April 29, 2021
At the current rate of decarbonization, the world will have exhausted its options by 2030. We need to accelerate the transition and at AXA, we are convinced we have a decisive role to play as an insurer and investor pioneering action against climate change.
The Group has placed this challenge at the center of its strategy: the commitments in the Driving Progress 2023 plan add to the measures already launched and enable AXA to act on three levels: firmly establish the Group’s credibility as an environmental leader with an exemplary carbon footprint; accelerate the Group’s investment commitments; and act with our underwriting policy, the core of our insurance business.
“Reducing the carbon footprint of AXA’s investments serves two aims. First, we’re protecting the Group from assets that are poorly suited to the critical challenges facing society and evolving regulation, and likely to depreciate in value in the long run. More fundamentally, we want to combat global warming by accelerating the energy transition in the corporate sector, since we’re convinced of the need to act without delay.
AXA recently complemented its commitment to limiting the warming potential of its general account by announcing it would reduce the carbon footprint of this portfolio by 2025. Meeting this goal will not only require new, lower-carbon investments but progress by the companies already in the portfolio, in terms of tangible, quantifiable measures. With 300 opportunities to engage with them every year, we encourage them to set increasingly precise targets and measurable indicators of the speed of decarbonization. The effectiveness of our policy will also depend on our ability to help these companies transition through new solutions and innovative financial products, such as transition bonds.
Our action is in line with collective measures to accelerate the transition to a low-carbon economy. In addition to increasingly stringent regulation, more and more measures are being taken to help companies transform their operations. Those that do will be more resilient than the rest, as we’ve seen during the crisis. Investors are playing a decisive role in this evolution. Together, we will have achieved our mission when financing costs are considerably lower for virtuous companies.”
Finance and biodiversity
After joining the Act4nature and Business For Nature coalitions, the Group pledged its support for the Finance For Biodiversity (F4B) initiative at the UN General Assembly in 2020. AXA has also called for the creation of a Taskforce on Nature-related Financial Disclosures (TNFD).
Integrating biodiversity into the insurance business
AXA XL will soon be capable of insuring mangroves and is actively contributing to the Ocean Risk and Resilience Action Alliance (ORRAA) to build strategies for managing ocean risks.
Compliant with the French government’s socially responsible investment (ISR) standard, AXA IM’s Multi-Asset Optimal Impact fund combines positive impact and performance objectives.
Supporting the energy transition
The range of AXA IM's impact and sustainable development funds reached more than €20 billion of assets under management in 2020. AXA IM has also developed transition bonds, allocating €200 million to supporting companies through their energy transition.
“To rise to the climate challenge, we’re convinced we need to act on our insurance guarantees (recorded as liabilities), as well as our investments (assets). That’s why, on the fifth anniversary of the Paris Agreement, AXA called for the creation of a Net-Zero Insurance Underwriting Alliance, similar to the Net-Zero Asset Owner Alliance in investment. This is a shared commitment to making our core business, underwriting, a driver of transformation to carbon neutrality and action against global warming.
From 2017 to 2019, we’ve gradually excluded a growing share of coal-related business from our underwriting, and we will have fully divested from the sector by 2040. This is a crucial step, but we must go further, for example with incentive schemes for good environmental practices. In addition to investment, insurance can provide a powerful boost to the development of companies contributing to the climate transition. We’re also acting through our claim settlements, for example by helping customers rebuild more sustainably or repair their vehicles with circular economy parts. Since 2015, AXA France customers have bought around 5 million citizen insurance contracts based on this approach.
The Net-Zero Insurance Underwriting Alliance’s plans are currently being discussed by insurance and reinsurance leaders, with United Nations support. Together, we will define commitments, along with indicators for improving the way we measure negative externalities and the impact of our action. This work will be presented at COP26 in November 2021.”
Acting to adapt
AXA Climate, the Group’s entity dedicated to climate risk protection, has developed a full range of activities to improve protection for the public and private sectors: insurance, as well as services, consulting and training.
Climate School: climate risk education
AXA Climate has launched training in climate issues with its Climate School. This program includes climate risk awareness modules, as well as support aimed at empowering employees to act by anticipating and adapting to climate risks.
Committed corporate leaders
In May 2020, Thomas Buberl, CEO of AXA Group, led the CEO Action Group for the European Green Deal, comprising around 30 leaders of major corporations. Created by the World Economic Forum, this working group aims to support a “green” post-Covid recovery.