendmentsthat seek to introduce a virtual-only
AGM format except in cases of strictly
exceptional circumstances andprovided that shareholders’ rights remain
intact.

We will therefore have a particular focus
on any change that could, for example,
potentially widen the pay gap between top
management and the rest of the workforce,increase challenging labour relations, bringhigher scrutiny from evaluators, or favour asteep rise in inequalities.

Executive pay fairness
We believe investors should advocate
for fairer compensation structures
as inequalities can have unintended
consequences for society, create instability

As of 2024, we will further consider wider
workforce experience when voting on
executive pay proposals, particularly when
the company’s board is proposing a pay
increase to its chief executive.

AXA IM Stewardship Report 2023 33

Engagement, collaboration and escalation

Protecting our shared interests
Governance▶▶▶

AXA IM’s long-term approach means
our relationship with investee firms
can continue for many years – decades
in some cases. We have a duty to ourclients, our colleagues and wider
stakeholders in society to monitor andengage with companies for the entire
time that we hold their stocks and bonds– 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 United Nations
Sustainable Development Goals (UNSDGs).
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
difference23. We do this in several ways:• We are proactive: We strive to engage
companies before concerns materialisethat can potentially harm investors.
We commit our efforts to ESG issues
which we consider to be the moststrategically and financially material
for long-term investors. These include

climate change, biodiversity, humancapital management, data privacy andcorporate governance.
• We are research-driven: As a truly
active investment manager, we conduct
in-depth analysis of companies and thebroader macroeconomic backdrop andincorporate ESG factors which shapeinvestment outcomes. Our engagement
and voting are built on the knowledge
and insights we have developed.
• We are an industry leader: Taking
a bold stance on difficult issues andcommitting resources to delivering
engagement outcomes helps us reachour goals for clients and society inthe long term. We also seek to work
collaboratively with other investors toachieve shared objectives.
• 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 (a set of principles based on
corporate commitments to implement
sustainability principles), the UN Guiding
Principles on Business and Human Rights

and OECD Guidelines for Multinational
Enterprises. In these cases, we will assess
the severity of the cases through our ESG
Monitoring and Engagement Committee
and consider whether to engage on areactive basis or make other decisions,such as to divest.
• We create impact: Investors can drive
impact in their investment activities bypressing for change at corporations –influencing the way they behave and do
business in selected cases, in line with the
double-materiality lens promoted by the
EU as part of its Green Deal. We focus ourengagement where we believe it can havethe greatest impact and consider how it
can align with the UN SDGs.
Our full Engagement Policy can be foundhere.

Responsibilities

At AXA IM, responsibility for stewardship falls
on a wide range of teams. These include (butare not limited to):• Within the RI Centre: The Corporate
Governance and Stewardship team andthe RI research team – including analysts
focused on themes such as climate,biodiversity or social, as well as corporate
governance and stewardship experts andothers involved in advocacy• Within AXA IM Business Units (AXA IM Core,AXA IM Alts, AXA IM Prime, AXA IM Select):‒ Sustainability teams‒ Fund managers and analysts• Public policy and regulatory professionals
The ultimate responsibility for stewardshiplies at AXA IM board level.
Nevertheless, the Corporate Governanceand Stewardship, RI research and RICoordination teams have a responsibility

23This approach applies in principle to portfolios under AXA IM’s management, subject to asset classes specificities described in the policy, including
dedicated fund and third-party mandates, unless the client has given different instructions for its mandate.

34 AXA IM Stewardship Report 2023

to formulate the broader engagement
programme and orchestrate the related
governance (including progress tracking
and use of escalation, reporting,etc.). These teams make a significant
contribution to engagement with issuers.
Engagement is performed across asset
classes. Investment teams empower theiranalysts and portfolio managers to engage
companies on ESG issues – in a similar
way as they do for financial analysis. This
covers ESG analysts, impact investment
analysts, and stock/credit analysts.
Many of the engagement meetings are
conducted in collaboration with RI experts
from research, corporate governance, ESG
and impact teams.

Forms of engagement

In listed markets, we clearly distinguishregular dialogue with investee companies
regarding their sustainability practices(referred to as ‘sustainability dialogue’)from active engagement, where we havespecific, identified objectives (referred toas ‘engagement with objectives’) in termsof our tracking and reporting. Our aim isto ensure robust engagement governancewhile properly reflecting the breadthof our dialogue with companies on ESG
topics.
We consider the former to be key inestablishing, developing and maintaining
a constructive relationship, as well as
gaining insight into a firm’s policies andpractices. However, while it may feed into
future potential targeted engagement, thistype of dialogue is less intensive and islargely an information-gathering exercise.
It is generally led by credit research or
portfolio managers looking to have abetter understanding of the sustainabilityrelated risk profile of a position held in

portfolios, and so they can in certain cases
be conducted at fund level, prioritisingcertain ESG issues depending on thespecific sustainability objectives of thefund or asset class type.
In the case of engagement objectives,
which seek to influence change atinvestee companies, these are generally
conducted by the responsible investment
and corporate governance research teams
at entity level, regardless of the asset
class type held in the engaged investee
company.

Selection of priorities

We have rolled out a clear process
for selecting priorities, which can beaddressed in combination:• Proactive: We proactively engage onmaterial ESG areas‒ Proactive engagement is conductedin the case of engagements with
objective for which repetitive
interaction is conducted on one
or two key issues, with the list
being adjusted on an annual
basis and validated by the AXA IM
ESG Monitoring & Engagement
Committee. Objectives are set
upfront and resources allocated.
This is the list for which we expect
regular individual engagement
meetings, updates and action.
Engagement progress with thesecompanies is regularly tracked by
the ESG Monitoring and Engagement
Committee, leading to the use ofengagement techniques whenrequired.
‒ AXA IM’s ‘Three Strikes and You’reOut’ policy would fall into thatcategory, as a forceful, proactive,
climate-focused engagement policy.

It aims to apply sufficient pressure
to affect timely change within aselection of companies which areconsidered to be materially lagging
versus their peers, or failing tomeet baseline expectations, hence
representing a higher risk. It includes
a selection of companies which do
not have net zero commitments, or
which have quantified emissions
reduction targets which are deemed
not be credible or demanding
enough. Clear objectives are definedfor each of those companies,
which follow our climate risk andengagement policies, and are
tailored to their activities andcommunicated to their management
at the inception of the engagement.
AXA IM engages regularly with thosecompanies to steer them to achieve
progress on those objectives,using escalation techniques whennecessary (e.g. voting against
management). If the objectives havenot been achieved after three years,
we will divest.
• Annual general meeting/ voting driven:
Before and after votes, we conduct
extensive discussions with a number ofcompanies on corporate governancematters, voting resolutions at upcoming
meetings and increasingly, on
sustainability issues which are a focusof shareholder proposals. Voting may
occasionally be used as an escalation
option if we believe engagement on athematic issue has stalled. For moredetail, see the Escalation section.
• Reactive: Cases when we need toengage in response to a specific event.
These may relate to severe controversies
and violations of international norms
and standards such as the OECD
AXA IM Stewardship Report 2023 35

Engagement, collaboration and escalation

Protecting our shared interests
Governance▶▶▶

Guidelines for Multinational Enterprises,
a breach of the United Nations Global
Compact, negative news flow or ban list
updates.
‒ Objectives of our reactive
engagement may include ensuring
adequate materiality assessmentof the controversy-related risk, thecompany’s oversight of such risk andits remediation plan
‒ Negative news flow: Our investee
companies are sometimes the
subject of negative news stories.
While these are not necessarilyranked as ‘severe’ controversies
by our research service provider,
we might want to engage withthe company to obtain a better
understanding of the issue andassess the quality of its response. In
certain cases, we may also decide to
exclude certain issuers on this basis,
if we feel the risks are material andthe response from management isinsufficient‒

Exclusion policies: Any update ofour ban lists can also lead to some36 AXA IM Stewardship Report 2023

companies being automatically
excluded (e.g. companies withsevere controversies or in breach ofinternational norms and standards).
Again, the ESG Monitoring andEngagement Committee can advise
to engage rather than exclude undercertain conditions described inrelated policies• Opportunistic: Our relationships withcompanies mean we are often invited
to attend conferences, roadshows orfield trips. This is an opportunity tolearn more about companies’ actions,policies and performance while also
updating them on our scrutiny andfocus areas. Pre-issuance roadshows,earnings, or strategy update calls may
also be appropriate opportunities
to discuss a company’s wider
sustainability strategy• Green, social and sustainabilitylinked bond (GSSB) engagement: We
engage with a few GSSB issuers before
issuance to discuss their framework
and alignment with their overallsustainability strategies and ambitions.
Post-issuance, we then carry out an
ongoing dialogue, prioritising issuersthat did not fully meet our initialexpectations, with the aim to help
them improve their GSSB offering andensure they publish impact reports
and effectively allocate the proceeds
to green and social projects. We also
continuously review opportunities
to influence the development of the
GSSB market and framework, throughregular discussions with other market
participants which are part of thebond market ecosystem, such as
underwriting banks

Collaboration

Much of our engagement is based solely
on our own efforts, but we also believethat collaborating with other investors
and stakeholders can help us to achieve
our goals. In 2023, although 73% of ourengagements with objectives were carriedout individually, we remained an active
participant in key industry initiatives such

as Climate Action 100+ 24. We were alsopart of the NA100 launch investor group
and are now a member of its steeringgroup. Started in September 2023, thisglobal investor initiative seeks to engage
companies in key sectors deemed to besystemically important in reversing natureand biodiversity loss by 2030.
2023 also saw the start of human rightsrelated engagements as part of the
Principles for Responsible Investment(PRI)-led collaborative initiative Advance,
which we joined in late 2022.
In 2023, AXA IM also joined theInvestment Managers Committee of the
Italian association of asset managers
Assogestioni. It aims to promote collective
engagement initiatives, facilitating theappointment of members of boards of
directors and statutory auditors’ boards
through the slate voting system. As amember of the Investment Managers
Committee, AXA IM contributed to
selecting potential candidates andsubmitting minority slates at the 2023
AGMs of six Italian companies, resulting inincreased levels of independence withincompany boards of directors.
We also continue to use collaboration
to support our policy advocacy efforts,
working notably with the Institutional
Investors Group on Climate Change (IIGCC)
as co-chair of its policy programme, andas a member and co-rapporteur of the EU
Platform on Sustainable Finance since
March 2023.
When deciding which initiatives toparticipate in or support, we focus on
topics and groups where we believe
our involvement will have a material
impact. Impact can often be greaterby joining forces with other investors
and stakeholders – as such we use acombination of collective and individual
engagement.

24

We play a proactive role in several industry
initiatives and assume leadership roles
as often as possible, as highlighted inAppendix III.

Case Study
In 2023, we started our engagementwith Siemens Energy – formerly
Siemens Gamesa – as part of PRI-led
Advanced collaborative initiative onhuman rights. Our main objectives
relate to the implementation of arobust and transparent governancefor overseeing human rights-relatedrisks and commitments, particularly
given the merger of Siemens Energy
and Siemens Gamesa, as well as proper
management of human rights-relatedrisks throughout the company’s supply
chain.

Tracking engagement progressFor ‘engagement with objectives’, we systematically track engagement progress using
five stages that set out the range of possible outcomes:

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
1. The engagement commences, often by requesting to discuss specific issues with an issuer's representatives
2. Upon approving to meet with us, the issuer recognises the presence of the issue and accepts to discuss with us
3. The issuer has not provided a satisfactory response to the initial engagement request and/or does not demonstrateadequate accountability. We must now scale up our engagement effort. An escalation strategy is therefore
determined for every engagement activity
4. We made tangible progress in our engagements, and we are seeing the issuer taking more decisive step sin
addressing the issue we initially contacted them for
5. A positive milestone is reached as the issuer has effectively resolved our initial concern, while demonstrating fullaccountability
0. The issuer failed to address our concerns

Climate Action 100+

AXA IM Stewardship Report 2023 37

Engagement, collaboration and escalation

Protecting our shared interests▶▶▶

GovernanceAll our engagements have their objectives
established upfront. We engage with issuers
and track progress – achieving effective
change can take time, and we define thetimeframes which we consider reasonable
to achieve these objectives, depending on
their nature and the underlying concerns.
These also differ according to the objective’snature, where the issuer is based and thetheme it concerns.
In 2023, we recorded 14 milestones –instances where we believe we achieved
our engagement objective (stage five). We
have escalated our engagement with 16
issuers (see next section for further details)
due to a lack of progress. Some of these may
be recorded as engagement failures in the
coming year or two.

Escalation

Engagement does not always progresssmoothly, and responses given bycompanies can be unsatisfactory or slow. It
is therefore crucial in such cases to escalate
the issue to keep the process moving andcontinue to make progress towards our
objective. Here again, there are multiple
options available for escalation:• Targeting more senior input: We may
seek to move the discussion up the
corporate chain, ultimately through tochief executive/chair level• Collaborating with other investors:
Working with other investors can senda unified message to formal industry
groups or ad-hoc associations• Involve portfolio managers: Portfolio
managers often have in-depth knowledgeof investee companies and may haveuseful connections. Working withportfolio managers on specific cases cantherefore be an efficient way to ensure
our messages reach the right people• Voting against resolutions at AGMs:
We use voting as a mechanism toescalate engagement concerns. Whenengagement on key themes stalls, we canshow dissent by voting against specificresolutions• Co-filing shareholder resolutions: We
may also consider co-filing a resolution
on specific ESG issues

Selected anonymised examples of escalation
SectorGeography

Nature of issue

Escalation technique

RetailerUS

Human capital

Targeted senior input by sending a letter, together with other investors, to the chairof the board, requesting the implementation of a shareholder resolution on a worker
health and safety audit

Food

BrazilDeforestation

Voting against the board and privately disclosing our vote intentions to the company
ahead of the AGM, following an unsuccessful request to meet and discuss theirbiodiversity strategy

Financial

CanadaClimate change
financing

Voting in favour of climate-related shareholder proposals submitted at several
Canadian banks over concerns regarding their fossil fuel financing policies

Technology

US

Data privacy

Publicly pre-disclosing our intention to support tech-related shareholder proposals toensure appropriate board oversight of human rights and privacy issues

Oil and Gas

UK

Climate change

Co-filing a shareholder proposal to signal our concerns on the company’s climate
strategy ahead of the 2024 AGM

Real Estate

Germany

Governance

Downgrading the company’s ESG rating which resulted in its exclusion from ESGintegrated portfolios following recurring and structural concerns of business ethics andfraud

38 AXA IM Stewardship Report 2023

• Downgrading the company’s ESG
rating: This could then lead to reducing
exposure or fully divesting from certain
funds• Divestment: We consider the threatof divestment as a means of puttingpressure on companies to change theirpractices. In the most severe cases,
we may divest when we deem that nomaterial change can occur.
The use of a specific escalation technique
may vary depending on various factors,
such as the severity of the concerns
raised during engagement, the degree of
responsiveness of the company, but also
the market where the company operates,
and the type of asset class held.
For example, we may be more prompt tofile or co-file a resolution at companies
in the US, Canada or the UK compared toother markets, considering the applicablefiling requirements. In other markets, we
may prefer to use other rights available tous, such as by raising questions at general
meetings.
Where possible, we will seek to integrate
ESG-related concerns raised by fixedincome teams or during GSSB-related
engagements into our equity-linked
voting decisions. We will also seek to use
other tools at our disposal.

AXA IM Stewardship Report 2023 39

Promoting well-functioning markets

Public Policy
Supporting the development of robust and usable policies
to facilitate the transition to a more sustainable world

Clémence Humeau
AXA IM Head of Sustainability Coordination
and Governance

At AXA IM we adhere to the principles,standards and codes which govern
policies and practices in the markets
where we are active, while recognising
the challenges that diverging
approaches to ESG can create in termsof understanding and implementation.
We strive to give transparency on our
approaches and the footprint of ourinvestments and have aimed to do so forseveral years.
The past years have marked a step change
for the financial industry in many of thecountries and regions where we operate,
as major sustainable finance policies
have entered into force. These have hadmaterial impacts on financial institutionsin terms of disclosures, as well as productdesign, for instance the EU Sustainable
Finance Disclosure Regulation. The new
regulations have also resulted in new
disclosure requirements for corporates,
for instance with the introduction of the
EU Taxonomy, a classification system thatdefines criteria for economic activities
that are aligned with a net zero trajectoryby 2050 and broader environmental goals
other than climate.
The EU Taxonomy, which has inspired thedevelopment of similar initiatives in manyother geographies25, is at the heart of the
EU Green Deal. The Green Deal will becompleted from 2024 by the EU Corporate

Sustainability Reporting Directive (CSRD),
which requires all large companies
and all listed companies to disclose
information on what they see as the risks
and opportunities arising from social andenvironmental issues, and on the impactof their activities on people and theenvironment26, while other geographies
may rely on the standards developed by
the International Sustainability Standards
Board, a baseline of sustainability
disclosures focused on the needs ofinvestors and financial markets27.
This wave of new regulations continues
to present challenges in terms of
implementation, some due to usability
issues in the regulations themselves.
Other simply reflect the fact that theseregulations are aimed at transforming theway the financial sector but also the real
economy operates to ensure they support
the transition to a Paris Agreement-aligned
world – requiring structural changes tohappen across the value chain. Ultimately,
we are convinced the long-term goals of
many of those regulations are aligned withAXA IM’s net zero commitment and canhelp facilitate the allocation of capital tosupport decarbonisation of high-impact
sectors as well as innovation in thesustainable solutions necessary for thetransition to happen – which shapes ourpolicy views.
We have started to see illustrations of
this virtuous circle and consider that
the EU Taxonomy, the CSRD and the EU
Corporate Sustainability Due Diligence
Directive (CSDDD) have the potential
to help us to implement our net zerotargets more effectively as highlighted in
the EU Platform on Sustainable FinanceCompendium of Market Practices28 which
AXA IM contributed to as member and co-rapporteur for the platform’s sub-group on
Usability and Data.
We also recognise that usability issues
and the sequencing of regulations andguidance have led to significant costs anddifficulties for investors in interpretating
and implementing the legislation. We
therefore consider that usability issues
will need to be addressed quickly andin an orderly manner, bearing in mind
the inter-operability challenges faced
by global, diversified investors. We also
believe that they should be accompaniedby the appropriate real economy policies
to enable an effective real-world transition
towards more sustainable practices,consistent with the goals of the Paris
Agreement.
With a few years since the introductionof the Sustainable Finance Disclosure
Regulation (SFDR) and Taxonomy, users
across the value chain have gained anenhanced, shared understanding of the
key expectations but also challenges to beaddressed to make the framework more
usable. They have been able to share theirviews as several consultations were issued
throughout the year. We contributed
to these discussions through different
channels, participating in technicalworking groups such as the EU Platformon Sustainable Finance, engaging directlywith policymakers or jointly with peers
as part of industry working groups suchas the IIGCC Policy Advisory Group, the
PRI Global Policy Reference Group, or the
EFAMA ESG and Stewardship Committee.
Our advocacy efforts in 2023 have focusednotably on the following:29
Addressing the current shortcomings of
SFDR within the European sustainablefinance ecosystem. While we support

https://www.climatebonds.net/files/reports/cbi_taxonomy_ukpact_2022_01f.pdf
https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporatesustainability-reporting_en27
AXA IM is a member of the ISSB Investor Advisory Group28
https://finance.ec.europa.eu/publications/platform-sustainable-finance-report-compendium-market-practices_en29This list does not intend to be exhaustive, and we have as an example contributed to industry associations’ responses on approaches being developed at
local level, including in the UK with the Sustainable Disclosure Requirement Discussion Papers
25
26

40 AXA IM Stewardship Report 2023

its overarching objective of providing
increased transparency and comparability
to our clients, several of the SFDR’s key
concepts have remained too vague, in
our view. These include the definition ofwhat a sustainable investment is, resulting
in uneven implementation across themarket. We would also see benefits inthe development of a complementary
categorisation regime with clearer
minimum criteria which could be basedon metrics including some of the SFDR
Principal Adverse Impacts and the EU
Taxonomy, for example – provided theusability of those metrics continues to be
improved (e.g. clarification of calculation
formulae, use of estimates for non-EU
companies, etc.). We believe this could
address the needs of some of our clientsand help facilitate the channeling offlows towards transition and sustainable
investments to fund the current
investment gap to reach EU net zero goals.
We also encourage further simplificationand proportionality in the disclosure
templates, acknowledging that SFDR
templates are complex to prepare, and tounderstand, and may have not had theintended effect in terms of facilitating
end-investors’ understanding. Finally,
we believe it will be essential to ensure
an effective articulation between any
revision made to the SFDR and the newsustainability preferences framework
introduced in the EU’s Markets in
Financial Instruments (MiF) regulationin August 2022.
Our advocacy efforts on SFDR havetaken place within the EU Platform on
Sustainable Finance, as well as withinvarious industry groups in public
consultations on the revision of theRegulatory Technical Standards, andthe revision of the Level 1 regulation.
There have also been individual
engagements with the French Treasury
and selected local supervisory
authorities.
In the UK, we also contributed toindustry groups on the Sustainability
Disclosure Requirements (SDR) andengaged directly with policymakers
on this regulation, sharing our
experience at EU level. We welcome theintroduction of clearer rules in the UK.
Another priority relates to thepromotion of a regulatory environment
which does not impede, and evensupports shareholder engagement andvoting in having an effective impact on
investee companies’ governance andsustainability strategies. When it comesto voting, at EU level some progress
was achieved with the revision of the

Shareholders Rights Directive II (SRD II)
in 2020, including with regards to voting
transparency and votes on executive
pay. However, investors have continued
to face technical obstacles in exercising
voting rights. We highlighted them inour contribution, individually as well as
through several industry groups, to acall for evidence on the implementationof SRD II provisions from the European
Securities and Markets Authority in 2022.
We continued to express those concerns
in 2023, contributing again to the
responses, individually as well as
through several industry groups to theEuropean Commission’s SRD II Impact
Assessment study conducted to highlight
key priorities to consider in the revisionof the regulation. Another regulation
we focused our efforts on in 2023 was
the revision of the Listing Act, which inour view introduces a risk of dilution
resulting from dual class shares, which
could undermine the level of board
accountability towards the concerns
raised by minority shareholders. On asimilar topic, we provided via one of our
UK industry associations our concerns inrelation to the FCA Consultation Paper on
Primary Markets Effectiveness. We also
responded to the consultation from the
Vote Reporting Group on shareholder
voting and vote transparency, calling for

AXA IM Stewardship Report 2023 41

Promoting well-functioning markets

Public Policy
Supporting the development of robust and usable policies
to facilitate the transition to a more sustainable world
higher quality reporting while making
recommendations to alleviate thereporting burden, among other things.
Turning to shareholder engagement, toeffectively support change within investee
companies we believe robust stewardshippolicies and frameworks are essential.
We have welcomed an increasing
understanding from clients and certain
regulators of the importance of quality of
dialogue as a lever of change beyond, oreven above, quantity.
At EU level, guidance arising from SRD
II is lighter, as the regulation statesthat investors are expected to have an
engagement policy in place at entitylevel, with implementation remaining
largely voluntary at this stage. There is
no EU-level guidance similar to the UK
Stewardship Code either at this stage.
While many large EU asset managers
as AXA IM are signatories to the UK
Stewardship Code which has contributed
to reinforcing their shareholder
engagement policies, practices anddisclosures, we believe further guidanceat EU level, including a common definition
and understanding of reporting thatis practicable and effectively supports
stewardship understanding on all sides

30

would be beneficial. We will aim to further
convey this stance in 2024.
On corporate governance more broadly,
we also provided our comments to the FRC
as part of its public consultation on the
updates to the UK Corporate Governance
Code, welcoming further outcome-based
reporting, as well as recommending
increased transparency on climate
governance at board level and stressing
the importance of challenging ESG KPIs in
executive pay.
We continue to advocate for issuers
to adopt the best governance andsustainability-related policies andpractices through our involvement in the
Global Governance Policy Committee of
the International Corporate GovernanceNetwork. This resulted in the publicationof viewpoints dedicated to virtual general
meetings and board governance ofsustainability, as well as a statement
highlighting investors’ concerns overannouncements in the UK which may
be detrimental to corporate governancestandards and shareholder protections,potentially undermining the UK’s
economic growth and attractiveness as a
global financial center30.

We have continued to advocate forrelevant and comparable sustainabilityrelated information to become available
for a broader scope of issuers. This data
is absolutely crucial to allow investment
teams to embed ESG into their decisions
in a robust manner, and to enable us
to provide meaningful, comprehensive
reporting to clients and regulators – thus
satisfying new disclosure requirements
at fund and entity level in the EU andbeyond. In particular, we called for a
double-materiality lens – looking at
the impact ESG factors may have on
financial performance, but also at the
impact investments may have on theenvironment and the planet. This reflects
our role as responsible investors, andour wish for a better convergence at a
global level, building where possible on
existing and viable standards. In 2023
our advocacy efforts have in particularfocused on highlighting the need for
ESG data distributed by data providers
to be sufficiently robust, consistent, andreliable (see below for details).
As we enter 2024, we will closely
monitor the impact upcoming elections,
including in the US and EU, could haveon the policy landscape. When it comesto sustainable finance and real economy
policies, we acknowledge that a more
proportionate and targeted approach
may be beneficial on a few targetedissues, based on lessons learnt fromthe first years of implementation. For
example, sustainability disclosures withfund level disclosures adapted to thefund objectives. Beyond this, momentum
must be maintained on the EU Green
Deal, and on similar policies at a global
level which look at sustainable financeand real economy in a complementarymanner. This is important if investors
are to be able to achieve their net zerocommitments, and also implement theregulatory requirements which apply tothem.

https://www.icgn.org/icgn-statement-high-standards-corporate-governance-and-investor-protections-pre-requisites-uk

42 AXA IM Stewardship Report 2023

Against a backdrop made more complex
by upcoming elections, there remains aneed for stakeholders to come together
and regroup to find robust and workable
solutions, from asset managers tocorporates, auditors and consultants,
policymakers and supervisors. Thisis essential if the EU is to achieve its
2040 climate targets, and for the asset
management industry to continue
to successfully implement net zerocommitments31.

LabelsAXA IM held more than 100 sustainability– related labels as of end 2023 and has
contributed to public consultations organizedin France and Belgium as part of their revisionof the Label ISR and the Towards Sustainability
Label rulebooks. Those contributions took theform of written responses to the consultations,participation to industry group discussions aswell as direct engagement with policy-makers
or bodies in charge of the rulebook.

We hope to see further momentum on
the real economy policy side, while
acknowledging the impact and influenceof macroeconomic events. We aim tocontinue to engage with our investor
base, providing educational content on
those important and evolving policies,
to encourage an understanding of how
these may change our way of working
and change the nature of portfolio
investments.

Overall, we were supportive of efforts toensure the credibility of the labels, therefore
helping to maintain the trust of end-investors,
particularly retail. We feel the labels should
avoid too much complexity and costs for theend clients, but first and foremost should
facilitate clients’ understanding. We were also
in favour of an effective articulation of othersustainable finance regulations (e.g. SFDR PAI

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 greaterby joining forces with other investors
and stakeholders. Our public policy
engagement is achieved through direct
engagement with policymakers andregulatory authorities, participation inindustry working groups, and responses
to consultations. A list of these can befound on page 100.

ESG ratings - Stéphane Janin,

31

and the EU Taxonomy), which we consider
could ultimately, if properly functioning,
replace local labelling regimes.
Finally, we advocated in favour of meaningful,but also usable, criteria and rules adapted
to the objectives targeted by the labels. In
France for instance we are supportive of alabel which would have different branches,
depending on the sustainability objectives(e.g. transition), with common foundations toensure investments meet the objective of ‘Do
No Significant Harm’. In keeping with our focus
on effective stewardship practices, to support
real-world decarbonisation, we advocated forthe use of engagement with clear deadlines
communicated to investee companies, anduse of escalation techniques. We were happy
to see this proposal retained in the new LabelISR rulebook.

Head of Global Regulatory Developments and Public Affairs
We have been actively engaging within
industry groups, as well as directly with
policymakers and supervisors to share
our expectations on the EU ESG ratings
regulation proposal, as well as a UK
working group set up by the Financial
Conduct Authority (FCA) supporting a Codeof Conduct for ESG ratings and ESG data
providers. We highlighted issues that we seein terms of robustness and transparencyof the ESG datasets that are distributed,
which can make their use complex when
producing regulatory disclosures (e.g. PAI
statements related to SFDR), or when they
are considered them in investment decisions(e.g. in relation to the Taxonomy Regulation).
When doing so, we recommended that the
principles enunciated by the International
Organization of Securities Commissions(IOSCO) should be followed.

We were highly satisfied with the outcomes of
the UK working group which we contributed tothat led to the publication of a Code of Conduct
in December 2023, already signed by 15 ESG
data or rating products providers. In the EU,
we also advocated for the regulation to include
ESG data products beyond ESG ratings, notingthat raw data was increasingly re-disseminatedand more and more used by investors, gaining
traction over ESG ratings for the purpose ofsustainability performance monitoring or
sustainability objective definition. We weredisappointed by the limited outcomes ofthe legislative process only capturing ESG
ratings but not ESG data products, and we willcontinue to advocate for a wider framework at
EU level, in line with the level of ambition andrequirement already in place at EU level for the
rest of the ESG value chain as well as requested
at a worldwide level by IOSCO.

AXA IM For Progress Monitor
AXA IM Stewardship Report 2023 43

Voting

Voting: Key 2023 Data
Our 2023 voting activity in figures
Meetings voted & level of dissent
7000Héloïse Courault, Constance Caillet andAlexandre Prost
AXA IM Corporate Governance & Stewardship
Analysts

We consider voting an integral partof our ESG integration, and more
specifically, stewardship approach.
But we want to ensure we have ample
engagement and dialogue with issuers
to ensure we cast a quality and informed
vote. Although we review our Corporate
Governance & Voting Policy annually,
notably to continuously strengthen
the link with our thematic engagement
policies, we also allow clients insegregated mandates to apply their own
voting policies depending on their ESG
preferences or market regulation.

6000

4000

5179

60%
50%

4693

46%
42%

39%

40%

2000

20%

1000

10%

0

0%
2017

2018

2019

General Meeting

2020

2021

2022

2023

% Meetings with at least
one vote against management

Source : AXA IM, end 2023

Breakdown of votes by topic

14%

44 AXA IM Stewardship Report 2023

56% 5546

70%

62%

30%

Nearly 97% of those proposals andmeetings voted at were in accordancewith AXA IMs’ Corporate Governance &Voting Policy. They resulted in:

In applying our policy when voting, weare cognizant of the fact that companies
are dynamic and a ‘one size fits all’approach is not appropriate. Therefore,
our voting approach is based, above all,

59%

60%

3000

2%

• The highest level of opposition remains
for board issues (38% of votes against
management), followed by executive
remuneration (27% of votes against)

6016

5000

During 2023, AXA IM voted on a totalof 54,782 proposals at 4,856 meetings,
representing 97.6 % of the meetings we
could vote at. Meetings where we were
not able to vote were those in markets
where processing votes would be too
costly or would impede the investment
process.

• An average opposition rate of 15.08%,
with at least one vote against cast in
62% of the meetings where we voted

5932

5814

6247

General meeting formalities

4%

Dividend payout

4%

Articles of Association

9%

Capital issues

2%

Business Reorganisation / M&A

2%

Related Party Transactions

1%

ESG-Linked Resolutions

1%

Anti-takeover provisions

Accounts and auditors

14%

Remuneration

47%

Board issues

Source : AXA IM, end 2023

and engagement, with investee
on our regular dialogue with the firms
companies:
we invest in, an understanding of theiractivities, their sector and the challenges• We recorded 123 votes linked tothey face, so we can vote in a highlyengagement, 53% of which were
informed manner.
influenced negatively (either because
a company’s explanations were not
To reflect this, in 2023 we started todeemed convincing, our expectations
record all votes influenced, either
and recommendations had not been
positively or negatively, by our dialogueconsidered, or because voting wasused as an escalation technique).
On the other hand, this also meansthat 47% of our votes were positively
influenced by the dialogue we
had with our investee companies,
illustrating the importance of aquality dialogue between issuers andtheir shareholders• Most of the recorded votes werelinked to corporate governancerelated engagements (74%, primarilyon executive pay-related issues,
as well as board composition andshareholder rights) although climaterelated engagements also fed into ourvoting decisions (in 19% of cases)• This is even more striking whenlooking at votes used as engagement
escalation, in which case 61% of themwere linked to climate

Our votes against management by topic

3%

ESG-Linked Resolutions

3%

Business Reorganisation /M&A

7%

Articles of Association

9%

Capital issues

37%

Board issues

14%

Accounts and auditors

27%

Remuneration

Source : AXA IM, end 2023

Our Global Voting Footprint

727
Meetings Voted

1,181
Meetings Voted

425
Meetings Voted

1,512
Meetings Voted

155
Meetings Voted
431
Meetings Voted

Oceania
EuropeEmerging Markets
Norh America
FranceUnited Kingdom
Japan

Source : AXA IM, end 2023

262
Meetings Voted

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© Australian Bureau of Statistics, GeoNames, Microsoft, Navinfo, OpenStreetMap, TomTom
AXA IM Stewardship Report 2023 45

Voting

Voting: Key 2023 Data
Our 2023 voting activity in figures• North American markets werecharacterised by a higher level ofrecorded dissent, particularly on boardrelated resolutions (representing 45%
of our votes against management onboard issues), and on remunerationrelated resolutions (representing 48%
of our votes against management on
remuneration).
‒ Despite this high dissent level– reflecting the fact that executive
pay practices continue to fall behind
our standards – we have observed
encouraging signs of responsivenessfrom companies addressing theirshareholders’ concerns raised underprevious ‘say-on-pay’ votes‒ Transparency of ESG oversightcontinues to be lower than in‒European markets, leading to
opposition on board election for
insufficient disclosure of climate
governance or on executive pay forlack of ESG criteria
On a more positive note, board
diversity (gender and ethnic)
continues to improve• UK: In the UK, companies with higher
shareholding levels tend to provide
board members with easier accessto information, enabling us to makebetter-informed decisions and guidethe company’s strategy, especiallyin contentious situations, and this iscorrelated with the level of maturity in
the UK’s governance topics. In 2023,
the UK’s cost-of-living crisis worsened,with inflation rates reaching record
levels, affecting daily life andhousehold consumption. This crisis
had a significant impact on thevoting season, leading AXA IM to
ask companies how they supported
their employees and vote against
15 executive remunerations, whose
increases were decorrelated fromthose granted to the wider workforce• France: Executive pay in France is,by far, our main area of opposition,
representing 38% of our votes against
management. Although nearly allcompanies are compliant with ourpolicy on ESG KPIs in executive pay, we
continue to raise concerns on the levelof transparency as well as the pay-forperformance link
• 2023 also saw a significant dropin the number of ‘say-on-climate’votes (AXA IM voted on 24 proposals,
compared to 33 in 2022), which
is likely attributed to the fact thatmost companies opted for a threeyear frequency in the vote on theirclimate transition plan, as well as a
‘wait-and-see’ approach from othercompanies waiting for regulatory
evolution around sustainability
disclosure, including the upcomingtransposition of CSRD. Nevertheless,France and the UK remain, as in 2022,
the main markets where we observed‘say-on-climate’ votes, with 13 such
resolutions submitted by French or UK
companies• Japan: Nearly all our votes against
management cast in Japanesecompanies were linked to election
to the board or the board of thestatutory auditor, due to a persistentlack of independence and gender
diversity - although we are encouraged
by positive momentum caused byevolution in the Japanese corporate
governance code.

46 AXA IM Stewardship Report 2023

Our approach to environmental and social proposals
ESG Shareholder Proposals
We consider supporting ESG shareholder
proposals as an effective escalation tooland supported 68% of them in 2023,
among which:• 55% were related to corporate
governance issues, and AXA IM
supported 76%• 28% were related to social issues, andAXA IM supported 53%• 17% were related to environmental
issues, and AXA IM supported 63%
As in prior years, the vast majority (72% ofshareholder proposals) were put forward
in North America. Interestingly, France saw
two climate-related shareholder proposals
submitted at energy companies, including
the first advisory-only shareholder
proposal at TotalEnergies’ AGM. Japan,
as in 2022, continues to be a market
where a limited but notable numberof environment and social resolutions
are filed, mainly by non-governmentalorganisations, at company AGMs (including
large financial groups). Another interestingdevelopment is the rise of anti-ESG
shareholder proposals, as AXA IM voted on(and opposed) a record number of suchproposals in 2023.
AXA IM follows a tailored approach tovoting on shareholder resolutions, as weseek to carefully examine each proposal
on its own merits. We believe that it
does not always make sense to support
such shareholder resolutions if they are
not well targeted for the company inquestion or if they fail to acknowledge
efforts and commitments in progress,
or in slightly different forms. We have aclear stewardship approach which frames
how we decide whether to support ESG
resolutions.

32

The main reason not to support ashareholder resolution is when the mostmaterial requests of the proponents
are already disclosed by the company.
Moreover, we have witnessed a growing
number of proposals with a higher
degree of prescriptiveness. In somecases these may interfere with theboard’s responsibilities, not be in thebest interests of shareholders, or evenhave an unwanted impact on society(e.g., a climate-related resolution
requesting a drastic shift in the company
without considering the broader societal
impact of the energy transition).32
Other common reasons not to support

a specific shareholder resolution arewhen we feel the demands are more
appropriately addressed via supporting
another shareholder resolution on theballot, or when we decide to oppose amanagement-related resolution instead.
In specific cases, we may support ashareholder proposal which does not fully
match our expectations, or which may
be considered as prescriptive when theunderlying objective is aligned with our
main environmental or social concern,in order to send a signal to the company
when we were dissatisfied with its current
policies or practices.

Case Study
Shareholder resolution
at Mizuho Financial GroupThe agenda for Japanese Bank Mizuho
Financial Group’s 2023 AGM included ashareholder resolution calling on thecompany to disclose information on its
plans to achieve its net zero emissions
by 2050 commitment, and for thecompany to appropriately manage
climate change risks.
We have engaged with the company
on climate change since 2022, and ourconstructive dialogue has shownan
encouraging direction of travel on

the climate front, as confirmed by theincreased level of detail (including on
sectorial and technological analysis) of
its latest sustainability report.
However, we considered at the timeof the 2023 AGM that further progress
was still needed, including on detailed
sectorial targets for financed emissions,as discussed during our private
engagements. Hence, despite thecompany’s recent improvements, we
supported the shareholder proposal
to reflect our expectations mentioned
during engagement.

Global temperatures set to reach new records in next five years, World Meteorological Organization, May 2023

AXA IM Stewardship Report 2023 47

Voting

Voting: Key 2023 Data
Our approach to environmental and social proposals
We acknowledge the increasing scrutiny
from various stakeholders on our voting
decisions for these types of proposals
but believe the intrinsic binary natureof the vote does not always fit an issue
which may not be black or white.
Therefore, and as we strive to provide
the highest level of transparency toall our stakeholders, we will start
disclosing, as of 2024, the rationale
for all our votes against ESG-relatedshareholder proposals.
Moreover, while we see environmental
and social shareholder proposals
as a very useful tool to express
potential concerns over a company’ssustainability policy or practice, we
believe focusing solely on this typeof resolution to reflect an investor’s
stance on ESG issues is too restrictive.
Indeed, voting on an ESG shareholder
resolution will intrinsically be linked tothe company’s market and shareholder
base, and will not necessarily result
in real world impact (especially as thevast majority of shareholder proposals,
filed in the US, are only advisory).
Therefore, we seek to integrate specificenvironmental or social concerns tomore traditional standalone items,
leading in 2023 to 193 votes against
director re-election, discharge, orreports, as well as 528 votes against
executive pay.

48 AXA IM Stewardship Report 2023

Case Study
Shareholder resolution at Martin
Marietta

At its 2023 Annual AGM, Martin Marietta,
was targeted by a shareholder proposal
calling for the company to adopt
greenhouse gas emissions reduction
targets.
The company’s 2023 Sustainability Report,
published prior to its AGM, included a
new net zero scope 1 ambition for its
entire operation, as well as enhanced
intermediary targets. The company alsoannounced its commitment to seek a
SBTi certification. As with its peers in the
cement sector, Martin Marietta has not set
targets on its scope 3 emissions, which
is viewed as a low materiality, and is notconsidered to be SBTi validated.
As the company has actively worked
towards its net zero targets andreducing its carbon footprint, byprioritising emission reduction andresource efficiency, we voted against theshareholder proposal.

Our approach to environmental and social proposals
Supporting a shareholder
resolution, and then?
Most environmental and social
shareholder proposals are filed in
the US, where the legal scope of such
resolutions is only advisory. Therefore,
majority adoption of a resolution
does not necessarily mean it will be
implemented. Moreover, the capital
structures of some companies (such as
those with super voting rights granted
to the company’s founder and CEO)may act as a barrier to the adoption ofshareholder proposals to the detrimentof board accountability.
Therefore, to ensure our votes onshareholder proposals are effectively
followed through, and that boards
remain accountable to theirshareholders and responsive to theirconcerns, wereached out to some
portfolio companies after a resolutionthat we have supported, and which
received majority support. Our aim is tourge the relevant boards to implement
the proposals.
In 2023, we have decided to join forces
and reach out, jointly with other likeminded shareholders, to companies’
boards, urging them to implement
specific shareholder resolutions.

Case Study
Shareholder resolution at
AmazonAggressive tax practices pose material
financial risks, as a company’s
profitability is dependent on tax savings,
and lead to heightened vulnerability
to regulatory changes. It also increases
the litigation and reputational risks
weighting on companies. For that reason,
we updated our Corporate Governance& Voting Policy in early 2023 to formalise
our expectations with regards totransparent tax disclosure and robust tax
governance.
Amazon’s tax practices have been
repeatedly challenged by tax authorities,
resulting in significant settlements andadjustment costs. Currently, Amazon
publishes neither its approach to tax nor
its tax governance. As such, investors

have no insight into the company’s risk
appetite, or its assessment of tax risks.
Thus, at the company’s 2022 and 2023
AGMs, AXA IM supported a shareholder
proposal requesting Amazon to publish
a tax transparency report according to
the guidelines defined by the Global
Reporting Initiative tax standard.
Amazon has shown no willingness to
respond to the resolution, which failed
to receive majority support (partly
due to CEO Jeff Bezos’ stake in thecompany’s capital), nor to improvetransparency of its tax policies andpractices. Therefore, we decided to sign
a joint letter sent at the end of 2023
to the company’s Board of Directors,
requesting a discussion on responsible
corporate tax, Amazon tax practices, andbest practice standards.

Case Study
Shareholder resolution at Dollar
General

Dollar General has been under public
scrutiny for several years due to poor
working conditions and practices. The
company is currently facing lawsuits
on wrongful termination, harassment,
discrimination (e.g. age, race,
pregnancy), and underpayment.
At its 2023 AGM, over two thirds ofinvestors, including AXA IM, voted
in favour of a shareholder proposal
requesting an independent third-party
audit on the impact of the company’s
policies and practices on the safety andwellbeing of workers. Yet Dollar General
has not responded nor provided any
information about the company’s plans
to conduct the audit and implement the

majority-supported proposal. To ensure
the audit is effectively carried out andcan inform appropriate solutions toimprove worker health and safety,
we signed, together with a group ofinvestors, a joint letter that was sent to
the Chairman of the Board.
Moreover, considering the significanceof the social risk on the company’s
long-term performance, a downgradeof the company’s ESG rating was
requested and approved, in line with
our internal scoring methodology. We
will monitor future implementation of
the Board’s resolution and may decideto further downgrade the company’s
rating should the Board responsivenessto shareholder concerns be deemed
unsatisfactory.

AXA IM Stewardship Report 2023 49

Voting

Voting: Key 2023 Data
Our approach to environmental and social proposals
Management environment al andsocial proposals
As in previous years, we also had theopportunity in 2023 to express our views on thesustainability strategy of investee companies
via dedicated management-sponsored
resolutions, such as so-called say-on-climate
resolutions (or their resulting progress reports)
as well as sustainability reports. A new type ofclimate proposal encompassing companies’
biodiversity plans also emerged.
In 2023, we voted on a total of 58 managementsponsored environmental proposals, including
24 say-on-climate and 33 sustainability
reports. We opposed seven of them. Although
this remains marginal compared to the total
number of management resolutions votedon (51,797), we expect this trend to continue
gaining traction, especially in Europe withthe transposition by EU Member States of the
Corporate Sustainability Reporting Directive.
When analysing say-on-climate resolutions, werefer to the expectations detailed in the AXA IM
Climate Risks Policy and Corporate Governance& Voting Policy, where we urge companies to:• Commit to a net zero emission strategy, withshort-, mid- and long-term carbon emissions
reduction targets that are based on climate
science. There should be a clear explanationof corresponding capital allocation plans• Integrate the company’s entire value chain in
the climate strategy• Perform scenario analysis using a scenario
where global warming is limited to the Paris
Agreement goals• Align executive remuneration to climatechange objectives
We expect companies submitting theirtransition plans to a shareholder vote tocommit to a regular vote on such strategy andits implementation. We also expect boards tocarefully consider the results of shareholder
votes and follow up on them.

50 AXA IM Stewardship Report 2023

Case Study
Say-on-climate at BP

BP’s net zero strategy, published in
2020, implies a radical corporate
reorganisation with the intention toshrink its upstream division (largely
by disposing assets), massively growits renewable power operations, aswell as increase the scale of its clientfacing units to sell more low-carbon
products.
The strategy was submitted to ashareholder vote for the first time at
the company’s 2022 AGM, receiving
88.5% support. However, in early
2023, BP announced a scaling backof its plan to cut oil and gas output
in 2030 from 40% to 25%, due toits decision to sell less assets thaninitially planned. The announcement
and revised targets, contrary to what
was included in the climate strategy
voted on at last year’s AGM, raised

concerns about how the company
communicated to its shareholders andhow it is considering their votes, asdeviating from a previously approved
plan without consulting shareholders
again makes the idea of a say-onclimate irrelevant.
In this situation, we believe BP shouldhave formally requested shareholders’approval in the light of the changes
to the strategy. Even though advisory,
the say-on-climate put to a vote lastyear attracted significant support andthere was a clear expectation that thestrategy would follow what had beenannounced.
As such, we decided to oppose there-election of the Board Chair for what
we consider a departure from good
governance practices.

Case Study
Say-on-climate at Santos

Australia-based oil and gas company
Santos submitted its climate strategy
to a shareholder vote in 2022.
While such votes generally receive
comfortable investor support, Santos’
say-on-climate recorded 37% of‘against’ votes including from AXA IM,
among the highest opposition levels
globally, due to a lack of scope 3
emissions reduction targets.

Despite such shareholder discontent,
the company continues to be reluctant
to set any scope 3 emissions reduction
targets. Therefore, considering
the lack of board responsivenessfollowing last year’s say-on-climate
vote, we decided to oppose there-election of the CSR committee
member up for re-election at the 2023
AGM.

AXA IM Stewardship Report 2023 51

Voting

Voting: Our priorities and plans
The voting process
We consider voting to be a crucial aspectof being an active shareholder – it is avital part of the investment process andan opportunity to influence companies.
Our voting and engagement activities areclosely aligned, and we regularly engage
companies before and after any vote.
Our Corporate Governance Committee
is responsible for overseeing theimplementation of AXA IM’s Corporate
Governance & Voting Policy. The policy
is reviewed and updated annually by
the Committee prior to voting season, toapply to all meetings going forward.33
The committee comprises regulatory
and compliance professionals, membersof the corporate governance and RI
research teams as well as investment
team representatives, who bring
their experience to the committee’s
deliberations. The corporate governanceteam proposes updates to the policy whenneeded, and oversees the implementationof the policy and guidelines, ensuring
they are in line with the committee’s
expectations.
Where there are complex, controversial,or non-routine cases, or where we may
wish to deviate from our policy, the teamconsults and makes recommendations
to the committee. The relevant teammembers will set out an explanationof the issue in question and make theirrecommendation. The committee
members deliberate independently
and provide their views and/or
recommendations.

We vote against items on the agenda atannual meetings where we believe theproposals are not in the best interestsof our clients. This covers a wide rangeof concerns such as the suitability of
individual directors, board oversight of
key risks and strategy, executive pay,
dividend and capital-related issues as well
as diversity, transparency and reporting.
We also vote against proposals as a method
to escalate our engagement where we feelinsufficient progress has been made.
While local best practice codes may
adopt different approaches, we expect allcompanies to seek to closely align with ourcore global governance principles which
set out the fundamentals of corporate
governance. With all companies, AXA IM
considers these principles in conjunction
with region-specific policies in our voting
and engagement activity.
At AXA IM we publicly disclose our voting. It
is updated on a quarterly basis. We provide
the rationale for why we voted against
management and, as of 2024, we will start
disclosing rationale for all votes against ashareholder resolution. The records containthe historical voting record at company
level and a rationale for all votes castagainst management recommendations.
These reports are available on our website.

Voting research

AXA IM uses voting information services
from Institutional Shareholder Services(ISS) and Proxinvest.34 The research 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 gatheredfrom engagement with the company,
fund manager input and committee
considerations. Voting decisions are madeby AXA IM and are based on our Corporate
Governance & Voting Policy.
To ensure 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.

Stock lending

Stock lending aids market liquidity andallows clients to maximise revenues fromtheir holdings and is a technique used by
AXA IM. However, the attendant transferof voting rights along with the lent sharesmeans that additional scrutiny is required toensure lent shares are not put to purposes
detrimental to the long-term interests of theshareowner.
Shares will not be lent where the objective ofsuch activities is to vote at general meetings.
As lending agent, we intend to recall all
shares, ahead of the record date (where therecord date is not backdated) in advance ofgeneral meetings to exercise our full voting
right for open-ended funds and mandates.
Ongoing securities’ transactions aremonitored by the securities lending team.

Conflicts of interest

We have adopted a set of guidelines to
identify circumstances which may give rise
to conflicts of interest, leading us to identify
the following major potential conflicts ofinterest with respect to our stewardship
activities:• With our parent company, AXA SA• With a sponsor company
33
34

Unless instructed differently by a client
An independent voting advisory service has also been appointed to take voting decisions on behalf of our third-party clients at the general meetings of ourparent company, AXA SA

52 AXA IM Stewardship Report 2023

• With a key client• With a company that is a significant
distributor of AXA IM’s product(s)the policy position in these cases will
be supported by a written record. An
independent voting advisory service has
been appointed to take voting decisions
on behalf of our third-party clients at thegeneral meetings of our parent company,
AXA SA.
A full copy of our conflicts of interest policy
is available on our website.

• Between clients• AXA IM, or one of our collaborators(or any person or company directly or
indirectly linked to them)By ‘conflict of interest’ we mean a situation
where the interests of AXA IM, of AXA IM’s
employees, of a third-party delegate or a
related company are, directly or indirectly,
in competition with the interests of one orseveral clients. It also pertains to potential
conflicts that may occur between AXA IM’sclients.
We manage conflicts within our voting andengagement activities using the following
approach:• Engagement: AXA IM’s engagement
programme is supervised by the ESG
Monitoring & Engagement Committee,
under the oversight of the Sustainability
Strategic Committee. This seeks toensure that decisions to engage arealigned with the engagement strategyof AXA IM and are free from any outside
influence• Voting: In identified situations ofconflict, AXA IM’s Corporate GovernanceCommittee has sole responsibility formaking voting decisions on behalfof clients who have given AXA IM full
discretion to vote. Voting decisions
are taken prior to any reference or
discussions with clients who have notdelegated voting rights to the Corporate
Governance Committee or have their own
policy. This seeks to ensure decisions
are free from outside influence.Where
potential conflicts of interest have been
identified, recommendations to votein support of management resolutions
contrary to our regular policy position
will be escalated to the Corporate
Governance Committee. Any decisionby the Committee to vote contrary to

Case Study
Conflict of interest: Timecommitments

In this instance, the company is among
AXA IM’s largest clients. We voted against
our proxy advisor’s recommendation and infavour of management.
Strict application of AXA IM policy on
so-called ‘overboarding’ (directors
sitting on too many boards) should have
led to an opposition of one particular
director’s election at the company’s 2023
AGM. However, this director had alreadycommitted to not seek renewal of theirmandates at two external companies,
and the company’s Board decided not toappoint them on any of its committees
until then. The Corporate Governance teamrecommended the Corporate GovernanceCommittee to consider:• The level of awareness of the board andthe various commitments taken• The fact that their remaining outside
non-executive director mandate will beat an investment holding company, andthus support their election, which wasvalidated by the committee
However, another director, up for reelection at this AGM and Chair and CEOof an external company, was previously
elected to the board of a third company- leading to an excessive total number of
mandates as per AXA IM voting policy.
This prompted the Corporate Governanceteam to oppose their re-election on thecompany’s Board.

Case Study
Conflict of interest: Climate
shareholder proposal

In this instance, the Chairman of thecompany sits on the Board of Directorsof AXA IM’s parent company, AXA SA.
We voted against our proxy advisor’s
recommendation and in favour ofmanagement.
At its 2023 AGM, the company received
a shareholder proposal requesting
the Board of Directors to submit to ashareholder advisory vote its climate
strategy, as well as the progress made,and to publish a detailed climate report.
We voted against this shareholder
proposal, despite our proxy advisor's
recommendation to support it.

We have a long-term engagement withthe company, and regularly discuss
the climate topic, including before the2023 AGM. Following the filing of theshareholder proposal, the company
committed to a vote every three years
on its climate strategy and published anaddendum to its TCFD report including
further information on scenario
analysis and capital expenditure plans.
Therefore, supporting the shareholder
proposal was no longer deemed
relevant.
After receiving the Corporate
Governance Committee approval, we
voted against the shareholder proposal
at the 2023 AGM.

AXA IM Stewardship Report 2023 53

ESG Integration into platforms

Putting ESG to work
AXA IM is a long-term, responsible
investor with the aim of delivering
sustainable returns for clients. Over time,
our investment processes have evolved
to reflect an ever-greater focus on nonfinancial factors. We believe by building a
powerful understanding of the ESG risks toan investment, we can better target thosesustainable returns while contributing tobetter 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.
Our quantitative and qualitative ESG
research is designed to help us better
understand the materiality of ESG
challenges for sectors, companies,and countries. This research feeds our
integration and exclusion strategies byidentifying where assets might be exposed
to ESG risks that could have a detrimental
and irreversible effect on the performanceof our portfolios, as well as on long-term
global sustainability. Our normativeand sectorial exclusions, applied tothe majority of our actively managed

funds, set the red lines and send a clear
message to companies and sovereigns
on what we consider unacceptable froman ESG perspective. For assets where weremain exposed, we apply our voting andengagement strategies with the objectiveof supporting issuers in their transition
journey.
In applying our stewardship strategy, forengagement with objectives, we aim toset out meaningful objectives which areclearly communicated to management.
We then hold regular meetings to verify
and evaluate progress and we vote withconviction or pursue other escalation
techniques when required.

Our risk identification process
Our broad approach tosustainability risks‒Social: Health (tobacco producers),
labour, society and human rights(violations of international norms
and standards);35 controversial
weapons manufacturing; white
phosphorus weapons producers;
exclusion of investments insecurities issued by countries
where serious violations of humanrights are observed‒

Governance: Business ethics(severe controversies, violationsof international norms andstandards); corruption (severe
controversies, violationsof international norms andstandards)

AXA IM uses an approach to sustainability
risks derived from the integration of ESG
criteria in our research and investment
processes in accordance to their SFDR
or equivalent classification. We have
implemented a framework to integratesustainability risks in investment decisions,which relies notably on:• Sectorial and normative exclusions
policies covering ESG factors to exclude
assets exposed to the most severe
sustainability risks identified during ourinvestment decision-making process‒

35

Environmental: Climate (coalmining and coal-based energy
production; oil sands production
and oil sands-related pipelines;
shale and tight oil and gas; arctic oil
and gas); biodiversity (ecosystem
protection and deforestation); andsoft commodities (food commodities
derivatives)• Proprietary ESG scoring
methodologies:‒

On listed assets, we apply ESG
scoring methodologies forcorporates, sovereigns and on
green, social and sustainability
bonds. We use an ESG scoring

methodology called Q²(qualitative and quantitative)
which relies primarily on index
provider MSCI with some
proprietary add-ons whichconstitute the value-added of
AXA IM’s ESG scoring capacity:
coverage, fundamental
analyses, and instrument-level
differentiation;‒

Specific ESG scoring
methodologies have beendeveloped for real assets(direct real estate property,
infrastructure debt & equity,commercial real estate (CRE)
debt), as well on alternative
credit and private debt scoring
methodologies (i.e., leveragedloans, collateralised loan
obligations (CLOs), asset-backed
securities (ABS), insurance-linked
securities (ILS), regulatory capital(RegCap), non-performing loans(NPL), our impact investments (incompanies, projects and funds),

UN’s Global Compact Principles, International Labour Organization’s (ILO) Conventions, OECD Guidelines for Multinational Enterprises and the UN Guiding
Principles on Business and Human Rights (UNGPs).

54 AXA IM Stewardship Report 2023

and non-listed private equity anddebt through our subsidiary CAPZA);‒‒

On funds of funds or funds of
mandates managed by AXA IM
Select36, ESG scores are assigned
at manager and fund level. Those
ESG scores are the result of an
ESG due diligence covering fourareas: i) policy and governance ii)
ESG integration iii) engagement
and stewardship, and iv) risk andreporting;On funds of funds managed by
AXA IM Prime, ESG scores areassessed at manager and fundlevel through proprietary ESG
Due Diligence & Monitoring
Questionnaires (DDMQ) assessing
firm and fund responsibility forprimary and co-investments for all
AXA IM Prime verticals (i.e., private
markets, including private equity,
private debt, infrastructure, andhedge funds), as well as direct
strategies (general partner level
scoring). A tailored approach applies
to secondaries investments.
We believe this combination of
external quantitative and internal
qualitative ESG analysis helps us
identify best-in-class companies –and laggards too. The use of ESG
scores in the investment decision
process should enable us to focus
on assets with an overall better ESG
performance and to seek to reducesustainability risks.

This framework is complemented by:• In-house ESG research37 on key
themes including climate change,
biodiversity, gender diversity andhuman capital, responsible tech aswell as on human rights and corporate
governance, supported by broker

research as well as regular meetings
with companies, participation in
conferences and industry events. We
think this research helps us to better
understand the materiality of these
ESG challenges for sectors, companies
and countries• Internal qualitative ESG and impact
analysis at company, country andinstrument level. For impact-related
investments, we have developed specificImpact Qualitative Analysis frameworks
for listed equities and Green, Social andSustainability Bonds• ESG KPIs: Investment teams have accessto a wide range of extra-financial data
and analysis on ESG factors, across asset
classes• Stewardship strategy: We adopt anactive and impactful approach tostewardship38 (engagement and voting)by using our scale as a global investment
manager to influence company andmarket practices. In doing so, we strive
to reduce investment risk and enhance
returns as well as driving positive impacts
for our society and the environment.
We believe these are key to achieving
sustainable long-term value creation forour clientsControls

The ESG and climate themes are coveredby AXA IM’s control framework, withresponsibilities spread between thefirst level of controls performed by thebusiness and second level of controls
performed by dedicated teams.
ESG-related investment guidelines consistof our exclusion policies, as well as ofeligibility criteria and rules specific to somefunds, including those which have been

awarded sustainability-related labels.39
Monitoring is carried out as follows:• The portfolio management teams
are primarily responsible for the
implementation of policies andcommitments. Funds’ specific RI
objectives are reported in monthly
Investment Oversight Forums.
Following ban lists and/or eligible
universe updates, portfolio managers
divest from issuers taking into accountthe client’s or the fund’s best interest• The investment guidelines teamensures independent and systematic
pre- and post-trade controls on policies
and fund-level commitments. This
team monitors the correct applicationof the exclusion lists derived from toplevel RI policies and ESG Standards,
sustainability-related labels and otherfund-specific commitments as mentioned
in their regulatory documentation• The compliance department carries out
ad hoc controls on the work performedby the investment guidelines team, butalso makes sure that RI internal processes
are respected, and ensures compliancewith regulatory requirements in AXA IM’s
RI strategy• The risk management department
assesses the likely impact of sustainability
risks on the products’ return and classifies
them within three levels: Low, Mediumand High40• The audit department performs periodic
controls. Audits are performed according
to an annual risk-based audit plan,
which is approved and monitored byour governance bodies, in particular
the AXA IM Audit & Risk Committee.
Higher risk areas and those required byregulations to be covered regularly are
subject to audits on a more frequentbasis compared to the less risky areas,
which are covered over a longer cycle.

Previously managed by Architas and assets from AXA Group’s general accounts.
Sustainability, AXA IM, retrieved February 2024
38
Stewardship & Engagement, AXA IM, retrieved February 2024
39
Such rules are described in the regulatory documentation of the products.
40
Sustainable Finance, AXA IM, retrieved February 2024
36
37

AXA IM Stewardship Report 2023 55

ESG Integration into platforms

Putting ESG to work
Identification of Risks
The Emerging Risk Management
Framework aims to ensure theconsistency of the process ofidentification, assessment, mitigationand management of the emerging risks
faced by AXA IM.
Emerging risks are those which may
develop in the future, or which alreadyexist and are evolving. They are marked bya high degree of uncertainty, and some ofthem may even never emerge. Emerging
risks can have potentially serious
consequences if they are not anticipatedin a timely manner.
Chief risk officers are responsible forearly detection of risks. The objective of
emerging risk management is to reinforce

the anticipation and monitoring dimensionof risk management.
The Emerging Risk Management
Framework is designed to enhance AXA IM’s
understanding of these risks and allow
us to adapt our business and processes
accordingly. By encouraging a foresightapproach, it is also an opportunity for risk
management functions to contribute to thestrategy of the company.

Emerging risk definition
Emerging risks are those which could
potentially be impactful in the next fiveto-10 years. They are defined as either
new risks, or risks that already exist but

one or more of the components of therisk’s current dynamics are not adequately
understood, be it hazard, exposure and/or
vulnerability to the hazard.

Emerging risk framework and2023 outcomes
The Emerging Risk Management
Framework includes:• Risk identification: The risk
identification is performed throughinterviews with key stakeholders froma large number of AXA IM departments(including investment platforms,
client group, legal, the regulatory
development team, innovation team,responsible investment team, Human
Resources, etc.) and with inputs fromAXA IM executives• Risk Prioritisation: All risks areassessed according to their severity
and their impact time horizon. Risks
are then prioritised using the severity
assessment performed, and basedon any other relevant prioritisation
criteria• Mitigation actions: As part of thisexercise, existing mitigation plans are
identified, and new mitigation plans
are agreed where relevant
The outcomes of the emerging risks
exercise are discussed at the AXA IM
Global Risk Committee. Since 2022, wehave been progressively integrating
the identification of ESG-related risks
withing our Emerging Risk Management
Framework. As such, risks related to ESG,
including climate change, biodiversity andmore broadly linked to the deploymentof sustainability-related regulations
are included in the top emerging risks
identified for AXA IM. To mitigate theserisks, a specific internal governance is now
in place, involving stakeholders dedicatedto sustainability-related topics.

56 AXA IM Stewardship Report 2023

AXA IM Core

We believe the consideration of nonfinancial factors, specifically ESG issues,
can help us deliver sustainable returns
over the long term.
There are four key reasons why we believe
considering such factors is important:• They can help identify companies withserious ESG risks• They can help improve ourunderstanding of how long-term
issues are integrated into a company’s
strategy• They allow us to refocus portfolios
around companies we think have
implemented good practices in terms of
their ESG impact• They can inform an active dialogue
around the management of ESG issues,potentially helping improve companies’
performance and thereby limiting ourongoing exposure to risks
AXA IM Core has a comprehensive andproactive approach to integrating ESG
factors into the decision-making processacross equity, fixed income and multiasset platforms. This approach, which
consists of the three pillars below, not only
allows us to assess risk and return more
systematically but also has the potential tocreate positive impact and contribute to amore sustainable future.
1. ESG data & research: Integration of ESG
data & qualitative analysis to evaluate
investment risks and opportunities aspart of the investment process
2. Exclusions: Apply Top-level and ESG
Standards exclusions to mitigate
adverse ESG risks and set clear
standards for sustainable investing
3. Stewardship: robust & measurable
voting and engagement, where wefocus on strategic ESG issues andengage with companies before risksmaterialize
41

In equity portfolios managed with aquantitative approach, ESG scores and key
performance indicator targets are added to
traditional alpha and risk measures. This
ensures the highest ESG rating is favoured
in portfolio construction when facedwith identical stocks from a traditional
investment perspective. In addition, ourresearch has shown that boardroom
diversity influences companies’ profitability,
and as such, we explicitly consider diversity
in our proprietary models to measureearnings quality. This approach, which
consists of the three pillars below, helps
us to manage risk effectively and create apositive impact by investing in companies
which prioritise ESG factors.
In equities managed with a judgmental
approach, the investment teams work
closely with dedicated equity ESG &Impact analysts. These experts conduct
their proprietary fundamental research on
extra-financial criteria of companies underinvestment consideration. Their role is toanalyse corporates on ESG considerations
from both a risk and opportunities
perspective. In addition they perform
impact assessments on companies todetermine eligibility for inclusion in ourlisted equity proprietary Impact universe.
In fixed income, our credit analysts use ESG
measures to identify material concernsthat could impair the credit quality andlong-term sustainability of issuers. By
incorporating a wide range of ESG factors
into credit analyses, we can identify thoserisks most relevant to credit investors andpotentially minimise downside risk. ESG
factors are also important for sovereignand quasi-sovereign debt and are therefore
integrated into our investment process,with different quantitative indicators forsovereign issuers to corporate issuers.
The Multi-Asset platform leverages the ESG
integration within the Equity and Fixed
Income platforms. We actively participate
in sustainability dialogues with company
management to encourage responsible

corporate behaviour and disclosure practices.
We believe this approach not only creates
positive impact but can also potentially generate
long-term benefits for our clients.
As of the end of 2023, AXA IM Core managed€399bn in assets which integrate ESG
criteria. Furthermore, €35bn of assets undermanagement have been awarded with the
French sustainability label ISR41 and €7.8bn
with the Belgian Towards Sustainability label.

Our fund and strategy offering
Our mission is to meet the ever-increasing
demand from clients through a comprehensive
and innovative range of strategies and openended funds, many of which place sustainability
at the heart of their objective and therefore go
beyond mere ESG integration. Our range has
also been designed in line with AXA IM’s overall
priorities such as climate and biodiversity, andincludes:1. ESG integrated strategies where investment
teams take account of ESG risks andopportunities when making investment
decisions and where ESG is embedded in
the investment process to help achieverisk-adjusted returns. In most cases ourportfolios also explicitly include an ESG score
objective and/or targeted ESG characteristics
2. Our ACT funds which are designed to create
long-term sustainable value for clients whiledriving meaningful change for society and theenvironment. As of the end of December 2023
this includes 25 funds and two ETFs, each
investing with focus on Planet or People, orPeople and Planet. Within ‘Planet’ we manage
portfolios focused on decarbonisation (e.g.
carbon transition fixed income) as well as
portfolios investing in client solutions (e.g.
dedicated biodiversity equity).
3. A range of equity and credit Paris Aligned
Benchmark (PAB) ETFs launched in 2023 tocater to clients who wish to achieve theirgoals using the PAB framework within an
ETF wrapper.

Based on the second version of the Label ISR rulebook, as of end 2023.

AXA IM Stewardship Report 2023 57

ESG Integration into platforms

AXA IM Core
EquityBeside ESG qualitative analysis, a
dedicated team of analysts conducts
impact analysis on companies according
to a five-pillar proprietary framework.
As a member of the advisory committeeof the Global Impact Investing Network(GIIN), we contributed to the Guidancefor Pursuing Impact in Listed Equities
published in March 2023. Our impact
investment analysts use our proprietaryimpact research framework to assess
the contributions of companies toenvironmental and/or social objectives
and the UN SDGs. This framework isbased on five pillars which are specific
to impact investing and is used in our
impact funds to identify companies
contributing to funds’ predefinedtargeted impact objectives.
Through our research, we seek to
identify ‘Impact Leaders’ – the highestrated companies in terms of delivering
positive societal impact. We typicallyfocus on companies selling criticallyimportant goods and services andwhich generate significant additionality
by leveraging technology, scale orinnovation to make goods and services
accessible and commercially viable inpotentially underserved markets. We
believe our in-depth impact research,when integrated into our traditional
company and financial analysis, is a
powerful tool to identify potential longterm winners.

58 AXA IM Stewardship Report 2023

Case Study – Social progress investment strategy
AXA IM's social progress strategy isbased on an impact investing approachthat aims to have a direct and positiveeffect on society while contributing to amore sustainable future. This strategy
invests in publicly listed companies
addressing a range of social needs – andwhich demonstrate a strong impact andclear alignment with social UN SDGs.
Investment areas include affordable
housing, financial inclusion, access tohealthcare solutions, nutrition, safety,
education and entrepreneurship.
To define the investment universe, AXA IM
applies a socially responsible investment
selectivity approach, along with aqualitative impact framework to evaluate
the alignment of company activities to
UN SDGs and quantify their impact onsocial issues. To comply with the French

Engagement and voting

We conduct thematic projects aimed at
supporting companies to reduce their
negative externalities, to deliver positive
impact and improve impact-related
disclosures. We conduct engagementwith issuers and track progress –achieving effective change can taketime, and we define a timeframe which

ISR label’s updated guidelines, the fundcommits to outperform its benchmark on
two key performance indicators – carbon
intensity and water intensity. The fundalso applies additional exclusions on
unconventional and conventional oil andgas, power generation, coal, tobacco,and weapons to comply with the QS 2021
Towards Sustainability label.
By adding environmental objectives
to this social-focused strategy, AXA IM
ensures the social objective does notcome at the expense of environmental
performance. Using an unconstrained,
multi-cap strategy, the aim is to invest in
publicly-listed companies in developedand emerging markets offering highgrowth potential and that focus onproviding services across a range ofsocial needs.

we consider reasonable for achieving
these objectives, depending on thenature of the change we are targetingand the underlying concerns. These also
differ according to country, issuer andrelevant thematic area. These thematic
engagement projects mainly aim tosupport our equity strategies within the
ACT range in delivering more impact.

AXA IM CoreEngagement status

Case Study – Regeneron Pharmaceuticals

Company responds

Engagement approach: Engagement with objective
Engager:Core ESG and Impact Research

In 2023, we began a sustainability dialogue
with Regeneron Pharmaceuticals, a USbased biotechnology company providing
antibody and protein-based therapeutics
to help patients with life-threatening,
infectious, and rare diseases. In our firstmeeting with Regeneron, we covered
the company's pricing policies, access to
medicine initiatives and impact-related
KPIs.
Regeneron expressed a commitment
to a value-based approach inpricing new medicines, considering
long-term investment and risks

inherent in scientific innovation. In
this context, the company stressed
its commitment not to increase
the price of its top-selling product,
Eylea, notwithstanding the ongoing
substantial research and development
investments to support approval
for additional medical conditions.
We also discussed Regeneron’scompassionate use programmes forearly patient access to make certain
medicines available to eligible
patients before they are commerciallyavailable, as well as other financial
assistance initiatives. In terms ofimpact related KPIs, Regeneron
confirmed its continuous monitoringand estimation of the number ofpatients impacted by its products,
building on conservative estimatesfrom 2022 and aligning with its
commitment to enhance transparency
and accountability in this aspect.
Overall, we appreciated thecompany's responsiveness andcommitment to ongoing discussions.
We plan to monitor significant
developments for future engagement
opportunities.

AXA IM Stewardship Report 2023 59

60 AXA IM Stewardship Report 2023

AXA IM Core
Fixed income
Corporate ESG analysis
In AXA IM's credit process, analysts use
a qualitative ESG template to assign aview on company management andmomentum around ESG issues. Credit
analysts highlight ESG strengths andconcerns, ESG KPIs and governancestructure, with the key ESG topics, risks
and KPIs highlighted at the discretion of
the analyst, allowing them to select topics
most relevant to the issuer. AXA IM uses aframework to assess the transition planof investee companies in line with our
net zero commitment. The framework
leverages quantitative information fromthird-party sources and qualitative analysis
to confirm the credibility of the strategies.
The credit research team reviews past
decarbonisation performance, forwardlooking measures, and capital allocationin the context of sectoral and geographicalcharacteristics to identify leaders and those
lagging in achieving net zero.

Case Study - Climate colours engagements
Our US credit team annually defines
a focus list of companies, prioritising
issuers designated ‘red’ or ‘orange’
by our proprietary climate colours
framework as described in our TCFDArticle 29 Report. They accounted for

NOT COVERED/NO DATA

CLIMATE LAGGARDS▶ Qual: coveredby analysts▶ Quant: Cl available

42% of engagements (including both‘Engagement with Objective’ and‘Sustainability Dialogue’) conductedby the US credit team over the courseof 2023. When looking specificallyat Engagement with Objective,

EXPLICIT
NET ZERO (NZ)
INTENTION▶ Qual: corporate NZ
communication▶ Quant: CO2 targets(MSCI) TPI ≥1, NZ
membership

CREDIBLE TARGETS &NET ZERO ENABLERS▶ Qual: capex and NZ
business plan + a few
transition enablers▶ Quant: TPI≥3 SBTi
committed SDG-7/13= 10

engagements with ‘red’ or ‘orange’
accounted for 60%.

ON TRACK/RESULTS▶ Qual: analysts
challenging SBTi anddeep-dive in material
scope 3▶ Quant: SBTi validated,
TPI=4, CI currently
below/close
to sector pathway, CI
reducing at NZ pace

AT NET ZERO▶ Quant: CI currently
consistent with 2050
sector target

Source: AXA IM climate colouring system, based on PAII Net Zero Investment Framework, 2021.
CI = carbon intensity; TPI = Transition Pathway Initiative. For illustrative purposes only.

AXA IM Stewardship Report 2023 61

ESG Integration into platforms

AXA IM Core
Fixed income
Sovereign ESG analysis
Analysts and portfolio managers haveaccess to sovereign ESG scores and
ESG-related KPIs in their front officetool as a complement to traditional
macroeconomic country analysis.
We believe a full assessment of each
ESG pillar is necessary to understandthe impact of ESG factors on longterm economic sustainability. For
sovereigns, among key ESG topics,
we have particularly targeted CO2
emissions, energy use, renewable energy
consumption and the water exploitationindex score.42
Discussions also take place withsovereign issuers on ESG topics during
regular meetings with Treasuries,
agencies, central banks and othergovernment ministries as well as during
the process of green and social bondissuance. All offer an opportunity todelve into sovereigns’ public spending
programmes around sustainability andto better understand a country’s ESG
risks. In 2023, we had 17 engagement
discussions with 15 quasi-sovereigns,
governments, agencies andsupranational issuers.

Green, social and sustainability
bonds engagement

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

Our engagement goals andactivity

We met with 98 GSSB issuers in
2023. Beyond alignment with therecommendations of the International
Capital Market Association’s Green Bond

42

Case Study - Japan's Government
Engagement approach:
Sustainability Dialogue
Engager: Core Sustainability Analysts

We met with Japan’s Government todiscuss transition financing because of
its push to fund a green transformation
through a specifically-labelled bond. We
provided feedback on its plan to label thebond as a transition bond although there
are components of green. For example,
a portion would fund renewable energy
which is considered a green activity andnot a transition activity. We affirmed that
this was in line with our expectations as we
do not want activities financed by a green
bond that are not actually green included,
while we find it acceptable to include
greener activities within a transition bond.
We also clarified that we support theuse of the label ‘transition bond’ inthe market, contrary to other actors
who prefer only a green label that
accommodates a spectrum of activities,some of which can be brown – which we
believe may engender issues of credibility
and greenwashing. We reiterated
our willingness to invest across the
spectrum of the low-carbon transition
once projects are labelled accordingly.
We discussed with the issuer our vision
for what transition means, highlighting

Principles, our main area of focus wasto discuss GSSB alignment with issuers’
sustainability strategies and forwardlooking ambitions.
We have seen some positive outcomes.
More and more issuers establishedconcrete ESG objectives and disclosed itwithin GSSB frameworks. On the other
hand, given our higher expectations,that any transition financing instrument
needs to exemplify an ambitious
sectorial decarbonisation pathway using
best available technologies and should
not engender lock-in of carbon intensive
assets in the economy.
We would expect transition instruments
to fund projects that deliver significant
efficiency gains. We also mentioned our
openness for frameworks to be broad
by including categories or projects forwhich technologies are not yet widely
scalable as it leaves room for flexibility.
However, we also highlighted that as
new technologies become available forthe sector, frameworks and transition
plans should be updated accordingly torepresent a decarbonisation pathway
using best available methods. We
suggested any limitations should behighlighted in the issuer’s roadshow
materials, framework or reporting.
This was a very positive discussion
with the Japanese Government, which
took our feedback and expectations
into consideration when finalising its
sovereign transition bond framework.
We also participated in a seminar during
COP28 along with representatives of
the Japanese Government, to share ourviews on the role of sovereign bonds intransition financing.

poor ESG profiles and ambitions atcertain issuers were a significant factor
in our deciding that some GSSB issuance
was not eligible under our definition in2023.
Another key topic of discussion withGSSB issuers in 2023 was around theinclusion of the EU Taxonomy and of theupcoming EU green bond standard in

The European Environment Agency’s water exploitation index measures the mean annual total demand for freshwater divided by the long-term average
freshwater resources.

62 AXA IM Stewardship Report 2023

AXA IM Core
Fixed income
market practices.43 While it is still too earlyin our view to expect all issuers to align withthese new requirements, we neverthelesshave seen positive developments on
this front. Issuers like French utility
Suez, France’s postal service La Poste,
the European Investment Bank and theRepublic of Austria have all included the EU
Taxonomy technical criteria in their green
bond frameworks.
In 2023, we developed our assessment
framework for Sustainability-Linked Bonds(SLB). This market is still nascent, but we
had the occasion to share our views andexpectations with some SLB issuers as wellas other market stakeholders. We met with
12 SLB issuers in 2023, which allowed us tobetter identify good practices and clarify
our expectations with this market.

Bondholder meetings
In 2023, AXA IM voted at five GSSB
bondholder meetings, on 11 resolutions.
One of them was related to areclassification of a conventional bond to agreen or social bond.
Bondholder meetings allow the issuer
to submit to a vote any question related
to the bond. These may include routine
resolutions requesting additional
documents, but also the increasingly
frequent case of reclassification of aconventional bond as a green, sustainable
or social bond.
Any vote on the reclassification of aconventional bond will be decided incollaboration with the ESG fixed income
analyst, who will review the proposal (via
the bond's framework) and give an opinion.

Case Study - Green bonds issuers engagements
In 2023, we started an engagement
programme with existing green bondissuers that appear to be lagging interms of their environmental and climate
policies and strategies – notably withregards to our increasing expectations in
those areas to ensure consistency withgreen bond issuances.
We identified six banks that are frequent
green bond issuers and sent them eacha letter requesting engagement andstrengthening of their coal/climate
financing policies:• Mitsubishi UFJ Financial Group (MUFG)• Bank of China (BoC)• Sumitomo Mitsui Financial Group(SMBC)• Agricultural Bank of China (ABC)• Industrial & Commercial Bank of China(ICBC)• China Construction Bank (CCB)
The outcomes of this engagement
programme were mixed. The Japanesebanks MUFG and SMBC responded

to our letter, and we had direct andinsightful discussion with SMBC. Bothseems open to dialogue and willing toprogress – particularly on SMBC’s side.
On the other hand, their Chinese peers’
response was mostly disappointing in
our view, except for ABC. We had anin-person meeting with ABC and eventhough we did not feel the company
had a strong alignment with our
expectations, at least dialogue was
opened.
While we contacted BoC, ICBC and CCB
several times via letter and throughother channels such as investor relations
and underwriting banks, we did notreceive a response to our engagement
request. As a result, we considered thisas failed engagement and downgraded
our opinion on their green bonds tonegative. We will continue engagementwith the remaining banks and may
adjust our opinion on their green bonds
depending on their future progress on
our requests.

Outlook for 2024
In 2024, we will continue work on
GSSBs and engage with issuers toensure compliance with eligibility
criteria. The same discussions will be
had with SLB issuers and opportunities
to influence the development of
the market and framework will be
reviewed. In fixed income markets, weplan to review escalation techniques
specific to large fixed income investors
and monitor the use of the EU
Taxonomy in the issuance of green andsustainability-linked bonds. This work
will also support our participation to
EU Platform on Sustainable Financework.

AXA IM has been involved in discussions
with other parties (investors, banks andissuers) in accordance with the Green Bond
Principles, since the end of 2022. We willcontinue to pursue this in 2024 in order todefine best practices.
43

The EU Taxonomy is a European Union regulation. It is effectively a list of business activities which companies and investors can legitimately claim are‘climate friendly’. Ultimately, this should allow investors to make more informed and consistent comparisons between companies, based on the shareof Taxonomy-aligned activity in their day-to-day operations.
AXA IM Stewardship Report 2023 63

ESG Integration into platforms

AXA IM Core
Fixed income

Case Study - Green bonds investment strategy
The launch of our global green bonds strategy
in 2015 reflected AXA IM’s commitment to help
contain climate change and support the growthof the green bonds market. This was reinforced
in 2022 with the launch of a new green bonds
strategy with a specific focus on emerging markets
and high-yield companies and the objective togenerate a measurable environmental impact inthese areas.
We have sought to build a robust eligibility
framework to ensure the new strategy is entirely
focused on green bonds that can potentially offer
the same returns as a comparable conventional44bond, with the added benefit of enabling projects
with environmental benefits in a transparent
manner. The green bond market has grown
sharply over recent years, and now offers morediversification in terms of asset classes, regions
and issuers.
A universal green bond definition is still in themaking, but several standards are being put
forward by major market actors.
The new global green bonds strategy was awarded
with the French sustainability label Greenfin and
the Belgian ‘Towards Sustainability’ label.44

Green, Social and Sustainability Bonds: An update on our assessment framework, AXA IM, September 2022

64 AXA IM Stewardship Report 2023

AXA IM Core
Multi Asset

Case Study - Multi asset optimal impact investment strategy
Within our Multi Asset Optimal Income
range, we manage an ‘Impact’ strategy
which is part of our ACT range and focuseson the theme of prosperity for people andprosperity for the planet, aligned with
relevant UN SDGs.
As a global multi-asset impact strategy,
it seeks to invest in businesses that focus
on providing products or services and/or
finance projects which have demonstrated
a strong positive impact on social andenvironmental factors, in addition to aclear alignment with the SDGs.
With regards to universe construction,
the strategy can invest in equities and45

in debt securities, notably GSSBs. The
investment process relies on two robust
impact proprietary frameworks tobuild the equity impact universe. Theseframeworks aim to assess the eligibility of
GSSBs while identifying and monitoring
the sustainability and SDG-alignment ofcompanies.
On top of AXA IM’s RI sectorial andnormative exclusions, the fund applies
additional exclusions on unconventionaland conventional oil and gas, power
generation, coal, tobacco and weapons tocomply with the Towards Sustainability
label. 45

Making sustainability in finance the norm, Towards Sustainability, retrieved February 2023
AXA IM Stewardship Report 2023 65

ESG Integration into platforms

AXA IM Core
Multi Asset

Case Study - Sanlam
Engagement approach:Engagement with objective
Engager: Core ESG and Impact Researchh

Sanlam is a pan-African financial services groupbased in South Africa that specialises in life andgeneral insurance, financial planning, retirement,
investments, and wealth management. In 2022,
Sanlam reported it had 50 million customers across
31 countries. The majority of its earnings, at 75%,
are generated in South Africa.
Insurance companies are key to a sustainablefinancial system due to their role as a risk manager,risk carrier and investor. Access to affordable
insurance is vital for low-income people and micro,
small and medium sized enterprises (MSME) as
an alternative to informal coping mechanisms,
helping them build resilience against economic,
social and environmental shocks. African countries
are arguably the most exposed to the risks
and devastating effects of climate change andeconomic uncertainty – and yet, they are the least
protected by insurance instruments.
Sanlam makes positive contributions to SDG 8.10
and SDG 10.2, providing insurance products inunderserved markets and promoting financial

66 AXA IM Stewardship Report 2023

and economic inclusion in Africa. The company's
partnerships with Capitec, MTN, and ShriramGroup have helped bring affordable insurance
and microinsurance products to underserved
customers. ESG integration in investment activities
is evidenced by the adoption of a responsible
investment policy, engagement efforts withinvestee companies, and the creation of ESG and
impact-focused funds.
ESG reporting practices are adequate, although wewould appreciate additional disclosures related
to the social impact of products, as well as aninventory of scope 3 emissions. Sanlam is exposed
to carbon-intensive sectors, but the company
is committed to gradually reducing the carbon
intensity of loan and investment portfolios.
We met with Sanlam to discuss initiatives forfinancial inclusion, development of sustainable
insurance and investment products, exposure
to carbon-intensive sectors, and ESG integration
in investment activities. While the company
demonstrates a commitment to positive impact
and responsible investment practices, we
encouraged the disclosure of impact metrics andfinanced emissions. We also recommended thecompany establishes clear objectives and monitors
progress towards these goals on an annual basis.

AXA IM Alts

Responsible investment sits at the core of
AXA IM Real Assets’ approach to business.
We actively consider financial and nonfinancial criteria during our investment
process – from origination of opportunities
to the investment assessment and decisionmaking process at acquisition, and throughto our active ownership of investments.
This integrated approach is fundamental to
the good stewardship of our investments.
By making specific non-financial
considerations part of our investment
processes, we believe we can ensure
better visibility of sustainability-relatedrisks and potential adverse impacts on ourinvestments. This visibility should provide
us with a broader perspective on asset andsector-specific risks which then informs
our underwriting and asset selection.
Ultimately, it also helps to shape our viewon investment risk, returns and liquidity,

and we believe it also enables our teams tobetter identify and unlock opportunities toenhance value for clients.
The integration of the assessment ofsustainability risk at investment level andthe application of group-wide sectorial
exclusions and ESG-scoring methodologies
can help us to address the most material
sustainability risks at the time of an
acquisition. From this position, we see
an important opportunity to improve theperformance of our investments throughactive management, stewardship andengagement. The goal is to amplify the
impact we can generate through ourinvestments while continuing to generate
sustainable long-term returns for ourclients.
Beyond meeting reporting obligations
under new and upcoming regulatory

requirements, AXA IM – alongside ourparent AXA Group – is committed tosupporting the goal of net zero as amember of the Net Zero Asset Managers
initiative. This means working with ourclients and partners to target net zerocarbon emissions from our investment
platforms by 2050, or before.
We acknowledge the scale of thischallenge and recognise that success will
only come through active collaborationand partnership. Accordingly, through2021 we undertook a series of structured
discussions across our investment
platforms to encourage companies,
borrowers and tenants to consider anddisclose their environmental strategy andperformance. These efforts were pursued
in 2022 with additional questions onenvironmental strategies and performance
progress.

AXA IM Stewardship Report 2023 67

ESG Integration into platforms

AXA IM Alts
Real Estate Equity
As users of the assets, the tenants of thebuildings under management are key
contributors in achieving the objectivesof the ESG strategy. We actively engage
with them, convinced that cooperation
with tenants is a necessary condition

for the implementation of relevant andeffective measures over the long term. It
has been demonstrated that the properuse of a building's facilities is a key factor
in reducing its environmental impact. For

this reason, it is essential to be proactive
in supporting tenants to make good useof building facilities and to provide themwith recommendations and good practices
to implement.

Our tenant engagement efforts are focused around three core areas:
LEARNING

MONITORING

Educating our tenants on ESG to
influence behavior and improve
buy inTENANT ESG
TRAINING

FIT-OUTGUIDE

ESGGUIDESESG
EVENTSGREEN LEASEINTEGRATIONSHARING
CONSUMPTION DATAWITH TENANTS

Maintaining a dialogue with our
tenants to understand their present
and future needs

TENANTSURVEYFEEDBACKSESSION WITHTENANTS

Learning

We distribute ESG guides to the tenantsof our assets to educate and increaseawareness of ESG issues and the specificfeatures of our assets related to ESG. Forcommercial tenants we provide fit-out
guides to aid in mindful procurement.
Through our ESG Rating we track thenumber of assets for which such tools are
already deployed.

Monitoring
We integrate an ESG clause (green lease)as standard to new contracts or contract
renewal to maximise the sharing of46

Collecting data on the asset andleveraging it to create targeted
solutions

LIAISING

consumption data from tenants and agree
on ESG targets and monitoring for thebuilding. We encourage the feedback ofconsumption data to tenants to further the
discussion of targeted solutions.

Liaising
We perform annual tenant satisfaction
surveys (see case study) to collectfeedback from our tenants on their user
experience and level of satisfaction.
Between 2021 and 2022, 435 assets
were included in such an initiativeacross Europe (excluding Switzerland),corresponding to €36bn of assets undermanagement - circa 95% of assets undermanagement in scope. We also promote
the deployment of an annual ESG
Committee, which is a meeting dedicatedto ESG between the asset manager, theproperty manager and the tenant. In
2022, 50% of assets under management in
scope report they have carried out an ESG
Committee with at least one tenant.46
We continually work to increase ourcoverage and further internal and external
integration of ESG by disseminating
ESG training throughout our chain of
stakeholders, from property managers tointernal asset managers.

AUM in scope exclude assets under development, platforms and assets out of scope such as forest, parking, plot of land and unit cells

68 AXA IM Stewardship Report 2023

AXA IM Alts
Real Estate Equity
Commercial real estate debt

For our Commercial Real Estate (CRE)
Debt platform, we sought to actively
improve the level of data visibility on
underlying assets to better inform ourview of environmental risks. Historically,
access to such data in private orsecondary markets has been poor, which
has hampered visibility of the efficiency
or underlying ESG performance of assets.
We undertook a two-step approach to
improve this.
First, we engaged with a third-party data
provider to assist with the assessment ofcarbon emissions, based on estimatedemissions per square meter for different
asset types in different countries. This
enabled us to generate an estimatedcarbon footprint for the portfolio. The
natural limitations of this dataset werethen addressed by including a second
step which involved structural dialogue
with our borrowers via a survey tocollect various ESG information and KPIs
including energy consumption.
2023 marks the third year in row where
the annual survey has been circulated.
The survey was sent out to over 40
borrowers, representing 58 loans valuedat €9bn. We received a 90% response
rate, representing some €8bn assets
under management as of 31 December
2023, which is a 42% year-on-yearincrease.
Information shared since 2021 has, forexample, helped us develop a deeper
level of insight into carbon and energy
efficiency-related risk in our portfolios,
in addition to our growing knowledge
base of physical and transitional risk.
The information will further informrefinancing opportunities and our ability
to work more closely with borrowers andunderlying assets in our journey towards
net zero before 2050.

Case Study
In 2021 we undertook the first EU-wide
tenant satisfaction survey project tobetter understand the current needs
and future expectations of the tenants
within our assets. Tenants are sent a
set of questions, through their property
manager, which assess tenants’satisfaction regarding their relationshipwith the property manager and ESG
topics. The scope is determined throughconsideration of several factors including
asset class, level of operational control,
and future investment plan.
Our target is to cover 100% assets undermanagement in scope on a three-year
rolling basis. Between 2021 and 2022, 435
assets were included in such an initiativeacross Europe (excluding Switzerland),corresponding to €36bn of assets undermanagement (circa 95% of AUM in
scope).
The aim of the survey is to establish an
ongoing dialogue with our tenants bymonitoring their views and integrating
their feedback into our asset level
actions plans. The output of the survey
is considered in the ESG strategy of theasset and the wider portfolio.

The survey is sent out by property
managers to tenants during the second
half of the year with the survey closing
to new respondents in November. In
December the property managers sharean analysis of survey responses, in linewith metrics provided by the Global Real
Assets ESG team. Using these results
AXA IM works in collaboration with ourproperty managers to identify areas of
future focus within ESG.
The survey questions were composed by
the Real Assets Responsible Investment
team, in line with requirements frommarkets standards e.g., Global Real
Estate Sustainability Benchmark (GRESB)
and certification schemes, as well asinternal metrics for property manager
performance. In 2022, this process wasrefreshed, with the questions asked
reduced to five from 10, to ease theprocess and ensure more accurate
feedback. The questions covered
satisfaction with the relationship with the
manager, the quality of services provided
and comfort levels, as well as focusing
specifically on ESG communication.
Feedback sessions were organised for the
beginning of 2023.

AXA IM Stewardship Report 2023 69

ESG Integration into platforms

AXA IM Alts
Listed Real Estate
sector as their reason for not submitting
to the GRESB survey. These firms
indicated their intention to submit
pending modifications by the reporting
entitySince 2021, we have been conducting
an annual survey as part of the active
stewardship of our listed real estate
investment platform.
The survey was sent to over 70
companies within the European listed
real estate universe to gain a better
understanding of their qualitativeand quantitative metrics associatedwith their ESG practices (including
biodiversity and social risk) andperformance. We are still collating thedata from the 2023 survey. Nonetheless,the results for 2022 survey are as
follows.

Carbon Risk Real Estate Monitor (CRREM)• 31% of the respondents reported use of
the CRREM tool, with some companies(e.g. Gecina, Segro) stating the current
set-up of the tool is not line with specificasset types
Physical risk
• 77% of the respondents declared they
undertook a portfolio level assessmentof physical risk. 15% of companies thatmonitor physical risk use MSCI's Climate
Value at Risk tool

GRESB
• Of the respondent companies 73% arecurrently submitting to the GRESB.
Several respondents recognised thecurrent and future significance of
GRESB in the market but cited its
limitations in assessing the residential• 92% of firms had determined carbon
reduction targets. 2030, 2040 and
2050 were common timeframes for

92%

100%
80%

ESG targets

92%
85%

77%

73%

62%

60%
40%

31%

20%
0%
GRESB Submission

Use CRREM

MonitorHave Carbon
Physical Risk Reduction Targets

Source: AXA IM Alts, Company data as at 24/11/2023.

70 AXA IM Stewardship Report 2023

Have Building
Monitor
Certification Biodiversity Risk

MonitorSocial Risk

carbon reduction, with several firms
specifying the breakdown between
scope 1 and 2, and scope 3 emissions.

Certifications• 92% of respondents reported havingsome portion of their portfolio having
a certification. However, firms citeda range of certifications – BREEAM;
Haute Qualité Environnementale(HQE); and Leadership in Energy
and Environmental Design (LEED);
though there was a lack of consensus
across the firms surveyed in terms ofscope (partial versus whole building
coverage). Furthermore, companies
used different metrics (percentage oflettable area, number of buildings,
percentage of revenues)

Energy performance• All respondents declared that noneof their investments in real estate
assets were involved in the extraction,
storage, transport, or manufactureof fossil fuels. However, 8% of
respondents reported that a few of
their residential tenants were utilising
gas heating• With regards to identifying inefficient
real estate assets, there was a notedlack of consensus of the definitionof an efficient asset (emphasising
the need for pan-EU consensus on
Energy Performance Certificate
levels). Companies reported disparate
readings with regards to exposure toenergy-inefficient real estate assets.
Shurgard had the lowest exposure at
15% with Icade having the highest at
89%

AXA IM Alts
Natural Capital and Impact Investments
The AXA IM Impact Investing strategy
targets the delivery of market ratefinancial returns alongside the generationof positive, intentional, and measurable
impact returns. Our guiding mission isto address the needs and aspirationsof underserved people globally while
protecting the natural environment andcontributing materially and directly to the
UN SDGs and targets that are relevant toour strategy.

ESG issues and identify areas where
improvements are needed.
The ESG assessment framework is
systematically applied to all ourinvestments. Where we identified
areas of improvement, we develop
Environmental and Social Action Plans(ESAP) in collaboration with investees,detailing actions to be undertaken in
relation to environmental and social
issues identified as part of investment
monitoring activities. The ESAP includes
responsibilities and timelines within whichcorrective action needs to be undertaken.
We actively monitor implementation ofaction plans and overall ESG performancethroughout our investment tenure.

Using alternative assets – private equity,
venture capital, private debt, real assets
and project finance – we invest in a broad
range of impact themes that aim to deliveron our clients’ financial and impact
objectives.
We believe the proper management of
ESG issues is critical to the long-termsustainability of businesses, and assuch, the consideration, integration,
and active stewardship of ESG issues isa fundamental part of our investment
process.
We have developed a framework for the
management of ESG issues that takes
account of the alignment of prospective
investments with applicable AXA IM RI
policies, ESG regulations, standards
and norms such as the International
Finance Corporation’s Environmental
and Social Performance Standards,
the Environmental, Health and Safety
Guidelines of the World Bank and theInternational Labour Organization. This
assessment framework is applied toinvestments during due diligence and over
the tenure of our investments.
Our ESG assessment framework covers acomprehensive list of potential adverse
impacts in line with emerging regulations.
Our assessment framework takes accountof a range of ESG issues including climate
risks; biodiversity; pollution; health andsafety; human rights; and governanceconcerns, amongst others. The ESG
assessment framework is used to assess
investees’ performance on material

Case Study - Climate action engagements
In 2023, we adopted climate action
as our engagement theme for our
Natural Capital and Impact Investment
business line with a view to fostering
the greater engagement of small to
medium enterprises in the fight against
climate change, influencing them totake action to reduce their operational
greenhouse gas emissions.
First, we conducted a survey to build
a baseline understanding of how
our investees measure, manage andmonitor emissions across various
emissions scopes – scope 1, 2 and 3.
Our findings showed differing levelsof understanding and challenges.
While some investees are relatively
advanced – and had measured
their footprints credibly – and were
establishing SBTi related targets,others are relatively nascent in theirclimate action plans.

The biggest challenge faced by investees
was around the measurement andmanagement of scope 3 greenhouse gas
emissions.
Based on those first insights, in linewith our active ownership approachand our stewardship responsibilities,
we appointed a consultant at the endof 2023 to support our investees intheir journey towards climate action.
The consultant’s remit includes themeasurement of emissions, defining
reduction strategies and providing
opportunities to offset residual
emissions through carbon offsets.
We trust this approach will enhanceknowledge, accuracy and build a
credible baseline for climate action by
our investees. We will share the resultsof this thematic engagement in future
Stewardship Reports.

AXA IM Stewardship Report 2023 71

ESG Integration into platforms

AXA IM Alts
Alternative credit
On the direct investment side (leverageloans and private debt), teams
constantly engage with companies,
sponsors, and banks with respect
to deal analysis and ongoing credit
monitoring on a regular basis. The
engagement activity is realised throughan ESG questionnaire for companies andarranging banks, which is completed
during the syndication period. In
addition, for each new primary issuancethe credit analysts meet company
management. We have consistently
promoted ESG considerations with thearranging banks and sponsors overrecent years and believe we have beenat the forefront of driving ESG in theleveraged loans market.
In summary, we:• Seek to understand the ESG issues
that impact companies in which weare invested• Evaluate a company’s policies andpractices in relation to relevant issues• Encourage companies to align withbest practice on ESG issues• Engage in constructive dialogue wherea company’s approach or practices
on ESG matters is below investor
expectations• Leverage our clients’ investor rights
to push for desired outcomes frominvestee companies• Align our votes at general meetings
with our engagement objectives

On the secured finance side, we aim toleverage our size as one of the largest
European investors in collateralised
loan obligations (CLOs) to promote

72 AXA IM Stewardship Report 2023

responsible investment practices. We
aim to typically direct CLO managers
towards higher standards in terms of
ESG, both in their day-to-day corporate
management as well as in theirinvestment philosophy.
AXA IM only invests with CLO managers
that respect minimal ESG guidelines(such as being signatory of a responsible
investment international standard likeUN PRI, having a carbon footprint
reduction plan, an inclusion
programme and exclusion policies).
Engagement with compliant CLO
issuers mainly occurs pre-investment.
When necessary, we will continue thedialogue to clarify our expectations
and support them in reaching those,for example by pushing laggards torespect ESG standards (such as tobecome signatory of UN PRI).

AXA IM Prime
Overview
AXA IM Prime is a fully integrated
provider of investment solutions acrossprivate markets, including private
equity, private debt, infrastructureand hedge funds, embracing a diverse
range of strategies across primaries,
secondaries and co-investments.
AXA IM Prime was established in 2022
and operates within AXA Investment
Managers.

ESG scores computed as part of the preinvestment ESG due diligence phase• Structured dialogue also takes placewith investees to ensure compliancewith AXA IM Prime’s ESG integration
approach and clauses. This means
assessing positioning against regulatory
requirements, ESG innovation andtrends, discussing ESG data reporting
expectations at entity and portfolio
levels, and identifying investment
opportunities
In 2024, AXA IM Prime will continue
to deploy its ESG strategy and further
develop the engagement framework
including monitoring and reporting.

During 2023, AXA IM Prime developed
an ESG integration strategy covering all
stages of the investment cycle (preinvestment, investment/holding phase,and exit.)
Pre-investment, AXA IM Prime has athreefold ESG due diligence process
built around compliance withAXA Group and IM sectorial exclusion
policies, minimum ESG criteria, and an
ESG score of targets’ capabilities bothat manager and portfolio levels. This
assessment enables the identificationof Key Improvement Areas which the
ESG team will leverage to engage withthe managers.
During the investment/holding phase,
AXA IM Prime aims to use this stage ofthe investment cycle as an important
opportunity for dialogue with its thirdparty general partners and managers.
Therefore, we have put in place astructured approach to ESG monitoringand engagement, with the aim ofcontributing to risk management andsustainable value creation during theownership/holding phase:• Monitoring and engagement activities
are carried out directly by theinvestment team in collaboration
with the ESG team as required,including as part of annual meetings
with investees to monitor and update

AXA IM Stewardship Report 2023 73

Governance, resources, incentives and monitoring

How the Responsible Investment teamis organised at AXA IM
Across AXA IM we have more than 50
dedicated experts embedded within ourinvestment and research teams who areresponsible for responsible investment
activities. These experts sit across
AXA IM Core, AXA IM Alts, AXA IM Primeand AXA IM Select, covering all related
aspects including research, due diligence,
data/scoring, analytics, stock and credit
analysis, as well as active ownership andengagement.
The organisation of RI functions within
the business is in line with our principlethat RI must be fully embedded within
our investment functions, to ensure that
ESG is not an ‘add on’, but simply part ofeverything we do.

For more details on our RI governance andcapabilities, refer to our RI policy.47

Responsible Investment
governanceAs part of AXA IM’s continued efforts tofurther embed ESG within the businessand ensure consistency in our approachacross investment, operations and humanresources, the governance structurechanged in 2022 with the creation of a
sub-committee of the management board,
the Sustainability Strategic Committee. It
gathers sustainability leaders alongside
management board members to define andmonitor AXA IM’s sustainability strategy.

RI Centre experts as well as investment
teams are involved in responsible
investment governance throughthe participation of the investment
platform representatives in the
dedicated committees. Representatives
from the compliance, risk and legal
teams bring their perspectives to thededicated RI committee deliberations,
helping to ensure that the evolutionof the AXA IM sustainability strategy isrobust and sound, and onboards new
sustainable finance-related regulatory
requirements.

Organisational structure of AXA IM RI committees

AXA IM
Board of Directors
AXA IM Corporate Responsibility
Strategic Commitee(reports to MB, lead by CSR)AXA IM Management
Board
AXA IM Sustainability
Strategic Committee(report to MB)

AXA IM ESG Monitoring& Engagement Commitee

AXA IM Core RI
Steering Commitee

AXA IM Corporate
Governance Commitee

AXA IM Alts RISteering Commitee

AXA IM ESG Scoringand Quantitative
Methodologies Commitee

AXA IM Prime RI
Steering Commitee

RI Program Steering
Committee

AXA IM Select RISteering Commitee

Statutory body

Global Commitee /methodologies

Sub-commitee/delegation relationship47

AXA IM Responsible Investment Policy.

74 AXA IM Stewardship Report 2023

Business Units
Commitee

Global Commitee /operational focus
Information flow/escalation

To ensure consistency and co-ordination between RI experts, investment teams and support functions,the following committees meet on a quarterly basis:
AXA IM RI committee descriptions
Committee

Role

AXA IM Board of Directors• Approves critical elements of AXA IM's RI strategy at the Group level and ensurescompliance either directly or through Board sub-committees (Audit and Risk
Committee/Remuneration and Nomination Committee). This encompasses RI strategy,
sustainability regulatory reports at the entity level, and commitments spanning theentire entity

At least
three
times ayear

AXA IM Management Board• Validates AXA IM’s RI strategy as well as changes to RI policies (exclusion, voting,engagement), AXA IM-wide commitment and sustainability regulatory reporting atentity level

Ad hocAXA IM Sustainability
Strategic Committee• Proposes the RI strategy and steers its implementation, including RI policies, AXA IMwide commitments and investment components of the Monitor and ESG-linked
remuneration and monitor delivery• Validates material quantitative methodologies (e.g. ESG scoring, SFDR Sustainable
Investment, choice of material ESG data providers, RI product frameworks with aregulatory lens)• Validates shareholder engagement priorities (themes, engagement list including
climate laggards)• Validates positions on material sustainable finance consultations• Advises on business units' RI strategies• Assesses the alignment of AXA IM's and AXA Group's sustainability approaches forcoherence and synergy• Reports to the Management Board

Monthly

AXA IM Corporate
Responsibility Strategic
Committee• Defines AXA IM’s Corporate Responsibility strategy, taking into account AXA Groupstrategy, with concrete roadmap• Animates a community through communication and business actions• Reports to the AXA IM Management Board

At least
quarterly

AXA IM Corporate
Governance Committee• Provides strategic oversight of AXA IM’s corporate governance and voting policy
in relation to investee companies and ensuring clients’ rights and obligations are
exercised in a manner consistent with good practice standards• Validates voting decisions on specific resolutions aligned with the policy for accounts
following AXA IM's guidelines

Three times
a year /ongoingfor voting
decisionsreview

AXA IM ESG Monitoring andEngagement Committee• Ensures views developed on ESG risks and opportunities, from exclusion to
engagement topics are discussed collegially, and considers possible implications for
AXA IM, including on controversies• Validates RI ban-lists updates, as well as ESG and SI scores overrides• Reviews progress on engagement activities, facilitating coordination between various
stakeholders in the implementation of the engagement strategy

Monthly

AXA IM ESG Scoring andQuantitative methodologies
Committee• Validates less material ESG quantitative methodologies, defines business specifications
for ESG metrics, and validates regular updates for ESG scores and SFDR SI datasets• Reviews the quality of service provided by ESG data providers

Bimonthly

RI Programme Steering
Committee• Monitors progress of RI-related projects with an operational focus

Every six
weeks

Global Risk Committee• Is consulted on RI product frameworks and exclusion policies from an operational
perspective. Additionally, it stays informed about entity-level regulatory reporting

Ad hocFrequency

AXA IM Stewardship Report 2023 75

Governance, resources, incentives and monitoring

Inclusion and Diversity at AXA IM

Inclusion and diversity have been on
our strategic agenda for many years. We
place sustainability at the centre of ourpriorities, to enhance AXA IM’s role insociety as an investor, an employer andas a business. As an employer, building
an inclusive culture lies at the heart ofour priorities. It is part of our Employer
Promise to create an environment where
everyone feels they belong, are included
and can thrive within a diverse community.
Our global diversity and inclusion policy
summarises our commitment and areasof focus. We have taken meaningful steps
to create a more diverse and inclusive
workplace, both internally and externally,and have:• Ensured all our employees benefit fromthe same minimum parental leave
provision globally and rolled out smart
working practices globally• Launched employee resource groups
sponsored by management board
members and partnered with external
parties to make progress on gender,

ethnicity, social mobility, age, disability
and sexual orientation diversity andinclusion• Supported flexible ways of working
to help remove barriers and be more
adaptable and responsive to everyone’s
circumstances• Used our annual global inclusion
survey to track employees’ perceptions
on inclusion, belonging and equal
opportunities with the possibility toanalyse data across different diversity
dimensions, like gender, age, ethnicity,disability/health condition, socioeconomic background and sexual
orientation• Achieved EDGE (Equity Diversity andGender Equality) Move certification, in
recognition of the significant progress
made by the company towards a genderequitable workplace• Introduced a development goal linked toinclusion and diversity for all employees

to reinforce our expectation from every
employee to actively promote andadvance a culture of inclusion — throughdeliberate, positive, and mindful efforts• Offered development journeys focusedon inclusive leadership skills andbehaviours through our Managers
Academy and Leadership programs
which help our leaders increase theirimpact, enable diverse teams, and create
community• Introduced an aim to include more than
one woman in shortlists for senior roles• Applied our diversity voting policy tochallenge other companies on theiractions

To reflect our strong commitment
to creating an inclusive and diverse
workplace, all our global management
board members have concrete targets
to improve representation and inclusion
within AXA IM.

Our Employee Resource Groups (ERGs)

GENDER
GEN(Gender Equality Network)
Inclusion Diversitye
GEN seeks to engage
everyone to accelerate
gender equality at
AXA IM and encouragea culture of inclusion
for all colleagues andto support AXA IM’stalent and businesspriorities.

GENERATIONSSOCIO-ECONOMIC

Inclusion Diversity

Inclusion Diversity

Generaction

AXcessLGBT

I aM Proud

MULTICULTURAL
MosaicInclusion Diversity

actionGener

Generaction aims tofoster and increaseintergenerational
collaboration within
AXA IM, throughawarenessof the topic
and knowledge
exchanges
as part of the I&D
policy.

AXcess aims to ensure
talented individuals
from all backgrounds are
identified and nurtured
in order to meet theirtrue potential. To doso, we will increaseawareness and prompt
conversations aboutsocial mobility andstrive to ultimately make
AXA IM truly diverse
from a socioeconomic
background standpoint.

I aM Proud supports
and engages LGBT+
employees and allies
to foster an inclusive
environment where
employeesof all sexual
orientations, gender
identities,
and gender
expressions
feel comfortable
to bring their wholeselves to work.

Mosaic seeks tohighlight the collegial
value of individual
differences. Throughevents, educative
initiatives & networking,we seek to include
underrepresented
ethnicities within
a multiculturalenvironment in orderto promote a culture ofinclusion at AXA IM.

Information regarding the background and personnel of AXA IM are provided for information purposes only. Such persons may not necessarily continue tobe employed by AXA IM, and may not perform, or continue to perform services for AXA IM.

76 AXA IM Stewardship Report 2023

Discrimination, non-inclusive behaviourand harassment have no place at
AXA IM. We have a global standardon harassment that applies to all our
employees, consultants, suppliers andclients. Mandatory training is provided
to all our employees on how to identify
and report any behaviour that is inbreach of our global standard.
We understand the need for thefinancial industry to accelerate progress
on inclusion and diversity to meet theevolving expectations of employees,
clients, regulators and the communities
within which we operate. We play anactive role in cross-industry initiatives
to jointly address some of the intrinsic
challenges in making the corporate
world more generally, and the financial
industry more specifically, a truly
diverse and inclusive environment.
Below are four examples of external
initiatives we supported in 2023:

product ordered by AXA IM, a similar
product is donated to people whoneed it with an aim to eradicate period
poverty
As a signatory of the Women in Finance
Charter, we had set ourselves the targetof reaching 33% of women in our global
senior leadership population by 2025.
In 2021, this number stood at 26%. As
of June 2023, women made up 34% of
our global senior leadership population,achieving our target ahead of schedule.
We want to maintain this momentum andhave thus set a new target of reaching 35%
of women in our global senior leadership
population by 2025.
AXA IM is also a proud signatory andsupporter of a number of external
charters and commitments, including
the Women in Finance Charter, Women’s
Empowerment Principles, United Nations
LGBTI Standards of Conduct for Business,the 30% Club, Club Landoy charter, UN
Women’s Generation Equality Action
Coalition on Gender Based Violence andFrance’s l’Autre Cercle Charter.

• AXA IM along with seven otherasset managers became a founding
member of the Diversity Project
Europe, a cross-border initiative toencourage a more inclusive money
management industry across theregion• AXA IM launched its partnershipwith Investment20/20 to accessand recruit from a diverse pool ofgraduates, school and college leaversthat are more reflective of the people
and communities we serve• AXA IM became gold sponsors
of Women in ETFs, a communitythat brings together people in theexchange-traded funds industry
across the globe to champion ourgoals of actively choosing equality,
diversity, and inclusion• AXA IM launched a partnershipwith Hey Girls in the UK to provide
environmentally-friendly period
products in our offices. For every

AXA IM Stewardship Report 2023 77

Governance, resources, incentives and monitoring

Learning and development

Our educational offering related to ESG
and RI includes engagement and learning
opportunities to help our employees to:• Understand and be part of AXA’stransformation towards sustainability
Our flagship AXA Group-wide‘AXA Climate Academy’ programme
was launched in October 2021 during
AXA Learning Week with the aim
to support our collective effort tomitigate the effects of climate change.
AXA committed to train 100% of its staff
by 2023 as part of AXA’s Driving Progress
2023 plan. Over several hours, ouremployees learn why climate mattersincreasingly to our clients; about themain risks associated with climatechange; the impact all along the value
chain for insurance and investmentcompanies; as well as how they cancontribute to reducing the carbon
footprint of our company throughprofessional and personal practices.
Some 99% of AXA IM employees
have been certified with AXA Climate
Academy programme by end of 2023.48
To go one step further, since 2023 AXA IM
continues to build on the AXA Climate
Academy programme with the ‘ACT
playlist’ from the AXA Climate School,with role-specific content available forfunctions including HR, technology,
finance and legal to help employees
understand how sustainability impacts
their jobs.

• Build technical expertise in ESG and RI
Our dedicated learning journey includes
introductory ESG and RI online courses,
intermediate and advanced level live
sessions delivered in partnership withexternal training providers. It also
includes lessons from peers and offers
opportunities to get certified withindustry-leading qualifications in ESG andclimate investing.

ESG and climate learning
2019- 2023
The training of teams across the business on
RI and climate has been a focus for the past
four years, for example:• The AXA IM ESG Academy was launchedin 2020 to increase access to ESG
upskilling for all employees. That same
year, the major analysts’ associations
launched ESG certifications including
an ESG Certificate from the Chartered
Financial Analyst (CFA) Institute aswell as a Certified ESG Analyst (CESGA)
programme from the European Federationof Financial Analysts Societies (EFFAS).
Widespread access to this external
training and certification has been
provided since 2020, with a particularfocus on the participation of AXA IMCore and Core client group teams. Thisupskilling has been accelerated by live
sessions, delivered in partnership withexternal training companies over recent

years as well as by the encouragementof investment, research and sales
professionals to make progress towards
achieving major industry qualifications– including the newly-introduced CFA
Certificate in Climate Investing• A foundational real estate ESG
training was launched in 2022. Tailoredexclusively for AXA IM by training provider
Hillbreak, the internal Responsible
Investment and Talent Development
teams; this three-hour course aims at
developing participants knowledge
and understanding of this increasingly
dynamic, rapidly evolving and critical
agenda for real estate investment
markets. In all, 320 employees completed
a foundational Real estate ESG course
between 2022 and 2023. 49• The ESG development goal was
introduced in 2023 to all employeeswith the ambition to power our ESG
strategy through learning. Employees
had an opportunity to engage withvariety of learning initiatives related to
ESG, including climate and biodiversity,
depending on their learning needs andinterests.
In addition, our RI teams continue toorganise regular awareness sessions on
ESG issues for staff. These sessions coversustainable regulations, and AXA IM’s RI
strategy (e.g., net zero commitments andscoring methodologies, engagement andvoting activities). We also share any RI
updates internally through various channels.
We have a dedicated RI and Corporate
Responsibility SharePoint accessible to
all AXA IM employees, which details our
ESG strategy, actions implemented, andincludes all materials we produce (e.g.,standards, policies, and presentations). We
communicate regularly on various groups tohundreds of AXA IM employees worldwide
on our RI framework and actions we take toreach our net zero objectives.

All active employees as of end of November 2023, with course completions by end of 2023 (excluding JVs, temp, intern/apprentice, consultants,
contractors)
49
Active employees as of end of December 2023
48

78 AXA IM Stewardship Report 2023

Performance management
and remuneration at AXA IM
The AXA IM Remuneration Policy setsout principles relating to remuneration,
which accounts for AXA IM’s businessstrategy, objectives, risk tolerance, andthe long-term interests of AXA IM clients,
shareholders and employees. It alsoseeks to ensure sound and effective risk
management and behaviour consistent
with the risk profile, strategy, objectives
and values of the managed portfolios.
Since 2018, all investment platform heads
have had ESG objectives included in thetarget letters they cascade to the relevant
teams in their department. Since January
2021, individual and collective objectives
for investment teams have also included
elements related to the sustainability risk
framework as well as updated investment
processes which include the monitoringof these risks. Thus, the individual levelof the variable portion will depend on
the achievement of individual qualitativeand quantitative objectives, as well as
collective performance criteria. Pleaserefer to our remuneration policy for moredetails.
AXA IM’s risk management department
validates and assesses risk-adjustment
techniques. These are used in assessing
performance, determining AXA IM’s target
variable pay and ex-post risk adjustment– under the consideration of all relevant
types of current and future risks, including
financial and non-financial risks (e.g.,
reputation, conduct and client outcomes).

Variable remuneration must account for
appropriate qualitative criteria, such as
sound and effective risk management(including regulatory compliance) andclient service which delivers fair, highquality outcomes. As AXA IM variable pay ispotentially composed of cash and deferredvariable pay, since 2023, the deferredpart of the variable pay is indexed to an
ESG performance Index, aligned with the
AXA IM net zero ambition.
The importance of equity and genderequality is also emphasised in the
Remuneration Policy. AXA IM aims toreward equal performance, free fromdiscrimination or in terms of irrelevant
personal factors such as age, nationality,
ethnic origin, gender, sexual orientation,
gender identity or expression, religion,
marital status, or disability.
The 2023 update of the Remuneration
Policy included (i) a reminder of theabsence of sale objectives that could
directly or indirectly impact the fixed orvariable compensation of the concerned
employees, (ii) reinforcement of thegovernance regarding equity and genderequality (iii) adjustments required by local
regulation.

AXA IM Stewardship Report 2023 79

Governance, resources, incentives and monitoring

Third-party service providers
and due diligence
We use ESG specialists such as MSCI,
Sustainalytics, and Institutional
Shareholder Services (ISS) for ESG
research, quantitative data and scoring.
A thorough due diligence process is inplace for the selection of these providers,involving quantitative experts as wellas investment and risk teams, andwe regularly meet with the providers
to review, propose or challenge
methodological evolutions. We areparticularly attentive to the limitationsof methodologies reported by issuers,
linked to the unavailability of comparable,
comprehensive data.
Challenges with regards to data
availability and quality are in partaddressed in AXA IM’s internal scoring
methodology, Q2, described in detailin other sections of this report. We aim
to be transparent on those limitations
and to advocate externally to help toprogressively address them, including
through our membership of the ISSB
Investor Advisory Group and our advocacy
work on ESG rating (see public policy
section).
With regards to proxy voting, AXA IM
makes use of the services of ISS forprocessing votes. We also use the voting
information services of ISS and Proxinvest.
While we do not outsource our voting

decisions, which are made by the AXA IM
Corporate Governance Team, we use theirresearch to augment our knowledge ofcompanies and resolutions.
In that respect, the Operations Third Party
Management team has implementeda systematic 12-month cycle of due
diligence. This process, in three phases– sending a questionnaire, assessing
responses, and on-site visit – aims toensure the voting chain and processing ofvoting instructions works correctly. The
due diligence questionnaire covers issues
such as human resources, operational
resilience, information security,
operational organisation, risk and control
frameworks, compliance, and outsourcing
arrangements.
Should we be unsatisfied with theoutcome of the due diligence, we willdefine follow-up items or a remediation
plan to be followed until full resolution
with the provider. In the case that noresolution can be found in a reasonable
timeframe, we would ultimately terminate
our contract with the provider. To date,
this situation has not occurred. Topics
raised during the on-site visit held in 2023
included discussions on certain answers
to the due diligence questionnaire andreview of the application of the AXA IM
voting policy.

When we are confronted with material
errors in the research we receive, the
AXA IM Corporate Governance Teamreaches out to proxy advisors to seekcorrections. In 2023, isolated issues
were spotted, including some linked to
combination of chair and CEO roles, overboarding, and ESG criteria in pay. They
were systematically raised to our providers
which quickly followed up and addressed
them. Overall, we found the error rate ofour providers to be very limited, and any
recurring and material error would beraised during the due diligence process.
Moreover, to ensure continuous
improvement in the quality and level of
information included in proxy advisors’
research, AXA IM corporate governanceanalysts participated in roundtables andpolicy surveys organised by proxy advisors
during 2023, to share our feedback on
their voting policies. A dedicated meeting
also occurred between ISS representatives
and AXA IM to discuss the governance inplace to review environmental and social
shareholder proposals. AXA IM was also
a signatory of the IGCC letter calling on
ISS to further integrate climate into its
voting recommendations. At the endof 2022, AXA IM joined the Proxinvest
Steering Committee tasked with providing
feedbacks and advice on Proxinvest’s
voting policy. During 2023, two meetings
were held to discuss evolution to specificprovisions of the policy.
AXA IM also contributed to the call forevidence from the European Securities andMarkets Authority on the implementationof the Shareholders Rights Directive(SRD) provisions on proxy advisors andresponded to the targeted consultation
on SRD commissioned by the European
Commission, which included questions on
proxy advisors’ transparency.
Investment professionals also have accessto external qualitative research throughbrokers, for instance.

80 AXA IM Stewardship Report 2023

For a full table of AXA IM third-party providers, see below:
ESG Data
Provider

MSCI

Sustainalytics

Expertise

Description

Leader on corporate and sovereign
ESG rating with a strong trackESG and climate researchrecord and expertise on Climate
analysis for corporates
Controversies analysis /exposition to some activities andcompliance with internationalnorms

Controversies analysis / exposition
to some activities and compliancewith international norms

FinDoxStrong expertise on ESG datacollection for European and US
leveraged loans markets

ESG KPIs used for leveraged loans
and private debt asset classes

S&P Global
TrucostFull range of quantitativeenvironmental and social KPIs
(including SFDR PAIs) andtaxonomy alignment metrics

Full range of quantitativeenvironmental KPIs, SFDR PAIs andtaxonomy alignment metrics

Carbon 4

Offers a climate risk package

Measures the carbon impact ofinvestments

ISS - ESG

Offers expertise across a full range Ethical filters and controversialof ESG issues and on impact
weapons, research on impact
investinginvesting and UN SDG alignment

Beyond Ratings

Expertise in Climate analysis

ESG KPIs. Used for investment andreporting purposes

Bloomberg ESG

Full range of ESG services.

ESG KPIs. Used for investment andreporting purposes.

EthifinanceStrong expertise in European
micro and small caps

ESG ratings used for leveraged loans
and private debt asset classes

Iceberg Data Lab Measurement of investors’
I Care & Consult investments impact on
biodiversity

Measuring the impact of companies
on biodiversity and nature to help
investors integrate it into risk
assessment and research.

Urgewald (NGO) Coal, oil and gas research

Coal and Oil and Gas research with
Global Coal Exit List and Global Oil
and Gas List

Vigeo-EIRIS

Methodology based on analysing
stakeholders from the leadership,
implementation, and results
perspectives

Strong expertise in social issues
and European small and mid-cap
companies

ESG Scores
and Company
Research

ESG Raw
Data &
KPIs

Start Date✓✓

04/2004✓✓

11/2012✓

10/2022✓

03/2012

Only used
for Green Bonds reporting✓✓

01/2017

01/2003✓

08/2018✓

12/2018✓✓

03/2019✓✓

01/2021✓

Used for our fossil
fuels exclusions
since 2020✓

07/2004✓

AXA IM Stewardship Report 2023 81

Client and beneficiary needs

Supporting Client Needs
Sustainability Dialogue
We distinguish regular dialogue conducted with investee companies around their sustainability practices(referred to as ‘Sustainability Dialogue’) from active engagement with speciﬁc, identiﬁed objectives(referred to as ‘Engagement with objectives’).

We believe it is crucial to communicate
with clients in the most transparent way
possible, especially in an evolving anddynamic environment such as the year
we have just experienced. This is all themore important given the additional
regulatory guidance in relation tosustainable finance being developed indifferent jurisdictions and being applied
to asset management activities as wellas other parts of the financial sector
value chain. The main financial and nonfinancial information on every strategy
which has integrated ESG criteria into
its investment process is available in ourFund Centre. This is in accordance with
European and local regulations.
We have noted over recent years a
growing client interest for a morecomprehensive and enriched ESG
reporting. AXA IM’s ESG Report includes awide range of ESG KPIs including climate
and biodiversity-related metrics, in linewith recommendations from the TCFD
and French Article 29 Energy-Climate
Law requirements, but which will also
include voting and engagement metrics.
A specific Impact Report, a version of our
ESG Report enriched with quantitative
indicators and qualitative impact
information, has been also deployed on
our growing listed impact offering. Those
reports aim to provide transparency on
a range of metrics, a selection of which
may be specifically embedded in theinvestment process as described in theregulatory documentation when it is thecase.
The production perimeter of the
Engagement Report has been extended
to all our ESG Integrated and ACT range
funds, and since the end of 2022, voting
reports have been deployed acrossthe same ranges. In 2024, AXA IM will
disclose the enhanced version of its
fund level Engagement Report. This
will provide detailed information on

82 AXA IM Stewardship Report 2023

Breakdown by Themes

We consider Sustainability Dialogue to be key in establishing and developing a constructive relationshipwith the company, as well as gaining insights its policies and practices. While it may feed into future
potential targeted engagement, this type of dialogue is less intensive and mainly aims at gathering
information.

Our Engagement Philosophy

Engagements with Objectives

Investor engagement is a transformation process where investors seek to improve investee companies’
practices with a speciﬁc objective in mind. We distinguish two engagement approaches: engagement with
objectives and sustainability dialogue.

Key Figures

We emphasise a proactive and direct dialogue with companies on sustainability and governance issues thathave a material impact on long-term ﬁnancial performance. We also conduct engagement to contribute to
the achievement of societal targets such as those deﬁned by the United Nations’ Sustainable Development
Goals (SDGs)¹.

Over the reporting period

1811Over the reporting period

Issuers Engaged

Most of our engagement are based solely on our own eﬀorts but we also believe that collaborating withother likeminded investors and stakeholders can maximise our power to inﬂuence companies.

7

SDGs Targeted

42

Mizuho Financial Group Inc

6

32,2%

Issuers in portfolio engaged, inmarket weight

37,8%

Toronto-Dominion Bank/The

These(s) targeted by the engagement: Climate Change

Engagements with Issuers
Senior met Collaborative
Executives or Board
Engagements

As of 29 December 2023

+ Explain how they manage the gaps between transition scenarios andthe real world+ Detail climate engagements with clients and their learnings
Breakdownby Themes+ Improve speciﬁc sectorial policies

66,7%

29 Engagements with Objectives

Aegon NV

These(s) targeted by the engagement: Human Capital

These(s)targeted by the engagement: Corporate Governance
Breakdown
by Sectors

Of the portfolio engaged,
in number of issuers

Objectives:

65 engagements with 42 issuers

Issuers in portfolio with which we had a

Objectives:+ disclose Coal and Tar sand exposure+ upscale GHG reduction targets for scope 1 and 2 and set scope 3
reduction targets for energy and power in 2023 and extend thosetargets to all material sectors by 2024
+ strengthen Coal policy and establish a policy on Tar sands andunconventional/controversial oil & gas

67,8%

Of issuers in portfolio met,

Engagement Summary: We met individually with Mizuho – which isEngagement Summary: We held our second individual meeting withsustainability dialogue
in market
weightpart of our climate laggards list - for the fourth time since we initiatedTD Bank, one of the three banks in our Climate Laggard engagementa dialogue on their climate policy in September
2022.
It was Ethics
the ﬁrst
initiative and part of our engagement focus list . We expect the bankBusiness
0,0%
meeting since they published updated
ESG and TCFD
reports.
We
to strengthen its climate policies and to set robust ﬁnanced emissions
ClimateChange24,1%
expect the bank to improve its climate
policies andCorporate
strategy. Mizuho
reduction targets for the most sensitive sectors. TD highlighted theGovernance
17,2%
explained that they use demanding scenarios – mainly
the IEA’s
NZE –changes made over the past year, with the auto and aviation sectors.
Human
Capital6,9%
but want to remain grounded in reality . They study sectors andnow having targets, a higher transition funding target, and a dedicatedPublic Health
0,0%technologies and engage with clients to ﬁnd solutions. In addition toenergy & power engagement plan. They also highlighted a certain
Escalation Techniques
Sustainability Dialogues
ResourcesandEcosystems
31,0%
power, O& G and coal, they will soon provide policies and targets forsocial focus and a belief that accompanying clients was a better
Engagement does not always progress smoothly. Responses given by companies can be either
Source: AXA IM, as of 29/12/2023
Relations
auto and steel. They explained that20,7%
real estate wasSocial
a muchmoresolution than excludingthem . TD is progressing in structuring its
Regular dialogue5conducted withinvestee companies
aroundtheirsustainability
practicesto gain4
unsatisfactoryor slow. It is crucial
in suchcases
to escalate the issue
to keep theprocess moving andchallenging sector due to the lack of proper data. Mizuho is clearly onenergy transition strategy. Over the past year, they have enhanced the
maximisethe chance ofmeeting
our engagement
objective.
insights on their strategy, policies
and practices.
These
dialogues
are key
in developing andIssuer Acknowledges
Engagement
Succeeds relationship with the issuer.
top on the subjects. The answers were clear and precise and wereporting, set additional targets and intend to set more on new
maintaining
a constructive
Issue(milestone)
consider that engagement is progressing . The TCFD reports is very richsectors , and accelerated in engagements. They also factor in social
4 issuers
1 issuers
and full of useful data. The addition of non-ﬁnancial elements in theelements, i.e., just transition issues, in their analysis. We therefore
0,0%
Vote
0,0%
Fund Manager
remuneration of management is new and a positive evolution. They
consider engagement is progressing. The bank however needs to
Sectors
RegionSource: AXA IM, as of 29/12/2023 (1) The targeting of speciﬁc SDG does not imply
the endorsementof the United Nations of AXA Investment Managers, its products or services, or of its planned activities and does not constitute, explicitly
0,0%
Divestment
will provide targets for new sectors in the coming months. We will
expand to its entire spectrum reporting and targets, improve theCollaboration with Other Investors
100,0%or implicitly,a recommendation
3
0 for an investment strategy.
recontact Mizuho in the Spring of 2024 after the next publication cycle
granularity in some cases – notably around thermal coal – and broaden
Public Statement
0,0%
6,9%
Developed Europe Ex Euro
Funds
0,0%
its engagement initiatives to all key sectors. We also would like to see
Senior Executive/Board
0,0%
51,7%
Basic Materials
Developed Eurozone
0,0%
Insuﬃcient Progress;
Date of last meeting:2023-11-21
intensity targets based on physical metrics rather than on EV, as thisEngagement Fails
Communications
6,9%
Escalation
3,4%
Developed JapanEngagement Progress
4 Engagement
Progresscan distort
Consumer
CyclicalBreakdown Sustainable Development Goals targeted¹
10,3% Tracker:
1 issuers
0 issuers
34,5%
Developed North America
Consumer Non Cyclical
Escalation Type:--10,3%0,0%Developed
Diversiﬁed
0,0%Date ofOthers
last meeting:2023-12-12
Energy0,0%
6 - 18 months
24 - 36 months
3,4% Tracker: 4 Engagement Progress
Developed Paciﬁc
Ex Japan Progress
Engagement
Financial
20,7%
0,0%--Emerging Asia
Escalation
Type:
Government
0,0%Active engagement seeking to inﬂuence change at investee companies. Clear targets to theengagement are deﬁned, as well as a timeframe we consider appropriate to see progress, dependingon the nature of objectives.

Engagements with Objectives
Engagement Progress Tracker

36

Engagements with Objectives

1

2

Engagement
Commences

Issuer Responds

1 issuers

11 issuers

3 months

Change takes time and in most cases, several interactions are needed before reaching any concrete progress. As
a result, at AXA IM we have rolled out a clear process for selecting priorities, deﬁning engagement objectives anda system for tracking engagement progress, with a range of possible outcomes and escalation points.
1.
2.
3.
4.
5.
0.

The Engagement commences, often by requesting to discuss speciﬁc issues with an issuer’s
representatives.
Upon approving to meet with us, the issuer recognises the presence of the issue and accepts to discusswith us.
The issuer has not provided a satisfactory response to the initial engagement request and/or does notdemonstrate adequate accountability. We must now scale up our engagement eﬀort. An escalation
strategy is therefore determined for every engagement activity.
We made tangible progress in our engagements, and we are seeing the issuer taking more decisive steps
in addressing the issue we initially contacted them for.
A positive milestone is reached as the issuer has eﬀectively resolved our initial concern, while
demonstrating full accountability.
The issuer failed to address our concerns. The information disclosed is the latest stage of engagement
achieved for each issuer.

0,0%

0,0%

0,0%

0,0%

5,1%

0,0%

0,0%

10,3%

0,0%

10,3%

2,6%

10,3%

38,5%

2,6%

17,9%

2,6%

0,0%

17,2%
0,0%
0,0%

Business Ethics
Climate Change
Corporate Governance
Human Capital
Public HealthResources and Ecosystems
Social Relations

As of

Key Figures

Our engagement priorities are determined based on our observation of global market developments,
emerging ESG practices and linked to our key thematic focus areas.

Engagement Overview

5,6%
38,9%
2,8%
16,7%
2,8%
13,9%
19,4%

Objectives:

0,0%
0,0%
2,8%
8,3%

Funds
Basic Materials
Communications
Consumer Cyclical

0,0%
72,2%
0,0%

EnergyFinancial
Government+ Guarantee better accountability mechanisms toshareholders’Consumer Non Cyclical
5,6%
concerns (such as annual director election, vote 0,0%
on remuneration
Diversiﬁed
policy, or shareholder proposal process)Engagement Summary: Following our discussion5,6%
with the CEO Industrial
in July
Not Classiﬁed
0,0% the Eumedion
2023 related to the announced relocation to Bermuda,
Sovereigncollaborative initiative held a separate call with0,0%
the Chair of theSupervisory Board to reiterate our concerns that2,8%
were mainly related
Technology
to the fact that several shareholder rights (on binding remuneration
Utilities
2,8%
policy, dividend approval, share buybacks and pre-emptive rights) will
be removed. On Sep. 15, the company published a commitment torevise several shareholders’ rights that would have been underminedfollowing the transfer to Bermuda. All our engagement objectives
have been answered. We have therefore approved the company’stransfer and consider we reached an engagement success milestone.
Date of last meeting: 2023-09-15
Engagement Progress Tracker: 5 Engagement Success Milestone
Escalation Type: ---Emerging Europe 0,0%Industrial
Not Classiﬁed
Sovereign

Emerging Latin America 0,0%
Emerging Middle East And Africa 0,0%

Source: AXA IM,6,9%
as of 29/12/2023(1) Companies shown are for illustrative purposes only at the date of this report and may no longer be in the portfolio later. It should not be considered a recommendation to purchase or sell any security.
Technology
0%
10% Managers,
20% its products
30%
40%
50%
60%
27,6%
(2) The targetingof speciﬁcUtilities
SDG does not imply the endorsement of the United Nations of AXA Investment
or services,orof its planned
activities and does not constitute, explicitly or implicitly, a recommendation for
an investment strategy.

Engagement Approach

Engagement Type

Some of our Engagements with objectives aim to contribute to the Sustainable Development
Goals,approaches for our interactions with issuers. We favour direct dialogues throughWe use diﬀerent
which is an agenda made up of 17 Sustainable Development Goals adopted by world
leaders in and meetings but some engagements can be conducted through email dialogue, lettersteleconferences
2015. The Goals encourage countries to establish national frameworks to end all formsof poverty,
and conferences.
ﬁght inequalities and tackle climate change. Each goal has speciﬁc targets to be achieve over the
next 15 years. Initially developed for Governments, the Sustainable Development Goals have been
widely adopted by the private sector to identify opportunities in generating positive, sustainable
impact. Number of SDGs targeted by the engagement with an issuer. We consider the primary andsecondary SDGs targeted by each engagement process with each issuer.

Source: AXA IM, as of 29/12/2023 (1) The targeting of speciﬁc SDG does not imply the endorsement of the United Nations of AXA Investment Managers, its products or services, or of its planned activities and does not constitute, explicitly
or implicitly, a recommendation for an investment strategy.

13,8%
69,0%
10,3%
0,0%
6,9%

Teleconference
Meeting
Email Dialogue
Conference
LetterMost of our engagements are based solely on our own eﬀorts, referred to as individual engagement, but
we also believe that collaborating with other like-minded investors and stakeholders can help us toachieve our goals. We participate in collaborative engagements, by joining investor, where we sometimes
lead the discussion, on behalf of the investor group, with a speciﬁc issuer.

20,7%
0,0%
79,3%

Collaborative - Participant
Collaborative - Lead
Individual Engagement

Source: AXA IM, as of 29/12/2023

engagements covering objectives andsustainability dialogues, as well as
engagement case studies on portfolio
holdings.

ensure we have the right content andcommunications in place to stay relevant
to clients’ changing needs and to answer
the questions at the top of their minds.

ESG reporting remains an area of focus
and we will continue to enhance ourreporting and provide more customised
reports, relying on an increasing
integration of ESG-related data into
data systems, to better meet client
expectations.

We seek to empower our clients – acrossinstitutional, wholesale and retailsegments – to be able to confidently invest
for a better planet, society and sustainableeconomy. We do this by creating thought
leadership, market commentary andeducational content across multiple
formats. These include research papers,
articles, webinars, events, videos, andinfographics to provide clients with accessto our investment experts, and at thelevel of detail they require. This content isthen shared with clients through a varietyof channels, such as our website, email,social media, and third-party websites.

Client interactions, inputs andexpectations
As a long-term investment manager, we
continuously engage with our clients tounderstand their needs and understand
how we can help them to make informed
investment decisions which can support
a sustainable future. We are committed toanswering their questions whether they
are about market movements, regulatorychanges, asset allocation or future trends.
We do this via surveys as well as throughconversations at our own, or industry
events and through regular interactions
with our sales teams. This enables us to
improve our product offering and helps

The increase in regulations such as
the European SFDR has been a recent
area of focus for us and our clients. We
believe the fact that 79% of AXA IM Core’s
eligible assets come under Article 8 and
9 under SFDR (as of December 2023) is
testament to the importance we place on
ensuring our RI approach is robust andtransparent to our clients. In line with the
new requirements under the European

Union’s MiFID regulation on clients’
ESG preferences, we have started to
deploy an approach to help assess theirpreference for sustainability in 2022 andwill continue to deploy this in 202350. In
a moving environment characterisedby uncertainty on some regulatory
expectations and divergences between
local approaches, we seek to shareand explain our knowledge with ourclients in order to accompany them inthese important changes. Indeed, we
get many questions from clients on our
methodology to identify sustainableassets, on the mechanisms we use tomonitor these types of assets, and ourability to report on the level of funds’
sustainability.

It is also important to note clients’(mainly institutions) growing interest forinvestment solutions which will enable
them to achieve carbon neutrality by 2050
in their portfolios. Indeed, many of themshare the same ambition as AXA IM. This
theme has occupied a lot of time in our
discussions with them in 2023 and will
obviously continue in the years to come.
Our responsible investment experts
regularly interact with our institutional
clients through joint meetings with
our investment teams when specificinsights are required. Furthermore, ourclients regularly send us due diligencequestionnaires through which we canidentify new trends and requirements.

To support our retail clients with theircontinued learning, we have launchededucational modules, including the
AXA IM Academy, an educational platformin the UK providing interactive, CDPcertified, financial learning experiences
across several key areas of commercial
interest: investing, asset classes, market
factors and ESG/socially responsible
investing.51 These have included our own
bespoke AXA IM modules.
At AXA IM we aim to be very attentive
to market and client needs, bestpractices and new expectations andthese interactions are one of the ways
we can identify our areas of potential
improvements.

AXA IM at a glance – A breakdown of the assets under management across asset classes and geography:

AuM: €844.4bn
Geographical split*

Platform split*

Emerging
0%

Capza
1%

Americas
6%
Asia
20%

Client segment split*
PE
1%

Real Estate
15%

JV & Other
11%

Alternative
Credit6%

Select4%

Retail
19%

Prime
4%
Equity6%
Europe74%

Multi-Assets
5%

Fixed Income
47%

Institutional
81%

Source: AXA IM, as of December 2023.
*Figures may not total 100% due to rounding.

 nder MiFID II (Markets in Financial Instruments Directive) financial firms are required to determine client sustainability preferences in conjunction
Uwith suitability assessments.
51
CPD stands for continuing professional development. Accredited CPD training means the training has reached required CPD standards andbenchmarks.
50

AXA IM Stewardship Report 2023 83

Client and beneficiary needs

About us
The following content is available on our
website:• Annual Active Ownership and
Stewardship Report• Annual Climate Report (aligned with the
TCFD and Article 29 of the French Energy
Climate Law)
• Annual Principles for Responsible
Investment (PRI) report• Policies

Going into more detail about stewardship,
we are committed to providing
transparency and regular reporting on
active ownership, both internally andexternally.
Our full voting records are accessible
publicly and detail how we voted atcompany general meetings on our clients’behalf. In addition, we publish an annual
Stewardship Report which includes
information on RI issues, engagement withcompanies, and aggregated voting records
for the relevant year.

About our funds
For products classed within our ACT range,
the following content is made available toclients in our Fund Centre:• Transparency code
• Voting Report (for equity and multiasset funds only) – with data on AGMs
voted and rationales for any voteagainst the management• ESG Report• Impact Report for our range of Impact
funds• Engagement Report• Legal documentation (prospectus, KIID,
annual reports, semi-annual reports)

84 AXA IM Stewardship Report 2023

• Monthly comments from the portfolio
manager.
We also provide bespoke and customised
reports aligned with specific client requests– the decision whether to make the reportpublic or private is made by the clients. This
includes a statistical overview and analysisof engagements conducted including
breakdowns by theme and by the UN SDGs.
There is also information on progress madethrough engagement and details of where
we consider success has been achieved.
We also provide a list of all issuers engaged
with, and on which specific themes.

Review and assurance

Accountability
AXA IM’s Management Board is accountable
for the responsible investment strategy acrossthe organisation. Moreover, the Sustainability
Strategic Committee – a committee reportingto the Management Board which gathers
two representatives from the Management
Board, the Head of AXA IM Research and RICenter teams and his direct reports, Heads
of Sustainability from four business units,
as well as heads of corporate responsibility,
legal, risk, compliance and strategy teams– is the leading body in charge of steering
AXA IM’s sustainability strategy and roadmap
across all asset classes. It focuses, among
other things, on the integration of relevant
RI considerations into our investment andstewardship processes across all asset
classes and regularly reviews the strategy andstewardship undertaken across the business.

As detailed under the RI organisation
section, the AXA IM Management Board
has established four ESG committees
to ensure effective implementation of
our RI and stewardship strategy. The
Sustainability Strategic Committee,
the Corporate Governance Committee,
the ESG Scoring and Quantitative
Methodologies Committee and the ESG
Monitoring and Engagement Committee
all play a key role in reviewing andapproving the annual Stewardship
Reports, the Corporate Governanceand Voting Policies, the Engagement
Policy, and any other relevant policies
and processes related to responsible
investment and stewardship. These
committees aim to represent allinterested parties within AXA IM, toensure appropriate and relevant
expertise depending on each committee’s
responsibilities. Internal legal, risk andcompliance teams are also represented
on each of these committees, either asfull members or permanent guests. These
committees all report to the Sustainability
Strategic Committee.

Internal controls ensure alignment
with the AXA IM Responsible
Investment Policy, the AXA IM
Corporate Governance & Voting Policy,
the AXA IM Conflicts of Interest Policy
and other relevant policies, which
are also subject to periodic internal
audit. As ESG and RI continue to gain
importance strategically, in termsof clients’ interest and regulatory
attention, the number of ESG-targeted
audits led by our internal audit teamhas naturally increased. In addition,reflecting the integration of ESG within
our organisation and processes, ESG
is becoming an area of considerationeven in audit reviews with a larger
scope, for instance when looking at an
investment platform.

the regulatory documentation andregularly monitored. An annual audit isperformed by external auditors on thesefunds to ensure adherence with thoseobjectives, and to ensure engagement
and stewardship responsibilities are
fully met.

Responsible investment and stewardshippolicies are regularly reviewed to ensure
their relevance, for example in light ofpossible evolution in market trends orexternal stakeholders’ recommendations.
This report has been reviewed internallyby the Sustainability Strategic Committee
as well as by our legal and our compliancedepartment.

Case Study
AXA IM ESG Committees regularly review
stewardship-related recommendations
issued by external stakeholders. In that
respect, they considered campaign
group ShareAction’s recommendation
to “vote in support of ESG-relatedshareholder resolutions as a default
position”.52 This led AXA IM’s Corporate
Governance Committee to regularly
debate the relevance of its current
approach when analysing shareholder
resolutions. Although the Committee
confirmed the case-by-case approachtaken by AXA IM, further transparency
and explanations were disclosed
publicly in 2022 to ensure proper
understanding of the merits of suchan approach. Moreover, in 2023, theCorporate Governance Committee
approved a proposal to start disclosing
publicly, as of 2024, all voting rationale
in cases of opposition to an ESG-relatedshareholder resolution, with the aim tocontinue fostering transparency aroundour voting decisions.

52

In addition to this, AXA IM manages arange of funds for which the level of
ESG integration is significantly deeper,with specific ESG objectives set atfund launch, which are disclosed in

As of December 2023, AXA IM managed
approximately 100 funds awarded atleast one Sustainable Label (including
Towards Sustainability, SRI Label,
Greenfin, RIAA, Luxflag and CIES).
These are subject to regular audits
conducted by external auditors. In
addition, the French supervisory
authority AMF performs annual reviews
looking at certain dimensions of our
responsible investment strategy.
This includes annual controls on
the definition, communication andimplementation of our climate-related
commitments including exclusion andengagement activities.

ShareAction is a non-profit organisation that works to define high standards for responsible investment and to drive the adoption of these standards
worldwide.

AXA IM Stewardship Report 2023 85

86 AXA IM Stewardship Report 2023

AppendicesI – Full list of engagements in 2023
II – Investor initiatives supported in 2023
III –	Investment industry partnerships andcollaboration in 2023
IV – Regulatory review
V – RI Research and publications in 2023

AXA IM Stewardship Report 2023 87

Appendix I

Full list of engagements in 2023
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 financially material forthe long term. Our goal is to work closely with executives to ensure

threats are addressed before they damage investor value. The list
below details the issuers we engaged with in 2023. We are fullytransparent about our voting activities. The full 2023 voting record
can be found here.

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS

3i Group PLC

✓

✓

✓

3M Co

PUBLICHEALTHHUMAN
CAPITALCORPORATEGOVERNANCE

BUSINESSETHICS

✓

✓

✓

✓

✓
✓

✓

Abu Dhabi National Energy Co
PJSC✓

ACEA SpA✓✓

Activision Blizzard Inc
AdaptHealth Corp✓✓

AddTech AB✓✓

Adecco Group AG✓

Adecoagro SA✓✓

Aedifica SA

✓

✓

✓

Aegon NV✓

AGCO Corp✓

Agricultural Bank of China Ltd✓

Ahead DB Holdings LLC✓

Air France-KLM✓

Air Liquide SA✓

Air Products and Chemicals Inc✓

Airbus SE✓

Aker Carbon Capture ASA✓

Akzo Nobel NV✓✓✓

Alimentation Couche-Tard Inc✓

Allied Universal Holdco LLC✓

Allreal Holding AG✓✓✓

Alphabet Inc✓

Amaggi Exportacao eImportacao Ltda

✓

✓

✓

✓

✓

✓

✓

✓

Amazon.com Inc✓

Amcor PLC

✓
✓

✓

✓

✓

American Water Works Co Inc
Amphenol Corp✓✓

Altice USA Inc

American Tower Corp✓

Amundi SA
ANA Holdings Inc✓✓✓

Anglian Water Group Ltd✓✓

Anheuser-Busch InBev SA/NV✓✓

Antero Resources Corp✓

ANZ Group Holdings Ltd✓

APA Group

✓

✓

✓

✓
✓

✓

Aptiv PLC✓

88 AXA IM Stewardship Report 2023✓✓

Apple Inc
Aquis Exchange PLC✓✓

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS

PUBLICHEALTH

Arcadis NV
ArcelorMittal SAHUMANCAPITAL✓✓

Arkema SA✓

Aroundtown SA✓✓

Array Technologies Inc✓✓

Ascent Resources LLC

✓

✓
✓

✓

✓

✓
✓

Assistance Publique Hopitauxde Paris✓

Assura PLC✓

Atmos Energy Corp✓✓

Atrium Ljungberg AB

✓

✓

✓

✓

Autodesk Inc✓

Autostrade per l'Italia SpA✓

AutoZone Inc✓✓✓

Australia Government Bond✓✓✓

Axfood AB✓

Bacardi Ltd✓

Ball Corp✓

Banca Comerciala Romana SA✓

Banca Transilvania SA

✓

✓

✓

✓

Banco Bilbao Vizcaya Argentaria
SA

✓
✓

✓

Banco Santander SA✓

Bandai Namco Holdings Inc✓✓✓

Bank of America Corp✓

Bank of China Ltd✓

Bank of Montreal✓

Bank of Nova Scotia/The✓

Bank Rakyat Indonesia Persero
Tbk PT✓

Banque Federative du Credit
Mutuel SA✓

BASF SE

✓

✓

✓

✓
✓

✓

Bayer AG✓

Bayerische Motoren Werke AG✓

Belimo Holding AG✓✓

BHP Group Ltd
Big Yellow Group PLC✓✓

ASML Holding NV

Banco de Chile

BUSINESSETHICS✓

Archer-Daniels-Midland Co

Assicurazioni Generali SpACORPORATEGOVERNANCE✓✓

Blackstone Mortgage Trust Inc✓

Blancco Technology Group PLC

✓

✓

✓
✓

✓

✓

✓

BNP Paribas SA✓

Bossard Holding AG

✓

✓

✓

Bouygues SA

✓

✓

✓

BP PLC✓✓✓AXA IM Stewardship Report 2023 89

Appendix I

Full list of engagements in 2023

ISSUER NAME

CLIMATECHANGEBPCE SA✓

Bpifrance✓

Brambles Ltd

RESOURCES &ECOSYSTEMSSOCIALRELATIONS

PUBLICHEALTHHUMAN
CAPITALCORPORATEGOVERNANCE

✓

✓

✓

Bridgestone Corp
Bright Horizons Family
Solutions Inc✓

Brink's Co/The✓

British Land Co PLC/The✓

Bundesobligation

✓

✓

✓
✓

Bunge Global SA✓

Bunge Ltd✓

Bureau Veritas SA✓

Cadence Design Systems Inc✓

Cadent Finance PLC✓

Caisse de Depot et Placement
du Quebec✓

Caixa Geral de Depositos SA✓

Callon Petroleum Co✓

Canadian Imperial Bank ofCommerce✓

Capgemini SE

✓

✓
✓

✓

Carlsberg AS✓✓

Carmila SA✓✓

Carnival Corp✓

Carrefour SA

✓

✓
✓
✓

✓

Castellum AB

✓

✓

✓

Catena AB✓✓✓

Caterpillar Inc

✓

✓

✓

CCL Industries Inc✓

Cembra Money Bank AG✓✓✓

CenterPoint Energy Inc✓

Central Garden & Pet Co✓✓

Central Japan Railway Co

✓

✓

✓

Charoen Pokphand Foods PCL✓

Chemours Co/The✓✓

Chevron Corp✓

China Construction Bank Corp✓✓

Cie Generale desEtablissements Michelin SCA✓

Cie de Saint-Gobain SA✓

Citycon Oyj✓

Clarion Housing Group Ltd✓

90 AXA IM Stewardship Report 2023✓✓

Cencosud SA

Charles River Laboratories
International Inc✓✓

Carbios SACA
Care Property Invest NV

BUSINESSETHICS✓✓✓✓ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS✓

Cloud Software Group Holdings
Inc✓

Coats Group PLC✓✓

Cofinimmo SA✓✓

Cogent Communications
Holdings Inc✓

Colbun SA✓

Comcast Corp✓

Commercial Bank of Dubai PSC✓

Commerzbank AG✓

Commonwealth Bank ofAustralia✓

Compass Group PLC✓

Coca-Cola HBC AGHUMANCAPITAL

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓
✓
✓

Cornerstone Building Brands Inc✓

Cosan SA✓✓

Costco Wholesale Corp✓✓

Covivio SA/France✓

Cranswick PLC✓

Credit Logement SA✓

Credit Agricole SA✓

Credit Mutuel Arkea SA✓

Crelan SA

✓

✓

✓

✓

✓

Creo Medical Group plc✓

Crescent Energy Co✓

CRH PLC✓

Croda International PLC✓✓

CSL Ltd✓✓

Custom Truck One Source Inc✓

Czech Gas Networks
Investments Sarl✓

Daido Steel Co Ltd✓

Daiwa Securities Group Inc✓

Darden Restaurants Inc

✓

✓

✓

Dassault Systemes SE✓✓

Dave & Buster's EntertainmentInc✓

Derwent London PLC✓✓✓

Dollar General Corp✓✓✓

doValue SpA✓✓

Dow Inc✓

DP World Ltd/United ArabEmirates
DS Smith PLC

BUSINESSETHICS✓

Corbion NV

DSM- Firmenich AG

CORPORATEGOVERNANCE✓

Conagra Brands Inc
Cooperatieve Rabobank UA

PUBLICHEALTH✓✓✓✓AXA IM Stewardship Report 2023 91

Appendix I

Full list of engagements in 2023

ISSUER NAME

CLIMATECHANGE

E.ON SE✓

Ecopetrol SA✓

RESOURCES &ECOSYSTEMSSOCIALRELATIONS✓✓

PUBLICHEALTHHUMAN
CAPITAL

EdenredEDP - Energias de Portugal SA✓

Eika Boligkreditt AS✓✓

Ekinops SAS✓

El Puerto de Liverpool SAB de
CV

✓
✓

✓

Eli Lilly & Co✓

Elia Transmission Belgium SA✓

ELO SACA✓

Emirates NBD Bank PJSC✓

Enagas SA✓

EnBW Energie BadenWuerttemberg AG✓

Enel SpA✓Engie SA✓Enterprise Holdings Inc✓

Entra ASA✓

Equinor ASA✓

Eramet SA✓

Essential Utilities Inc✓

Essity AB✓✓✓

Electronic Arts Inc

✓
✓

✓

✓

✓
✓

✓

Eurazeo SE✓

Euroapi SA
European Investment Bank✓✓

Evonik Industries AG
Fabege AB

✓

✓

✓

✓

✓

Fastighets AB Balder✓✓

Federative Republic of Brazil

✓

✓

✓

✓

✓

✓

First Solar Inc✓

Fiserv Inc✓✓

FUJIFILM Holdings Corp✓

Gaztransport Et Technigaz SA✓✓

GB Group PLC

✓

✓

✓

Gecina SA✓

Generac Holdings Inc✓

General Mills Inc

✓

✓
✓

✓

✓

✓

✓

General Motors Co
Getty Images Holdings Inc✓

GFL Environmental Inc✓

92 AXA IM Stewardship Report 2023✓✓

FinecoBank Banca Fineco SpA

GEA

BUSINESSETHICS✓✓

Eiffage SA

Electricite de France SA

CORPORATEGOVERNANCE

✓
✓

✓

✓
✓

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS

PUBLICHEALTHHUMAN
CAPITAL

Grafton Group PLC
Grainger PLC

✓

✓

✓

✓

✓

✓

Graphic Packaging Holding Co

✓

✓

✓

Great Portland Estates PLC✓✓✓

Hana Financial Group Inc✓✓✓

HEICO Corp
Heimstaden AB✓✓

Heineken NV✓✓

Helical PLC✓✓

Hemso Fastighets AB✓

Herbalife Ltd✓✓✓

Hermes International SCA✓

Hexagon AB✓

Hilton Worldwide Holdings Inc✓

Hindalco Industries Ltd

✓

✓
✓
✓

Honda Motor Co Ltd
Howard Hughes Corp/The✓✓

Groupe SEB France SAS
HDFC Bank Ltd

✓

✓

✓

✓

✓

HSBC Holdings PLC✓

Hufvudstaden AB✓

Iberdrola SA

✓

ICADE

✓

✓

✓

✓

Icahn Enterprises LP✓

IHS Holding Ltd✓

Industrial & Commercial Bank of
China Ltd✓

Industrias Penoles SAB de CV✓

ING Groep NV✓

Ingredion Inc✓

Inmobiliaria Colonial Socimi
SA✓Inter-American Investment Corp✓

International Game Technology
PLC

✓

✓
✓

✓

✓

✓

Interpump Group SpAIntesa Sanpaolo SpA

BUSINESSETHICS✓

Grand City Properties SA

Greystar Real Estate Partners
LLC

CORPORATEGOVERNANCE✓✓

Iren SpA✓

Irish Residential Properties REIT
PLC✓

Italgas SpA✓

Jacobs Solutions Inc

✓

Japan

✓

JD Sports Fashion PLC

✓

✓

✓

✓
✓

✓

✓

✓

AXA IM Stewardship Report 2023 93

Appendix I

Full list of engagements in 2023

ISSUER NAME
Jigsaw Funding PLC

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS✓

PUBLICHEALTHHUMAN
CAPITAL✓

JPMorgan Chase & Co✓

Kaiser Aluminum Corp✓✓

Kamigumi Co Ltd
KazMunayGas National Co JSC✓

KBC Group NV✓

Kering SA

✓

✓

✓

✓

✓

Kerry Group PLC✓

Kin & Carta PLC✓

Klepierre SA✓

Kojamo Oyj✓✓

Koninklijke Ahold Delhaize NV✓✓

Koninklijke Philips NV✓✓✓

Korian SA✓

Kroger Co/The✓

Kuntarahoitus Oyj✓

La Banque Postale SA✓

Land Securities Group PLC✓

LANXESS AG

✓
✓

✓

✓

LEG Immobilien SE✓✓

Liberty Latin America Ltd✓

LKQ Corp✓

Lloyds Banking Group PLC✓✓✓

Loews Corp✓

LondonMetric Property PLC✓

Lowe's Cos Inc✓

Lumen Technologies Inc

✓

✓

✓
✓

✓

LVMH Moet Hennessy Louis
Vuitton SE

✓

✓

✓

LyondellBasell Industries NV

✓

✓

✓

✓

Manhattan Associates Inc✓✓✓

Marshalls PLC✓✓✓

Marubeni Corp
Masdar Abu Dhabi Future
Energy Co✓✓✓

McDonald's Corp✓

Mediobanca Banca di Credito
Finanziario SpA✓

Medline Industries Inc✓

MercadoLibre Inc✓

94 AXA IM Stewardship Report 2023✓✓

Marfrig Global Foods SA

Martin Marietta Materials Inc

✓

✓

✓

LXI REIT Plc

Marsh & McLennan Cos Inc

BUSINESSETHICS✓

Johnson Matthey PLC

Legrand SA

CORPORATEGOVERNANCE

✓
✓

✓

✓

✓

CLIMATE
CHANGERESOURCES &ECOSYSTEMS

Mercialys SA✓✓

Merlin Properties Socimi SA✓

ISSUER NAME
Mercedes-Benz Group AG

SOCIALRELATIONS

PUBLICHEALTH✓

Meta Platforms Inc

HUMAN
CAPITAL

Metso Oyj

✓
✓

✓
✓

✓

Microsoft Corp✓

MISC Bhd✓✓

Mitsubishi Heavy Industries Ltd✓✓

Mitsubishi UFJ Financial Group
Inc✓

Mizuho Financial Group Inc✓

Mondelez International Inc

✓

✓
✓

✓

✓

Morgan Advanced Materials PLC

✓
✓

✓

✓

Motorola Solutions Inc✓✓

MSA Safety Inc✓✓

Muyuan Foods Co Ltd✓✓

MVM Energetika Zrt✓

National Australia Bank Ltd✓✓

National Bank of Canada✓✓

National Grid PLC✓

Natura & Co Holding SA✓

NatWest Group PLC✓

Nederlandse Waterschapsbank
NV

✓

✓

✓

Nemetschek SE✓

Neoen SA
Neste Oyj

BUSINESSETHICS✓MHP SE

Montea NV

CORPORATEGOVERNANCE✓✓

Nestle SA

✓

✓
✓

✓

Netcompany Group A/S✓

Netflix Inc✓

Neurocrine Biosciences Inc✓✓

NewRiver REIT PLC✓

Nexans SA✓

Nexity SA✓

Next PLC✓

NextEra Energy Inc✓✓

NH Foods Ltd✓✓

NIKE Inc✓✓

Nintendo Co Ltd✓

Nordea Bank Abp✓

North West Electricity Networks
PLC

✓

✓

Northwest Fiber LLC✓✓

Norwegian Cruise Line Holdings
Ltd

✓

✓

✓
✓

✓

✓

AXA IM Stewardship Report 2023 95

Appendix I

Full list of engagements in 2023

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMS✓

Novartis AG✓

Novelis Inc/Ontario✓

Novo Banco SA✓

SOCIALRELATIONS

PUBLICHEALTHHUMAN
CAPITAL✓

NSI NV✓

Nucor Corp✓

Obayashi Corp✓✓

O-I Glass Inc✓

ONE Gas Inc✓

Open Text Corp✓

Orange SA

✓
✓

✓

✓

✓
✓
✓

✓

✓
✓

✓

Penske Truck Leasing Co LP✓

Pernod Ricard SA✓✓

Pertamina Geothermal Energy
PT

✓

✓

Petroleo Brasileiro SA✓

Places for People Homes Ltd✓

Prestige Consumer Healthcare
Inc✓

Primary Health Properties PLC✓

Procter & Gamble Co/The

✓
✓

✓

✓

✓

✓

✓

✓

Prosus NV✓

Province of British Columbia
Canada✓PRS REIT Plc/The

✓

✓

✓

Prysmian SpA✓

PSA Banque France SA✓

PSP Swiss Property AG

✓

✓

✓

Publicis Groupe SA✓

Puma SE✓✓

Qantas Airways Ltd✓✓

Queensland Treasury Corp✓

Raiffeisen Bank International AG✓

Rain Carbon Inc✓

Rational AG

✓
✓
✓

✓

✓

Regeneron Pharmaceuticals Inc✓

Reliance Industries Ltd✓

Reliance Steel & Aluminum Co✓

96 AXA IM Stewardship Report 2023✓✓

Peabody Trust

Redeia Corp SA✓✓

Otsuka Corp

Qatar National Bank QPSC✓✓

Ocado Group PLC

Prologis Inc✓✓

Novolex Holdings LLC

Penske Automotive Group Inc

BUSINESSETHICS✓

Novo Nordisk A/SPark Hotels & Resorts Inc

CORPORATEGOVERNANCE✓✓

ISSUER NAME

CLIMATECHANGERELX PLC✓

Renault SA✓

Repsol SA✓

RESOURCES &ECOSYSTEMSSOCIALRELATIONS

PUBLICHEALTH✓

Republic of Colombia✓

Republic of Turkey✓✓

Republic Services Inc✓✓

Royal Bank of Canada

✓
✓

✓

✓
✓

✓

✓

✓
✓

Safestore Holdings PLC

✓

✓

✓

Sagax AB✓✓✓

Sandoz Group AG✓✓✓

Sanwa Holdings Corp✓

SAP SE✓

Saudi Arabian Oil Co✓

SBAB Bank AB

✓

✓

✓
✓

Schneider Electric SE✓

SCOR SE✓

Segro PLC✓

Service Corp International/US✓

Shaftesbury Capital PLC✓

Shell PLC✓

Sherwin-Williams Co/The
Shurgard Self Storage Ltd

✓

✓
✓

✓

✓

✓

✓

Signify NV✓

Sika AG✓

Simmons Foods Inc✓

Sirius Real Estate Ltd✓✓✓

Siemens AG

✓

✓
✓

✓

SKAN Group AG
Smith & Nephew PLC✓

Smurfit Kappa Group PLC

✓

✓

✓

✓

✓
✓

✓

✓
✓

✓

✓

Sodexo SA✓

SOITEC✓

Solvay SA✓

Sopra Steria Group SACA
Spain Government Bond✓✓

Societe Generale SA
Societe Du Grand Paris EPIC✓✓

Snap-on Inc
Sociedad Quimica y Minera deChile SA✓✓✓

Sirius XM Holdings Inc

Snam SpA

BUSINESSETHICS✓✓Royal Caribbean Cruises Ltd

Sanlam Ltd

CORPORATEGOVERNANCE✓

Rio Tinto PLC
Rogers Communications Inc

HUMAN
CAPITAL✓✓

AXA IM Stewardship Report 2023 97

Appendix I

Full list of engagements in 2023

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMS✓✓SOCIALRELATIONS

PUBLICHEALTHHUMAN
CAPITAL

Spirent Communications PLC
SSE PLC
Stagwell Inc✓✓

Statnett SF✓✓✓

Stellantis NV✓

Stevanato Group SpA✓

Suez SACA✓

Sumitomo Mitsui Financial
Group Inc✓Sun Communities Inc✓

SunOpta Inc

✓

✓
✓

✓
✓

Suntory Holdings Ltd✓

Supermarket Income Reit PLC✓

Swedbank AB✓

Swiss Prime Site AG✓

Symrise AG

✓

✓

✓

✓

✓

✓

✓

System1 Inc✓✓✓

TAG Immobilien AG✓✓✓

Technip Energies NV✓

Technoprobe SpA✓

Teleperformance SE
TenneT Holding BV✓

Terna - Rete Elettrica Nazionale✓

Tesla Inc
Tetra Tech Inc
Texas Instruments Inc

✓

✓

✓

✓

✓

✓
✓

✓

✓

✓

Tokyo Metro Co Ltd
Toronto-Dominion Bank/The✓

TotalEnergies SE✓

Toyota Motor Corp

✓

✓

✓

✓

✓

✓

Trainline PLC✓

Tritax EuroBox PLC✓

Tritax Big Box REIT PLC✓✓

Ubisoft Entertainment SA✓✓✓

UCB SA✓

Unibail - Rodamco -Westfield✓

UniCredit SpA✓

Unilever PLC✓

Unisys Corp✓

UNITE Group PLC/The✓

United Parcel Service Inc✓

98 AXA IM Stewardship Report 2023

BUSINESSETHICS✓

Standard Building Solutions Inc

TC Energy Corp

CORPORATEGOVERNANCE

✓
✓
✓
✓

✓

✓

ISSUER NAME

CLIMATECHANGERESOURCES &ECOSYSTEMSSOCIALRELATIONS

PUBLICHEALTHHUMAN
CAPITALCORPORATEGOVERNANCE

United Therapeutics Corp✓

Universal Music Group NV✓

UPM- Kymmene Oyj
Urban Logistics REIT PLC

✓

✓

✓

✓

✓

Valeo SE
Valmet Oyj✓

Veolia Environnement SA

✓

✓

✓

✓

Vestas Wind Systems A/S✓

Vicat SA✓

Vinci SA✓✓✓

Vivendi SE✓

Volkswagen AG✓

Volvo Car AB✓

Vonovia SE✓

Wallenstam AB✓

Walmart Inc

✓
✓

✓

✓

✓

Warehouses De Pauw CVA✓

Waste Connections Inc✓

Waste Management Inc

✓

✓

✓
✓

✓

Wavestone✓✓

Westpac Banking Corp✓

WH Group Ltd
White Cap Parent LLC

✓

✓

✓

✓

Wihlborgs Fastigheter AB✓

Windstream Services LLC

✓

✓

✓

Worldline SA/France
WP Carey Inc✓✓

WPP PLC
Yorkshire Building Society✓✓✓

Verallia SA

Weir Group PLC/The

BUSINESSETHICS✓✓

AXA IM Stewardship Report 2023 99

Appendix II

Investor initiatives supported in 2023
ThemesOrganisation

Description

StatusDate

Environment

CDP (Carbon
Disclosure Project)

CDP works with shareholders and corporations to disclose thegreenhouse gas emissions of major corporations.

Member2006

Environment

ChemSec

Founded in 2002, ChemSec engages the work of chemists,
political scientists, business experts and communicators, among
others. Hazardous chemicals can be found in clothing, consumer
electronics, packaging and many other products which surround us
in our everyday lives. According to ChemSec, hazardous chemicals
spread throughout the environment, increasing the risk of cancer
and infertility, among other things. They want to prevent this fromhappening. ChemSec also coordinates the Investor Initiative on
Hazardous Chemicals (IIHC), which aims to reduce the impacts
on human health and the environment from the manufacture ofhazardous chemicals. The investor led collaborative engagement
initiative comprises over 50 institutional investors with $11 trn
under management or advice.

Member of thecollaborative
engagement initiative.

2022

ClimateClimate Action 100+

The Climate Action 100+ coalition aims to engage and work withcompanies and industry members to communicate the needfor greater disclosure around climate change risk and company
strategies aligned with the Paris Agreement

Signatory

2018

ClimateClimate Bonds
Initiative

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

Member. Particular
involvement in the"brown to green
initiative"

2016

ClimateIIGCC

The IIGCC’s mission is to mobilise capital for the low carbon
transition by working with business, policymakers and fellow
investors. IIGCC works to support and help define the public
policies, investment practices and corporate behaviours that
address the long-term risks and opportunities associated withclimate change. Members consider it a fiduciary duty to ensure
stranded asset risk or other losses from climate change areminimised and that opportunities presented by the transition to a
low carbon economy – such as renewable energy, new technologies
and energy efficiency – are maximised

Member of:• Corporate Programme2014• PAII• Property group• Real Estate working
group• Co-Chair of :• Policy Advisory Group

ClimateInitiative Climat
International

Initative Climat International, a global practitioner-led communityof private markets investors that seek to better understand andmanage the risks associated with climate change. The iCI is
supported by the Principles for Responsible Investment (PRI), isa Supporting Partner of The Investor Agenda, and is open to all
private markets firms and investors.

Member2023

Net Zero

Net Zero AssetManagers

The Net Zero Asset Managers initiatives will play a critical leadershiprole in directing the asset 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.

Signatory

2020

Net Zero

WEF - Net Zero
Carbon Cities

This project is part of the World Economic Forum’s Centre for Nature
and Climate, Climate Action Platform, Shaping the Future of Energy,
Materials and Infrastructure, and Shaping the Future of Urban
Transformation Platforms. The mission is to create an enabling
environment for clean electrification and circularity, resulting inurban decarbonization and resilience. The program aims to do thisby fostering public private collaboration to bridge the gap across theenergy, built environment and transport sectors.

Member

2021

Net Zero

Carbon Risk Real
Estate Monitor(CRREM))

CRREM is the leading global standard and initiative for operational
decarbonization of real estate assets.

Member of the ScientificCommittee

2022

100 AXA IM Stewardship Report 2023

ThemesOrganisation

Description

StatusDate

Biodiversity

Finance for
Biodiversity
Foundation (FfB)

Community of investors working collaboratively on metrics,
engagement and global advocacy in the field of biodiversity (FfB
Foundation members are all FfB Pledge signatories). The aim of theFoundation is to support a call to action and collaboration between
financial institutions via working groups, as a connecting body forcontributing signatories and partner organizations. Finance for
Biodiversity (F4B) aims to increase the materiality of biodiversity infinancial decision-making, and so better align global finance withnature conservation and restoration.

Member, Co-chair of
the Impact Assessment
Working Group in 2023

2021

Biodiversity

Nature Action 100

NA100 is a global investor engagement initiative focused on driving
greater corporate ambition and action to reverse nature andbiodiversity loss. The initiative was formally launched in 2023. The
initiative engages companies in key sectors that are deemed to besystemically important in reversing nature and biodiversity loss
by 2030. The initiative’s Secretariat and Corporate Engagement
Working Group is co-led by Ceres and the IIGCC, and the initiative’sTechnical Advisory Group is co-led by the Finance for Biodiversity
Foundation and Planet Tracker. AXA IM was originally a memberof the launching investor group and is currently a member of thesteering group.

Member of the Steering
Group

2021

Biodiversity

FAIRR

The FAIRR Initiative facilitates collaborative investor engagementswith companies on some of the most material issues linked
to intensive animal production, such as labour risk, protein
diversification and supply chain resilience.

Member2023

These engagements are supported by investor coalitions withtrillions of dollars in assets under management (AUM), and throughcollective investor action, FAIRR encourages companies to improveupon their management practices to protect returns and enhance
performance on selected ESG issues.
AXA IM joined a FAIRR collaborative engagement on biodiversity
focused on waste and pollution. This initiative in particularaddresses the topic of the impact of livestock manure waste on
biodiversity. As well as targeting ten publicly listed pork and chicken
producers with material shares in their respective markets, thisengagement will also target two fertiliser companies whose rangeof services includes the extraction and marketing of nutrients frommanure.
Biodiversity

Finance Sector for
Finance Sector Deforestation Action (FSDA) members act toDeforestation Action eliminate commodity-driven deforestation from portfolios and drive
progress towards a net zero, nature-positive economy. Launchedat COP26, Finance Sector Deforestation Action (FSDA) brings
together 36 financial institutions with more than (US) $8 trillion in
assets under management who are working toward eliminating
agricultural commodity-driven deforestation risks (from cattle, soy,palm oil, pulp, and paper) in their investment and lending portfolios
by 2025.

Member2023

Biodiversity

Investor Initiativeon Hazardous
Chemicals

ChemSec coordinates the Investor Initiative on Hazardous
Chemicals (IIHC), an investor-led collaborative engagement
initiative involving 60+ participating investors and theirrepresentatives with over $11 trillion under management or advice.
The initiative aims to reduce the adverse impacts of hazardous
chemicals and thereby its members’ exposure to the financial risks
to which they are linked. The members engage in ongoing dialogues
with the world’s largest publicly traded chemical companies.

Member2023

Just
Transition

Institut de la Finance “Investors for a Just Transition” is a coalition of French investors
set-up under the auspices of the Institut de la Finance Durable.
Durable - Investors
for a Just Transition It aims to engage companies on the Just Transition thematic,
identifying best practices and pushing laggards for change. The
working groups will tackle 4 sectors: Energy, Transport, RealEstate/ Buildings & Construction and Agri-Food.

MemberLead of the WG Energy

2021

AXA IM Stewardship Report 2023 101

Appendix II

Investor initiatives supported in 2023
ThemesOrganisation

Description

Human Rights Big tech and human The Council on Ethics of the Swedish National Pension Funds
rights - Investor(AP-funds) has issued a new statement of its expectations ofcollaboration
global tech companies on human rights. The expectations
demand that tech giants reinforce measures to respect humanrights and fully align their work with the UN Guiding Principles
on Business and Human rights. AXA Investment Managers
signed this statement in 2020 (please refer to our AXA IM 2020
Active Ownership and Stewardship Report). The Council on
Ethics has therefore, in cooperation with the Danish Institutefor Human Rights, produced a document for the tech sector
outlining its long-term expectations of how the sector should
work strategically on human rights. A larger group of investors,
including AXA Investment Managers, has been engaged during the
preparation of the document.

StatusDate

Member2020

In December 2022, the group decided to start a structured
collaborative engagement programme with tech companies
on human rights:• Three-year engagement starting Jan 2023
• Builds on the investor expectations the Council on Ethics
developed in cooperation with the Danish Institute• of Human Rights in 2020.
• The engagement objectives and the KPI framework align with
UNGPs, Ranking Digital Rights and SASB.
• The intention is to closely cooperate with other initiatives, esp.
Investor Alliance for Human Rights and the• WBA’s Digital Inclusion Collective Impact Coalition (CIC).
• Establish constructive dialogues to influence companies to better
mitigate, manage and report on the• human rights impacts of their platforms (and their businessmodels).
Human Rights Advance

Advance is a stewardship initiative launched by the PRI in 2022
where institutional investors work together to take action onhuman rights and social issues. Investors use their collective
influence with companies and other decision makers to drive
positive outcomes for workers, communities and society. Within
the initiative, the PRI will support a range of activities, including
investor collaborative engagement with companies, along withpotential further escalation where needed. The PRI will also
support investor engagement with policymakers and otherstakeholders to make progress on the overall goal. Engagement
has started with 40 companies in the metals & mining andrenewables sector.

Participant of theinitiative

2022

HealthTech, Mental andWellbeing initiative

The initiative aims to help tech companies define policies andimplement measures to mitigate the potential negative impact oftechnology on their end consumers' mental health and well-being.
This newly formed coalition of investors, initiated by AXA IM andSycomore AM, will engage with companies in the hardware, media,
internet, gaming, software, edtech and the telecommunications
space to raise awareness and to ensure that tech companies aredeveloping action plans to mitigate end-consumer mental healthand wellbeing issues

Founding member

2023

Diversity

30% Club France
Investor GroupThe 30% Club Investor Group's purpose is to: co-ordinate theinvestment community’s approach to diversity, in particular to
explain the investment case for more diverse boards and senior
management teams; exercise our ownership rights, including
voting and engagement, to effect change on company boards
and within senior management teams; encourage all investors toengage on the issue of diversity with chairs of boards and senior
management teams.

Chair of the Frenchgroup in 2021, Member
since 2022

2020

102 AXA IM Stewardship Report 2023

ThemesOrganisation

Description

Status

Date

Diversity

30% Club Japan
Investor GroupThe 30% Club Investor Group's purpose is to: co-ordinate theinvestment community’s approach to diversity, in particular to
explain the investment case for more diverse boards and senior
management teams; exercise our ownership rights, including
voting and engagement, to effect change on company boards
and within senior management teams; encourage all investors toengage on the issue of diversity with chairs of boards and senior
management teams.

Member of Investor
Group since 2022

2022

HealthAccess to Medicine
Foundation

The ATMF is an independent, non-profit organisation based in the
Netherlands. Its mission is to transform the healthcare ecosystem
by motivating and mobilising companies to expand access totheir essential healthcare products in low- and middle-income
countries. 130+ institutional investors – collectively managing
assets in excess of $21 trillion USD– have already signed theinvestor statement in support of the ATMF, committing to use its
research findings in their investment analysis and engagementswith companies.

Donor and member

2018

Governance

Assogestioni

In 2023, AXA IM joined the Investment Manager’s Committee of
Assogestioni - the Italian association of asset managers. It aims
to promote collective engagement initiatives, facilitating theappointment of members of boards of directors and statutory
auditors’ boards through the slate voting system. As member of theInvestment Managers’ Committee, AXA IM contributed to selecting
potential candidates and submitting minority slates at the AGMs of
Italian listed companies.

Member of theInvestment
Management
Committee

2023

GovernanceInternational
Corporate
GovernanceNetwork (ICGN)

Led by investors responsible for assets worth around $US 70
trillion, ICGN advances the highest standards of corporate
governance and investor stewardship worldwide in pursuit oflong-term value creation, contributing to sustainable economies,
societies, and the environment. This is achieved through acomprehensive international work programme based around the
ICGN Global Governance Principles and ICGN Global Stewardship
Principles.

Global GovernanceCommittee member

2022

Governance

Eumedion

Eumedion represents the interests of institutional investors in thefield of corporate governance and sustainability. All institutional
investors that hold shares in Dutch listed companies can becomea member of Eumedion. Eumedion is committed to promote
good corporate governance and sustainability policies at Dutch
listed companies and to promote engaged and responsible
shareholdership by its members.

Member2014

Member of Proxinvest
Steering Committee

2022

Eumedion wants to achieve this by:• committing itself to the conservation of an attractive investment
climate and an adequate protection of the position ofshareholders. Eumedion does this by consulting with relevant
policy makers and influencing relevant legislation and regulation;• supporting its members to act as engaged and responsible
shareholders. Eumedion does this among other things by facilitating
dialogues between its members and Dutch listed companies;• being a leading research and knowledge center for its membersin the field of corporate governance and sustainability.
Governance

Proxinvest

Proxinvest helps institutional investors with global asset portfolios
to understand the regulatory diversity in Europe by providing
corporate governance research and proxy voting advice based on
local market expertise. Governance structures and shareholder
rights vary widely in different European markets depending on
legal framework and cultural traditions. Pursuing a consistent
proxy voting or corporate governance engagement policy acrossmarkets therefore can be challenging for global investors

AXA IM Stewardship Report 2023 103

Appendix II

Investor initiatives supported in 2023
ThemesOrganisation

Description

StatusDate

ImpactInvesting

GIIN (Global Impact
Investing Network)

The GIIN focuses on reducing barriers to impact investment
so more investors can allocate capital to fund solutions to theworld's most intractable challenges. We do this by building criticalinfrastructure and developing activities, education, and researchthat 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 eventson compelling topics

2013

Member of the GIIN
advisory group for
listed equity
ImpactInvesting

Impact Management The IMP is a forum for building global consensus on how tomeasure, manage and report impact
Project

Investor advisorycommittee

2017

ImpactInvestingOperating principles The Operating Principles for Impact Management provide aframework for investors to ensure that impact considerations arefor Impact
purposefully integrated throughout the investment life cycle. The
Management
Impact Principles bring greater discipline and transparency to theimpact investing market, requiring annual disclosure statements
and independent verification of Signatories' impact management
systems and processes.

Signatory

2019

ImpactInvesting

ImpactDisclosure
Taskforce

The Impact Disclosure Taskforce (the “Taskforce”) was establishedto promote transparency and accountability among corporates
and sovereigns regarding their intentions and progress towards
advancing the UN SDGs

Member2023

The guidance supports entities committed to addressing
development needs and reducing global inequality to accessgrowing pools of sustainable capital.
Responsible
Investment

The AFG is the French industry body for asset management.
Association
Française de Gestion(AFG) - Responsible
Investment
and Corporate
GovernanceCommittees

Member

26/02/96

Responsible
Investment

European Fund and The EFAMA is the European industry body for asset management.
Asset Management
Association (EFAMA)
Stewardship and
ESG Standing
Committee

Corporate Member

06/11/04

Responsible
Investment

FIR (Forum pourl’Investissement
Responsable)

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

Member of:

17/03/03

Responsible
Investment

PRI (Principles
for Responsible
Investment)

The PRI is the world’s leading proponent of responsible
investment. It works to understand the investment implicationsof ESG factors and to support its international network of investor
signatories in incorporating these factors into their investment
and ownership decisions.

104 AXA IM Stewardship Report 2023

• Circular Economy WG• Corporate Purpose
WG• Dialogue &Engagement WG• Say on Climate
and Shareholder
Resolutions WG
Member

01/05/07

ThemesOrganisation

Description

StatusDate

Responsible
Investment

Forum per laFinanza Sostenibile(ItaSIF)The ItaSIF's purpose is to raise awareness of responsible
investing, and to encourage investors to integrate social cohesion
and sustainable development considerations in their work in
Italy. The ItaSIF is member of the European network Eurosif

Member of the
Sustainability
Committee

Jan.21

Responsible
Investment

INREV (European
Association for
Investors in NonListed Real Estate
Vehicles)

The European Association for Investors in Non-Listed Real Estate
Vehicles, incorporated in 2002, is a non-profit association locatedin the Netherlands that provides services and education forinvestors interested in the European non-listed real estate fundmarket.

ESG Committee
Member

2019

Sustainability

GRESB (Global
Real Estate
Sustainability
Benchmark)An industry-driven organisation committed to assessing thesustainability performance of real estate portfolios around theglobe

Member of several
working groups

2011

Sustainability

Observatoirede l'Immobilier
Durable (OID)

This initiative brings together stakeholders in the real estate
sector to discuss ESG issues and the state of ESG regulation acrossEurope. It was launched by Observatoire de l’Immobilier Durable.

Member

2011

Sustainability

European
Sustainable Real
Estate Initiative(ESREI)The intention is for the ISSB to deliver a comprehensive global
baseline of sustainability-related disclosure standards thatprovide investors and other capital market participants withinformation about companies’ sustainability-related risks andopportunities to help them make informed decisions.

Member2022

Sustainability

ISSB - International
Sustainability
Standard Board

The intention is for the ISSB to deliver a comprehensive global
baseline of sustainability-related disclosure standards thatprovide investors and other capital market participants withinformation about companies’ sustainability-related risks andopportunities to help them make informed decisions.

Member of the Investor 2019
Advisory Group

Sustainability

Sustainable Trading

Sustainable Trading is a non-profit membership network,
dedicated to transforming ESG practices within the financial
markets trading industry. The network brings firms together
to devise practical solutions to industry-specific ESG issues
as well as providing a mechanism for self-assessment andbenchmarking.

Founding Member

2022

Sustainable Trading members consider the environmental
impact of how the financial trading industry builds, maintains,
and operates trading infrastructure, as well as focusing on areas
such as diversity, equity and inclusion, employee wellbeing,engagement with communities and a stakeholder-oriented
approach to enterprise governance.
Sustainability

World
Benchmarking
Alliance

The Alliance is a collaborative community of over 280
organisations globally working to develop an accountability
mechanism for business action on the SDGs.
Allies play a significant role in shaping and amplifying WBA’sbenchmarks, as well as using them to inform and influence
decisions. Echoing the spirit of SDG17, they believe in the powerof cross-sector partnerships and collective action to drive
systemic progress.

Ally

Jul. 22

Sustainability

Institut de laFinance Durable

The role of the Institute on Sustainable Finance is to coordinate
and accelerate the roadmap of the French financial industry withregards to Sustainable Finance with the objective of supporting
the energy transition and the broader transformation of oureconomyMember of the Bureau

2022

AXA IM Stewardship Report 2023 105

Appendix III

Investment industry partnerships and collaboration in 2023

Statement

Involvement

Description

Start Year

FAIRR investor
engagement letteron Antimicrobial
Resistance

Signatory

FAIRR began two engagement programs
touching upon the theme of antibiotics. One
encouraging 12 quick-service restaurants to
reduce antibiotic use in their animal supply
chains, and another targeting the largest
publicly-listed animal pharmaceuticalcompanies advocating for greater transparency
in the manufacturing, marketing and sale ofantibiotics. AXA IM co-signed both series ofletters addressed to companies in the restaurant
antibiotic engagement and companies in the
animal pharmaceutical engagement.

2023

VDO Investor
Statement on
Plastics

Signatory

In 2023, the VBDO, the Dutch Association of
Investors for Sustainable Development, invited
investors to sign its statement encouraging
urgent action to reduce plastics from intensive
users of plastic packaging. We co-signed thisstatement, along with 184 other signatories,
which summarized the financial risks andexternalities imposed by continued plastic
usage, and contained recommendations forcompanies in the fast-moving consumer goods
and grocery retail sectors, to support ambitious
policies, commit to reduction targets, andaddress toxicity in their plastics value chains.

2023

106 AXA IM Stewardship Report 2023

Topic
Biodiversity

Link
https://www.fairr.
org/engagements/
animal-pharma
https://www.fairr.
org/engagements/
restaurantantibiotics

Biodiversity

https://www.vbdo.
nl/wp-content/
uploads/2023/05/
EMBARGO_VBDO_
Investor-statementon-plastics_def.pdf

Statement

Involvement

IGCC Investor letter
calling on proxyadvisor to enhance
climate advice

Signatory

Description
Led by IIGCC’s Proxy Advisor Working Group,
36 investors have supported a letter to ISS
calling on it to further integrate climate into its
proxy advice service. The letter sets out clear
investor asks for 2024 and coincides with ISS’s
Benchmark Policy Consultation.

Start Year

Topic

Link

2023

Corporate
Governancehttps://www.
iigcc.org/
media-centre/36investors-sign-lettercalling-on-proxyadvisor-to-enhanceclimate-advice

2023

Corporate
Governancehttps://
shareaction.org/
news/investorspress-businessesto-protectvulnerableworkers-amidstcost-of-living-crisis

The letter also recognises that environmental
and climate-related factors are material toinvestors’ stewardship and voting decisions aspart of their fiduciary duty to mitigate financial
risk and protect long term shareholder value.

Good Work
Coalition investor
statement

Signatory

As 14 investors with £1.64 trillion of assets
under management and advice, we are settingout our expectations of companies to protect
their lowest paid workers during the cost-ofliving crisis. Investors urge business to:• Ensure the lowest-paid workers, who aredisproportionately impacted by the risingcost of living, are adequately targeted in pay
awards that meet the current rate of inflation;• Commit on a long-term basis to paying
the real living wage to all employees
across supply chains, including third-party
contracted staff;• Provide secure work, through guaranteedworking hours and fair and accurate
contracts.

AXA IM Stewardship Report 2023 107

Appendix IV

Regulatory Review
The UK Stewardship CodeReference page

Purpose and governance
1. Purpose, strategy and culture

3-6, 58-73

2. Governance, resources and incentives

34-39, 74-81

3. Conflicts of interest
4. Promoting well-functioning markets
5. Review and assurance

52-53
40-43, 58, Appendices85

Investment approach
6. Client and beneficiary needs

82-83

7. Stewardship, investment and ESG integration

12-73, Appendices

8. Monitoring managers and service providers

80-81

Engagement
9. Engagement

7-73, Appendices

10. Collaboration

12-33, 36-39

11. Escalation

12-33, 38

Exercising rights and responsibilities
12. Exercising rights and responsibilities

40-53

PRI

Reference pagePrinciple 1: We will incorporate ESG issues into investment analysis and decision-making processes.

7-73, AppendicesPrinciple 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.

7-53, AppendicesPrinciple 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.

56-73, 82-84, AppendicesPrinciple 4: We will promote acceptance and implementation of the Principles within the investment industry.

40-43, 80, AppendicesPrinciple 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.

Japanese Stewardship Code
1. Institutional investors should have a clear policy on how they fulfil their stewardship responsibilities, and publicly disclose it.
2. Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship
responsibilities and publicly disclose it.
3. Institutional investors should monitor investee companies so that they can appropriately fulfil their stewardship
responsibilities with an orientation towards the sustainable growth of the companies.

Appendices, PRI Assessment
Report, AXA IM TCFD-Article-29
PRI Assessment Report,
AXA IM TCFD-Article-29
Reference page

Full report
52-53
7-73, Appendices4. 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.

7-53

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.

44-53

6. I nstitutional investors in principle should report periodically on how they fulfil their stewardship responsibilities, including
their voting responsibilities, to their clients and beneficiaries.

Full report

7. T o contribute positively to the sustainable growth of investee companies, institutional investors should develop skills andresources 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 their business environment and consideration ofsustainability consistent with their investment management strategies.

54-73

8. S
 ervice providers for institutional investors should endeavour to contribute to the enhancement of the functions of the entire
investment chain by appropriately providing services for institutional investors to fulfil their stewardship responsibilities.

N/A

108 AXA IM Stewardship Report 2023

Appendix V

Selected RI research and publications in 2023

Sustainability challenges facing thechemical industry: what investors need to
knowMariana Villanueva

https://www.axa-im.com/investment-institute/sustainability/sustainability-challenges-facingchemical-industry-what-investors-need-know

Biofuels and the energy transition: green
sprouts or biowashing
Olivier Eugène

https://www.axa-im.com/investment-institute/sustainability/biofuels-and-energy-transition-greensprouts-or-biowashing

Understanding and responding to thehuman cost of the green energy transition
Virginie Derue

https://www.axa-im.com/investment-institute/sustainability/social/understanding-andresponding-human-cost-green-energy-transition

Busting myths for investors tacklingbiodiversity and deforestation
Liudmila Strakodonskaya, Geoffroy Dufay

https://www.axa-im.com/investment-institute/sustainability/environmental/busting-mythsinvestors-tackling-biodiversity-and-deforestation

Biodiversity Q&A: Understanding a
powerful new investment theme
Mariana Villanueva

https://www.axa-im.com/investment-institute/sustainability/biodiversity-qa-understandingpowerful-new-investment-theme

Understanding scope 3: How responsible
investors can wres-tle with the unruliest ofemissions
Olivier Eugène

https://www.axa-im.com/investment-insti-tute/sustainability/environmental/understanding-scope3-how-responsible-investors-can-wrestle-unruliestemissions

Mind the gap: Investors’ role in balancing
fairness and compet-itiveness in executive
pay
Alexandre Prost

https://www.axa-im.com/investment-institute/sustainability/governance/mind-gap-investors-rolebalancing-fairness-and-competitiveness-executivepay

Why living wages should be considered adriver of human capital value, not a cost
Matthieu Firmian

https://www.axa-im.com/investment-institute/sustainability/why-living-wages-should-beconsidered-driver-human-capital-value-not-cost

Responsible technology: How cancompanies and investors drive digital inclusion and economic growth?
Théo Kotula

https://www.axa-im.com/investment-institute/future-trends/technology/responsible-technologyhow-can-companies-and-investors-drive-digitalinclusion-and-economic-growth

COP28: Limited expectations met withsome progress on climate finance
Virginie Derue

https://www.axa-im.com/investment-institute/sustainability/cop28-limited-expectations-metsome-progress-climate-finance

COP28: What can investors reasonably
expect?
Virginie Derue

https://www.axa-im.com/investment-institute/sustainability/cop28-what-can-investors-reasonablyexpect

AGM Season 2023: New challenges
highlight the achievements of responsible
investorsHéloïse Courault, Constance Caillet,
Alexandre Prost

https://www.axa-im.com/undefined-insightlanding/investment-institute/sustainability/
agm-season-2023-new-challenges-highlightachievements-responsible-investors

AXA IM Stewardship Report 2023 109

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