AXA IM integrates ESG metrics with pay plans

AXA Investment Managers (AXA IM) has announced it will incorporate environmental, social and governance (ESG) targets into its senior executive remuneration packages to be paid from 2024.

The firm said this effort was part of its “commitment to becoming net zero as a business and investor by 2050 to help the transition to a more sustainable world”, is contained in the AXA IM for Progress Monitor and forms part of the metrics that contribute to AXA IM’s goal of becoming a leading responsible asset manager.

The ESG standards that will impact the remuneration of certain AXA IM employees include:

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; and,
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.”

The progress monitor metrics are also aligned with the firm’s financial targets to track its development and growth as both a business and investor, situated around several net zero targets and themes including:

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

“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,” Marco Morelli, Executive Chairman of AXA IM, said.

“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.”