Investment Institute

Engagement theme: Climate change

  • 16 May 2022 (3 min read)

Climate change is one of the central pillars of AXA IM’s engagement with companies. While this theme is transversal and relevant to all firms from all sectors, we focus our efforts where materiality is greatest, notably energy (hence the relevance of UN SDG 7 and SDG 13), but also banks – through their lending policies as well as the building materials industry.

In 2021, as the world economy rebounded after the sharp pandemic driven drop in 2020, so did greenhouse gas emissions, helped by the highest ever level of coal power generation. It is therefore not surprising the concentration of carbon dioxide (CO2) in the atmosphere reached its highest recorded level since the industrial revolution1 . The challenges of the energy transition, i.e. weaning ourselves off hydrocarbons and fossil fuels, are still very prevalent and unchanged by the pandemic.

On the climate change front, three key moments marked 2021:

  • The IEA published a net zero roadmap for the energy sector in May, presenting a very demanding and challenging path to limit the increase in temperature to +1.5°C from pre-industrial times2 . This body of work has quickly become a reference for many discussions and a source of intense debate
  • The IPCC published an essential report in August on the physical science basis of climate change. One of its many statements is stark and clear: “It is unequivocal that human influence has warmed the atmosphere, ocean and land”3
  • In November, in Glasgow, the COP26 convened. Participating countries, although they failed to address several issues, progressed on several others and overall increased their pledges to reduce emissions

The 2015 Paris Agreement called for limiting global warming to well below 2°C and ideally 1.5°C. According to the IPCC, the world has already warmed by 1.1°C. Looking at actual emissions and current pledges, some observers concluded that the world is on track to limit the increase to below 2°C, but a less optimistic analysis pointed toward closer to 2.5°C4 . More needs to be done.

In 2021, we focused our research effort on the energy transition and the oil and gas industry. We published the following reports:

The findings from this research will be of direct use while engaging with companies in the oil and gas value chain.

Our engagement goals and activity

Regarding engagement, the year was notable for the first ‘say-on-climate’ resolutions at several annual general meetings (AGMs) where firms outlined their climate action plans. In this context, we engaged and held detailed discussions with French groups TotalEnergies and Vinci. We also signed a letter with other investors, coordinated by Climate Action 100+, to be read at TotalEnergies’ AGM highlighting potential areas of improvement in the group’s climate strategy. We also participated in collective engagements with French utility Engie5 , car maker Renault6 and Colombia’s Ecopetrol7 , three companies which went on to significantly improve their climate commitments.

Through our votes, we contributed to the election of three new board members at US oil group ExxonMobil, against the explicit wishes of the management.

Increasingly, the discussions we are having while engaging on climate are becoming more detailed and specific. Beyond the minimum requirements of having both a long-term ambition and mid-term targets aligned with Paris Agreement goals, we are asking companies to be very detailed about their actions, the alignment of governance and capital allocation with the strategy and the inclusion of their whole value chain in their climate strategy. We also encourage transparency around the implementation of these commitments through public reports. At AXA IM, we believe that this holistic approach is necessary to assess the credibility of those strategies and is consistent with the systemic nature of the energy transition. When sector frameworks exist, we encourage investee companies to set science-based targets, and we therefore supported the annual CDP-related investor statement8 .

Outcomes and next steps

Overall, although it is often difficult to identify a perfect line between engagement and action, many companies we engage with on a regular basis, individually or collectively, have improved their climate policies, committing to net zero and/or enhancing their targets.


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2021 Active Ownership and Stewardship Report
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    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

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