Warning: members of the public are being contacted by people claiming to work for AXA Investment Managers UK Limited.  Find out more information and what to do by clicking here.

Investment Institute
Sustainability

Climate Alignment Principles: How to invest in line with a +1.5˚C goal


Executive summary

As efforts to deliver on the Paris Agreement galvanise, investors are beginning to switch from simple commitments to tangible actions. We are increasingly asked by clients: “How can we invest in line with the 1.5°C goal?” This research paper explains our proposed approach, which we call our Climate Alignment Principles

There have been numerous industry efforts to establish a framework to help investors with this aim. These cover the entire process from investment governance, to policy, target setting, asset allocation and stewardship, as well as reporting and monitoring. The focus of this paper is on investment. We have covered the other sections in prior papers including our 2020 Taskforce for Climate-related Financial Disclosure Report, Climate Scenario Analysis, and Strategic Asset Allocation for a +1.5°C World

Investments aligned with a credible pathway to delivering on the Paris Agreement will need to be primarily focused on one of two objectives. These are either opportunities enabling the climate transition via new products and services, or companies which are rapidly decarbonising at a rate akin to what climate science requires to keep global warming to +1.5°C versus pre-industrial times

At AXA Investment Managers, we propose to start from a set of principles which guide our decision-making and frame the selection of tools and key performance indicators to achieve portfolio alignment. We believe that by following these principles we can effectively navigate the evolving landscape and constructively tackle the challenge of aligning our strategies with the Paris Agreement

    Not for Retail distribution

    This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.

    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.

    It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date.
    All information in this document is established on data made public by official providers of economic and market statistics. AXA Investment Managers disclaims any and all liability relating to a decision based on or for reliance on this document. All exhibits included in this document, unless stated otherwise, are as of the publication date of this document. Furthermore, due to the subjective nature of these opinions and analysis, these data, projections, forecasts, anticipations, hypothesis, etc. are not necessary used or followed by AXA IM’s portfolio management teams or its affiliates, who may act based on their own opinions. Any reproduction of this information, in whole or in part is, unless otherwise authorised by AXA IM, prohibited.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales, No: 01431068. Registered Office: 22 Bishopsgate, London, EC2N 4BQ. In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries. 

    Risk Warning

    The value of investments, and the income from them, can fall as well as rise and investors may not get back the amount originally invested.