Engagement theme: Biodiversity collapse
- 16 May 2022 (3 min read)
At AXA IM, we are committed to biodiversity protection. Throughout 2021, this commitment has been continually reaffirmed through a series of actions: Reinforcement of our biodiversity strategy and enhancement of our Deforestation and Ecosystems Protection Policy;1 further integration of biodiversity issues based on continuous engagement activities; and the consideration of new biodiversity dedicated data developed by our partner Iceberg Data Lab.
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Natural capital – our oceans, forests, climate and more – is at the origin of all the benefits people and economies obtain from ecosystems. Simply put, it makes human life possible.2 The health of human populations is part of these benefits as well as the global prosperity of world economies. By disturbing both the structure and functions of ecosystems, we not only increase risks of new infectious diseases appearing, but we may also be losing access to discoveries from nature that may contribute to our collective health.3 We have seen evidence of links between biodiversity and COVID-19 and hope to learn from this experience.4
Our engagement goals and activity
In 2021, our engagement initiatives were underpinned by a new, tighter policy on ecosystem protection and deforestation, developing a campaign first started in 2020. In the fourth quarter of 2021, a specific engagement programme was launched with a selection of companies with activities around the raw materials associated with deforestation (soy, palm oil, cattle and timber), identified under the criteria of the new Deforestation and Ecosystems Protection Policy published in June 2021.
A special approach and an engagement questionnaire have been developed to facilitate dialogue with the identified companies and are informed by our knowledge sharing with CDP and WWF. The objective of this engagement is to accompany companies identified as exposed to deforestation risks in setting up a clear deforestation-free goal supported by concrete actions. Our ambition is to control the potential risks of deforestation and ecosystems conversion associated with their activities and to support a ‘forest- and nature-positive’ transformation of these companies.
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Based on first results, meetings with the target companies will be organised during 2022 to deepen discussions on key deforestation and biodiversity issues. Our ambition is to control the potential risks of deforestation and ecosystems conversion associated with their activities and to support forest- and nature-positive transformation of these companies throughout 2022- 2023.
Also, in 2021, the focus of engagement has been enlarged beyond deforestation with initial discussions conducted with companies exposed to biodiversity protection challenges in different industries. Our goal is to amplify this area of shareholder engagement in 2022.
In 2021, we signed the Finance for Biodiversity (FfB) Pledge, along with other financial institutions. One of its objectives is to engage with companies to reduce their negative (and increase their positive) impacts on biodiversity.
Outcomes and next steps
We believe we saw a positive response to these engagements globally. Companies were open to discussion and willing to progress on identifying and managing relevant biodiversity risks and opportunities, despite the complexity of the biodiversity challenge.
Disclaimer
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.