AXA IM exceeds 2025 net zero targets – and aims higher

AXA Investment Managers (AXA IM) has delivered “material progress” on its decarbonisation objectives across its major investment activities, reporting that it has exceeded its interim targets.

In the second update to its Progress Monitor and 2023 Sustainability report, AXA IM has reported substantial reductions in the carbon intensity of its real estate, listed assets portfolios as well as the business’s own operational carbon footprint.

Across its real estate portfolios, for instance, AXA reports a 32.6% reduction in carbon intensity since 2019, exceeding its 2025 interim reduction target by 20%.

More than two-thirds (69%) of its direct real estate AUM is now in line with its Carbon Risk Real Estate Monitor (CRREM) trajectory, a global decarbonisation standard, the second year in a row that it has delivered on this target.

AXA IM also reported a 48.6% reduction in the carbon intensity of its corporate listed assets portfolio against 2019 figures, exceeding its target of -25% by 2025.

The European investment giant noted its “pivotal role” – being the largest property portfolio and asset manager on the continent – in leading the charge to decarbonise the real assets sector in Europe.

At a corporate level, the firm also reported a one-third (33%) reduction in its own operational carbon footprint (for example, in reductions across its energy, business travels, car fleet etc.) since 2019, exceeding its reduction target of 25% by 2025.

Upping reduction targets

The firm announced it will move to “ambitiously raise” its net zero financed emissions in material sectors target to 90% by 2030, after closing in on its 2025 target.

More than two-thirds (68.9%) of AXA IM’s financed emissions in material sectors are at net zero, just short of the 70% by 2025 target.

The Institutional Investors Group on Climate Change (IIGCC), a climate risk advocacy group, has set a 70% target for financed emissions, assessed as either “net zero, aligned with a net zero pathway, or subject of direct or collective engagement and stewardship actions”.

AXA also reports a fractional 0.36% coal exposure of its investments in OECD countries at the end of 2023 in line with its target of exiting all coal investments for this geography by 2030.

The firm said it has also succeeded in reaching €919 million (AU$1.48 billion) of committed investments in natural capital solutions, in line with its target set at €1.2 billion (AU$1.93) by 2028.

AXA IM executive chair Marco Morelli while recognising the firm’s already strong progress in hitting key climate targets, conceded it is “still a long way to go to reach net zero”.

“We will achieve this by continuing to decarbonise our portfolios across all asset classes, by channelling more capital towards natural capital solutions and sustainable investments, and by carrying out ever more demanding engagement activities with investee companies to support their transition.”

AXA IM said the reporting on the progress of its climate goals is part of its commitment to transparency, communicating to its stakeholders “tangibly and regularly”.