AXA IM unveils new voting policy to urge investee companies to further consider environmental and social issues
Additional ESG requirements have been added to AXA IM’s Corporate Governance and Voting policy to further integrate ESG issues into corporate governance.
Dialogue and engagement, alongside voting, remain a key priority.
Appointments within its Corporate Governance & Stewardship team.
AXA Investment Managers (AXA IM) announces a new voting policy which aims to appeal investee companies to further consider environmental and social issues.
AXA IM’s voting policy is centred on three general principles, as outlined below:
- No abstention unless in exceptional circumstances. In 2021, 98% of Annual General Meetings (AGM) - a total of 5,546 meetings - were voted at.
- Support for management. As a transition leader, AXA IM aims to support the companies in which it invests in by voting with management unless a substantial issue has arisen, or when a pre-defined limit has been crossed. When concerns about the transition journey of a company are identified, AXA IM will vote against management, support shareholder resolutions or even co-file them. In 2021, AXA IM voted against management on at least one resolution at 59% of AGMs. Each vote “against” from AXA IM will be done on a case by case basis, following a specific analysis.
- Engagement before voting against a resolution on a best effort basis, depending on several factors. AXA IM has engaged with 245 companies in 2021, climate change accounted for highest proportion of total engagements at 33%. Over 80% of engagements were linked to the UN Sustainable Development Goals (SDGs).
From this year, the new requirements that are considered and implemented within AXA IM’s voting policy are as follows:
- Boards of Directors: directors must have experience and proven track-record in managing environmental and social issues, to enable long-term sustainable value creation.
AXA IM will engage with companies to understand the nomination committee’s approach to Board appointments, and, following a specific analysis, will vote against the renewal of directors, the nomination committee chair, or any relevant member if the Board has not managed its environmental & social responsibilities properly.
Additionally, in line with AXA IM’s focus on the diversity of the Board beyond gender, AXA IM will vote against the re-election of the Nomination Committee Chair at large-cap companies in the US and UK with no ethnic representation on the Board.
- Remuneration policies: clear ESG elements must be included in the bonus or long-term incentive plan of the senior management.
The choice of KPIs used will be carefully assessed by AXA IM and should be tangible, pertinent and clearly communicated. AXA IM will engage with the companies to understand the chosen criteria, and will vote against the remuneration policy in case of a lack of (or irrelevant) criteria.
- Climate strategy: companies in sectors exposed to climate issues must have a net zero emission strategy with short, mid and long-term carbon emissions reduction targets, as well as executive remuneration aligned to climate strategy objectives. If these requirements are lacking, AXA IM could vote against the management, the Board Chairman and the CEO.
- Financial and non-financial reporting: adoption of international frameworks to report on sustainability information is required, as well as sustainability reporting that puts historical performance into context. If these requirements are lacking, AXA IM will vote against the accounts.
Additionally, AXA IM will assess the consistency of the transition plan of investee companies against their climate strategy and will ask them to report on the intermediary achievement of the objectives during the Annual General Meetings.
Clémence Humeau, Head of RI Coordination and Governance at AXA IM, said: "To play a key role in financing the transition to a greener and more sustainable world, engaging and then exercising our voting rights as an investor is a fundamental aspect of our ability to influence the decisions and the roadmap of the companies we invest in. Including these new ESG requirements within our voting policy will ensure we allocate capital to companies that have clear ESG commitments and targets."
Furthermore, to support these developments, AXA IM announces three appointments within its Corporate Governance & Stewardship team:
- Héloïse Courault as Senior Corporate Governance and Stewardship Analyst. Based in Paris, she joins AXA IM from SquareWell Partners where she was most recently Co-Head of ESG Research. Héloïse continues to sit on the Global Governance committee of the International Corporate Governance Network.
- Alexandre Prost as Senior Corporate Governance and Stewardship Analyst. Based in London, he joins AXA IM from IHS Markit.
- Constance Caillet as Corporate Governance and Stewardship Analyst, based in London.
They report to Clémence Humeau, Head of RI Coordination and Governance.
To read AXA IM’s Corporate Governance & Voting Policy in full, click here.