AXA IM expands its palm oil policy to protect ecosystems and fight deforestation

AXA IM expands its palm oil policy to protect ecosystems and fight deforestation 

• AXA IM has set clear guidelines¹ to limit investment in companies involved in deforestation and natural ecosystem conversion, including companies operating in the palm oil, soy, timber and cattle industries.
• AXA IM will increase engagement with companies operating in those areas to preserve biodiversity, encourage more sustainable practices and support them in their transition.
• AXA IM will exclude companies involved in highly controversial practices.
• The new policy builds on AXA IM Alts’ long-standing focus on sustainable forestry investments.

Considering the huge environmental and social impact of deforestation and natural ecosystems conversion, AXA Investment Managers has decided to extend its Palm Oil policy²  with a more comprehensive approach to Ecosystem Protection and Deforestation³ .

Launched in 2014, AXA IM’s Palm Oil policy excluded investment in companies which have failed to achieve ‘sustainable palm oil’ production certificates or faced issues such as unresolved land rights conflicts and illegal logging issues.

Through its expanded Ecosystem Protection and Deforestation policy, AXA IM is extending the ban to companies which face significant land use controversies and are responsible for biodiversity loss in relation to soy, cattle and timber.

As part of the new policy, AXA IM is also seeking to enhance active engagement activities with companies identified at risk according to the deforestation filters (palm oil, soy, timber, cattle) and encourage them to strengthen efforts to preserve biodiversity and move towards sustainable practices.

The work currently done with Iceberg Data Lab and I Care & Consult⁴  will also provide alternative sources of data on biodiversity pressures and dependencies related to industries / issuers, and will help further advance in our screening and engagement practices.

Expansion of the Palm Oil policy to the new Ecosystem Protection and Deforestation Policy: 

In addition, AXA IM will continue to build on its 30 year experience of direct investments in forestry through its alternative business unit AXA IM Alts, with a clear commitment to sustainable management in forests aligned with its guidelines in countries including France, Ireland and Finland, representing more than 58,000 hectares under management.

AXA IM’s commitment covers the ownership, management, wood production and societal use of forests in its portfolio, including:

• The preservation of forests for the future while allowing the production of wood, respecting ecosystems, maintaining biodiversity, protecting soils and water.
• Certifying forest and management practices within two years of acquisition by Forest Stewardship Council (FSC) and/or in countries with lower risk, the Programme for the Endorsement of Forest Certification (PEFC).
• Promoting the use of wood as a material that offers a real capacity to reduce emissions as an alternative to high-emission materials such as concrete or steel.
• Encouraging the regeneration of natural habitat and integration of greater levels of biodiversity into silvicultural practice
• Using parts of our forests for recreation, research and education.

Finally, AXA IM Alts Impact Investing team has invested and will keep on looking for investment opportunities in forestry companies and projects globally to conserve natural capital, mitigate climate change and build climate resilience.

Marco Morelli, Executive Chairman of AXA IM, commented: “Deforestation poses unique economic, environmental, and social challenges, including biodiversity loss, increased greenhouse gas emissions, unsustainable land use and labour issues. Through our investment practices, we have a role to play and are committed to fighting deforestation and natural ecosystem conversion, as well as supporting forest restoration to ensure habitat conservation and to limit global warming. Our new ecosystem protection and deforestation policy aims at encouraging a broader range of companies to adopt sustainable practices and accompany them in their transition.”

“With this policy we want to set a transparent and clear framework for the companies we invest in and for our clients. We explicitly present how we approach those issues through engagement and exclusions and how we also make direct investments into restoration and preservation.”

Véronique Andrieux, CEO of WWF France, said: “WWF France welcomes AXA IM’s enhanced commitments against deforestation and ecosystem conversion; it demonstrates the crucial role that the finance sector must play in this fight. As the European Commission is preparing regulatory measures to fight deforestation and ecosystem conversion, this policy is a most needed step ahead that sends a strong signal to markets and public policy-makers. It is no longer an option not to integrate ecosystem conversion issues into investment policies and decision-making.”

AXA IM is determined to tackle the impact of climate-related risks, and has made a number of key commitments to support its ambitions, detailed in its Climate Action report published today:

• We will become a Net-Zero Asset Manager and reach net-zero greenhouse gas emissions in our investment portfolios by 2050, or sooner.
• We will reduce our own carbon emissions by at least 25%by 2025 as we further our roadmap to becoming not only the world’s leading responsible investor, but a globally responsible business.
• We will exit all coal investments in OECD countries by 2030, and throughout the rest of the world by 2040.
• We are making our product range greener, launching new carbon-focused strategies and building our portfolio of green investments.
• We will promote climate transparency and sustainability awareness within our business and externally. AXA IM is dedicated to doing everything possible to meet the ambition of a cleaner, more stable environment for us all.
• We are educating our staff globally to build climate awareness, change behaviours and develop new skills to strengthen their capability to act for our climate journey.
• We are supporting our parent company, AXA Group, in its climate ambitions: through the Net Zero Asset Owner Alliance– a United Nations-led initiative of 37 global investors seeking to transition to net zero by 2050.
• We are working in tandem with AXA Group to assess methodology for Paris- aligned investing and define achievable targets: AXA Group has committed to a 20% reduction in CO2 emissions from applicable investments, between 2019 and 2025.

To read the Ecosystem protection and deforestation policy, click here.

For more information on the Climate Action report, click here.

To read AXA IM’s full TCFD report, click here.