AXA IM aligns compensation of senior executives to its ESG ambitions

As part of its commitment to becoming net zero as a business and investor by 2050 to help the transition to a more sustainable world, AXA Investment Managers (AXA IM) is now including ESG targets in the remuneration of its senior executives. 

From 2023, the deferred compensation of c. 400 people that will start to be paid in 2024 will include, alongside existing criteria, the following ESG metrics according to the employee’s business area and remit:

1. The weighted average carbon intensity (WACI) to reach the target of 25% reduction in carbon intensity for corporate portfolio by 2025: for the ESG part of the deferred compensation, this metric accounts for 75% for AXA IM Core and 37.5% for transversal functions employees in scope.
2. An assets under management (AUM) target for 50% of the real estate portfolio to be aligned to the CRREM¹ trajectories by 2025: for the ESG part of the deferred compensation, this metric accounts for 75% for AXA IM Alts and 37.5% of transversal functions employees in scope.
3. The reduction of the corporate operational CO₂ footprint, to reach the interim target to reduce it by 26% by 2025: for the ESG part of the deferred compensation, this metric accounts for 25% for all AXA IM Core, AXA IM Alts and transversal functions employees in scope.

This new policy is reflected in the “AXA IM for Progress Monitor”² , a set of metrics selected due to their material contribution towards AXA IM’s ambition of becoming a leading responsible asset manager.

The AXA IM for Progress Monitor metrics sit alongside AXA IM’s financial targets and indicators as additional indications of its progress as an investor and a business. It is initially comprised of eight metrics pertaining to net zero targets around the following themes:

• Decarbonisation across the main asset classes and for the operations.
• Importance of engagement, with investee companies and as employees of a responsible asset manager.
• Solutions to consciously channel capital to companies and projects that can help accelerate the transition.

Progress towards these targets will be reported annually from 2023 and the AXA IM for Progress Monitor will evolve in time to factor in AXA IM’s commitments towards E, S and G criteria.

“As we further put sustainability at the heart of everything we do, we believe transparency and regular reporting on our progress and the challenges we may face is crucial. This is not something new at AXA IM but with the launch of the AXA IM for Progress Monitor, we are choosing to visibly position our non-financial targets alongside our financial ones and to increasingly onboard our organisation to make our employees a part of our sustainability journey. Our adjusted deferred remuneration policy which falls within this objective is key to achieve our objectives and effect change, on the road to net zero and beyond.” said Marco Morelli, Executive Chairman of AXA IM.

Notes to editors

Carbon intensity

Carbon intensity measures the relationship between revenue generated by a company and greenhouse gas emissions produced. Historically, revenue, productivity, energy usage and GHG (Greenhouse gas) emission have been closely associated, so measuring a reduction in carbon intensity is a suitable way of monitoring decarbonisation in our portfolios.

Carbon intensity is a measure of the CO2 emissions per million dollars of revenue a company generates. AXA IM calculates a weighted average of carbon intensity on revenue for all corporates hold (AXA IM Core scope only).

Real Estate decarbonisation

CRREM* (Carbon Risk Real Estate Monitor) is a real estate sector specific tool which projects a science-based pathway for real estate assets based on their sector and geography. The tool sets out industry targets for energy use intensity and carbon intensity which has been modelled to set the performance targets expected to enable alignment with both 1.5 degree or 2.0-degree scenarios, by asset class and by country.

*CRREM methodology may evolve over time. (Target set against 2022 version of CRREM pathways)