June 2024

Responsible Investing
AXA IM Tobacco Policy

The incidence of long term non-communicable diseases (NCDs), including cancer, cardiovasculardiseases, chronic respiratory illnesses and diabetes, is sharply rising, and these diseases are currently
responsible for most deaths worldwide. Along with physical inactivity, unhealthy diet and the harmful
use of alcohol, tobacco consumption is one of the major causes of long term NCDs1.
As a responsible investor, at AXA Investment Managers (“AXA IM”) we avoid investing in companies involved in the productionof tobacco. The negative impact of tobacco is well documented and as a result many investors are divesting from the sector.
According to the World Health Organization (WHO), it kills 8 million people per year, and circa 15% of these deaths are the resultof passive smoking2. The damage to health from tobacco products is more costly to society than that caused by alcohol or
unhealthy diets, and, unlike the former, from a health perspective, there is no safe level of exposure to tobacco These costs
largely outweigh the revenues generated by taxes on the sale of cigarettes, and governments globally are beginning to act.
In 2005 the World Health Assembly adopted the WHO Framework Convention on Tobacco Control (FCTC), one of the mostsuccessful global treaties in history, with more than 180 signing countries accounting for more than 90% of the world’spopulation. This convention led to broad changes in tobacco control measures, and guidelines have been published providing
recommendations to implement the Convention’s principles, such as the recommendation related to article 5.3 of theConvention inviting the parties to limit interactions with the tobacco industry. The organization calls the tobacco epidemic “oneof the biggest public health threats the world has ever faced”. Given the ongoing and indeed growing pressure the industry
faces, we believe that ultimately the regulatory and profitability risks regarding tobacco companies remain under-represented.
Moreover, WHO observed that the industry is in conflict with United Nations’ principles due to the fact that it uses child labor
to produce tobacco. In 2018, the head of the secretariat of the WHO FCTC, referring to International Labor Organization (ILO)

1 Noncommunicable diseases (who.int)
2 Tobacco (who.int)

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estimates, stated that about 1.3 million children a year were working in tobacco fields in 2011. The numbers are rising with ashift in tobacco growing from some of the better-off countries to some of the poorer. Even though it declined between 2000
and 2013 in some countries, it is still widespread in other countries such as Brazil, Indonesia, the USA and other countries as
Argentina, India and Malawi3.
The policy applies to companies manufacturing tobacco products and includes manufacture of cigarettes, cigars, tobacco forpipes and snuff, smokeless tobacco products and e-liquid / complete e-cigarettes as well as companies that distribute their own
label tobacco products.

Excluded Companies
Sector / Area

Exclusion criteria

Approach

Sources, qualitative review process andfrequency of update
We rely on an external data provider to prepare
an initial list of issuers in scope.

TobaccoCompanies
involved in theproduction of
tobacco (revenuegenerated byproduction of
tobacco >0%)Affiliates4 of excluded companies may
also be excluded in particular if they act
as a securities issuance entity for or act
in a similar sector as the related
excluded company..

The list is then reviewed qualitatively anddiscussed within our RI governance committees
on a regular basis, at least annually, unless a
specific event requires an intermediate
revision5 or a delay in the publication of datarequires to postpone the update.
AXA IM may override these exclusion rules
based on a qualitative analysis demonstratingthat the risks are mitigated in an efficientmanner (i.e., in that case that the company
does not generate anymore any revenue fromtobacco production). Moreover, based on
quantitative data, a parent company which isinvolved through a subsidiary may beexempted, if tobacco-related revenues are
immaterial for the group (i.e., <1% of the totalgroup’s revenues). In such case, the involved
subsidiary will be banned.

Source: Sustainalytics.

Scope
Financial instruments
The policy applies to all single-name financial instruments issued by the excluded companies or offering exposure to identifiedcompanies.
Portfolios
The policy applies in principle to all portfolios under AXA IM’s management,unless the client has given different instructions for
its mandate or the fund has been exempted for legal or risk management reasons.
The policy does not apply to:-Funds of funds composed of funds which are not under the management of AXA IM;;
Passive strategies (index funds and exchange-traded funds – ETFs);

3 Child Labour in Tobacco Growing - unfairtobacco
4 For the purpose of this policy, the term “affiliate” shall mean any entity, individual, firm or corporation, directly or indirectly, through one ormore intermediaries, controlling or controlled by excluded companies.
5 Examples given: major newsflow. The list is not systematically updated following corporate actions.

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-Funds of hedge funds;
Tenants in real estate portfolios.

The policy applies to direct product investments, overall with no look-through except when local laws or regulations require todo so.
Entities
This policy applies to AXA IM and all its affiliates worldwide, to joint ventures where AXA IM’s stake is 50% or higher, and to funds
for which the management is delegated to one of our joint ventures.

Implementation
This policy is implemented on a best-effort basis, taking into account local regulation and the best interests of both the client
and the fund’s objective. If the application of this standard dictates divestments, portfolio managers shall disinvest as soon as
possible on a best-effort basis taking into account the technical implementation timing and the portfolio impacts based onmarket conditions, liquidity and portfolio construction constraints. In practice, some targeted instruments could remain in thefunds or mandates for a period if deemed in the best interest of their clients and provided that it is compliant with the applicableLaws; however, those holdings cannot be increased6. For certain alternative products such as Collateralized Loan Obligations(“CLOs”), Mutual Securitization Funds (“FCT” in French), closed-ended alternative funds and other alternative products, if thedivestment is considered impossible, such holdings in portfolio could be kept until maturity following an internal validation
process.
The exclusion list is prepared using information from an external data provider, and although a qualitative review is performed,
AXA IM is therefore not responsible for the accuracy of this data.
The implementation of this policy is subject to compliance with asset management local laws or regulations; therefore, somespecific alternative implementation mechanisms of this policy may be put in place locally. In the EU, the implementation of thispolicy is part of the compliance with SFDR requirements as it constitutes AXA IM’s approach to consider sustainable investments
for the ‘Do No Significantly Harm’ (DNSH) criteria (i.e., applicable to Article 8 and Article 9 funds). Thus, if the application of thisstandard dictates divestments, portfolio managers shall disinvest for their product to be classified Article 8 or Article 9, following
the abovementioned implementation process.
This policy is gradually being implemented across the range of financial products to which it applies, as described above, as thelegal documentation of concerned financial products is updated when needed.

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

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