AXA Group

For AXA Investment Managers, Responsible Investment (RI) is, first and foremost, a commitment to integrating extra-financial criteria into portfolio management and research processes. With over ten expertises and 1,400 investment products, this integration is gradual. In 2006 AXA IM significantly strengthened its expertise by creating a new department especially dedicated to RI. This is the first step in a wider organisational strategy to review and reshape internal processes.

The team's main mission is to analyse human capital, reputation, environmental litigation, corporate governance, health & safety and other extra-financial factors which could be important drivers of investment risk and reward for a particular company or sector. The team is then responsible for helping traditional investment professionals within AXA IM integrate this knowledge into their investment decisions when such factors are likely to have an impact upon corporate stock price performance. The team's remit is to work with all ten specialist investment functions within AXA IM to help them integrate RI practices into their core investment processes.

In addition to this "mainstreaming" role, the RI team also helps the AXA IM expertises develop investment products which appeal to AXA IM customers, both retail and institutional, who have a particular interest in responsible investment (eg. real estate). This can relate to ethical values (e.g. about "controversial" sectors such as tobacco) or investment beliefs (e.g. the long-term importance of extra-financial factors as a key driver of performance).

In addition to this 7-person dedicated RI team, AXA IM also has several fund managers employed by the different AXA IM expertises who are included in this new strategic development.

This new development is sponsored at Executive Board level by Jean-Pierre Hellebuyck, Director and Vice Chairman of AXA IM, and Vice Chairman of the Supervisory board of AXA Private Equity. M. Hellebuyck is also President of the Corporate Governance Commission of the AFG (French Asset Managers Association) and member of the Board of the International Corporate Governance Network (ICGN).

PRI, a United Nations initiative, aims to encourage the integration of environmental, social and governance (ESG) issues into investment decision making providing across 6 principles a wide menu of possible actions. AXA IM joined the PRI in May 2007, significantly increasing the assets under management represented by this initiative.

One of the core pillars of AXA IM's responsible investment strategy is to help bring about the mainstreaming of responsible investment into the asset management community, beyond niche-market SRI funds. PRI is one of the key initiatives that will help AXA IM to do this.The six principles are pragmatic, process-orientated and offer a high-level and non-prescriptive framework for action. They are relevant for asset owners and investment managers and they are global in their nature and reach. PRI also offers a strong forum for AXA IM to share best practices with its peers, while ensuring continuous improvement through collaboration and learning from other members.

Applying the Principles should not only lead to better long-term financial returns but also a closer alignment between the objectives of institutional investors and those of society at large.

The Enhanced Analytics Initiative (EAI) is an international collaboration between asset owners and investment managers to encourage research providers to pay greater attention to the impact of extra-financial issues on long-term investment prospects. AXA joined the EAI in January 2007.

Every six months, the EAI identifies eight or so top providers of investment research that incorporate extra financial criteria into analysis and recommendations and stand to win at least 5 % of brokerage commissions allocated by EAI members. This Initiative works because of the scale of client demand. By joining, AXA IM has increased the total assets under management by EAI members from €1.3 to €1.8 trillion, a 38% increase.

AXA IM is a member affiliate of the European Social Investment Forum (EUROSIF). It is a non-profit members organisation promoting the concept, practice and development of sustainable and responsible investment. Current members of Eurosif include pension funds, financial service providers, academic institutes, research associations and NGO's.

Eurosif works closely with several national Social Investment Forums across Europe including the UK, Netherlands, Germany, France, Italy, Sweden and Belgium.

The French Association of Socially Responsible Investment (FIR) is a non profit organisation which brings together individuals and organisations to promote RI in France. It aims to contribute to RI public policy making, support RI research initiatives, promote socially responsible and sustainable investment practices and to act as a knowledge centre.

AXA IM is represented on the board of FIR and as such, has supported projects such as the Annual Forum for European Responsible Investment (FAIRE). This high-profile organisation is a platform for dialogue between investors and companies on companies' sustainable development policies and practices as well as on the link between financial and extra-financial performance.

The ICGN is an investor-led network allows for an international exchange of views and information about corporate governance issues. The Network's mission is to develop and encourage adherence to corporate governance standards and guidelines, and to promote good corporate governance worldwide.

• Enhanced Analytics Initiative: Within the AllianceBernstein Group, the Bernstein team has developed a thorough, company-specific research expertise. Both the sell-side and buy-side teams look at all of the factors that may affect a given company's long term investment prospects. As a result, Bernstein has regularly won the EAI's top category award since its launch.

AXA's line of conduct has not deviated on any of the sensitive social issues in which the financial sector may be indirectly involved through its investments. The Group considers that companies have neither the expertise nor the legitimacy to produce ethical positions or judgments, a task that is overseen by political institutions. International directives voice this technical and political consensus. Going forward, the Group has taken the following decisions:

Anti-personal mines (APM)review:

• The manufacturing and distribution of APMs is banned by the Ottawa Convention, signed by a large number of countries, though with the exception of the USA notably.
• In April 2006 the AXA Group announced that it would no longer hold own account investments in companies that produce or sell APMs and that it would develop a process for identifying these companies.
• The adoption of this policy, now fully implemented, thus reflected the broad-based consensus on APMs embodied in the Ottawa Convention.

Cluster bombs:

• Several NGOs believe that these weapons violate international humanitarian law and, therefore, argue that cluster bombs should be banned through an international convention like the Ottawa Convention.
• The "Oslo Process" was launched in February 2007 against this backdrop. Certain difficulties related to the technical definition of cluster bombs were raised. Nonetheless, the many governments that took part in this series of conferences promised to devise a treaty prohibiting cluster bombs "that cause unacceptable harm to civilians" between now and 2008.
• Acknowledging that there is an emerging international consensus around the banishment of certain types of cluster bombs, AXA has decided in July 2007 to begin the process of disengaging from its investments for own account in companies that produce cluster bombs.

However, the Group is not at liberty to impose its own decisions on third-party clients which entrust AXA with the management of their investments and on which the Group cannot impose such choices.