Net zero: climate protection through investment in a low-carbon economy

The scientific evidence is clear – global warming is a reality and comes with risks and uncertainty. We all know that Our actions have consequences for nature and for our health and safety. We want to help minimize these risks and reduce greenhouse gas emissions.

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AXA’s climate strategy

“A 4-degree warmer world is not insurable.”

Thomas Buberl, CEO of the AXA Group

The fight against climate change forms part of our overall strategy – both our corporate strategy and our investment strategy. Our goal is to bring our business into line with the Paris Agreement. Strategic measures we plan to take in order to reduce long-term CO2 emissions include a net-zero target for our investments, green investments (e.g. green bonds and impact funds), support for the transition to low-carbon business models, and a complete exit from the coal industry.

No profit from coal

Coal is one of the most carbon-intensive energy sources and remains one of the biggest sources of man-made emissions that contribute to increasing the concentration of CO2 in the atmosphere. Scientific studies show that reducing coal dependency is therefore imperative if we are to minimize greenhouse gas emissions so as to limit global warming. In 2015, AXA became the first major insurance company to announce that it would start to gradually pull out of the coal industry. In concrete terms, this means that by 2030 we will no longer have any assets invested in coal companies in OECD or EU countries and nor will we insure them. We will complete our exit from coal worldwide by 2040.  

To AXA’s climate strategy.   

1.5°C “global warming potential” and net zero emissions by 2050

In line with the Paris Climate Agreement, AXA has set itself the goal of limiting the “global warming potential” of its investments to less than 1.5°C by 2050 compared to pre-industrialization levels. We also advocate the development of a methodology for measuring the temperature of financial assets. AXA has already been publishing the “global warming potential” of the investments of all AXA units on an annual basis since 2018. Between 2018 and 2020, we recorded a decrease of 0.3°C: As of the end of 2020, the “global warming potential” of AXA’s investments (general account) stood at 2.7°C. This is significantly lower than the 3.2°C market average. However, this figure also shows that concerted efforts are needed to decarbonize the economy as a whole and limit global warming to 1.5°C, as called for by scientists and policymakers so as to limit the risk of climate change impacts. 

Global warming potential of AXA’s investments and those of the benchmark

Source: AXA Group 2020 Climate Report, page 22.

Net Zero Asset Owner Alliance

Since 2019, AXA has been a member of the Net Zero Asset Owner Alliance. The members of this alliance – currently some 40 institutional investors with around USD 6.6 trillion in assets – have pledged to reduce the CO2 emissions of their investment portfolios to net zero by 2050. They also plan to collaborate to improve measurement methodology and to promote the transition to a low-carbon economy. AXA has set a reduction path and an ambitious interim target: to reduce CO2 emissions from its investments by 20% between 2019 and 2025. In this way, AXA is already making an important contribution to achieving the net zero target in the next few years. 

Reducing our CO2 footprint

Transparency about the impact of our investments is important to us, as is the disclosure of greenhouse gas emissions associated with our investment activities. As part of our commitment to the Montreal Carbon Pledge, AXA has published the CO2 footprint of its investments (equities and government and corporate bonds) every year since 2014. The data is consolidated and analyzed for all AXA country units. The data for AXA Switzerland is also included. The CO2 footprint of our investments is steadily decreasing and diminished by 36% between 2014 and 2020. This reduction is mainly due to the exit from fossil fuels and to investments in companies producing renewable energy. 

 AXA’s CO2 footprint

AXA Group 2020 Climate Report, page 26.

Support for the transition to low-CO2 business models

Transition bonds were designed by AXA and Crédit Agricole CIB. They support projects by companies that are carbon-intensive today but are working to make improvements and can play an important role in decarbonizing the economy. AXA’s Transition Bonds bridge the gap between “already green” projects that are eligible for green bond financing and those that are not but could still make great strides in reducing CO2 emissions. For example, the conversion from heavy marine diesel to liquefied natural gas engines can be financed for shipping companies until they are able to switch to wind or hydrogen-powered ships. 

How does AXA specifically invest in climate protection? 

  • 0% coal by 2040 (exit in OECD and EU countries by 2030)
  • 1.5°C "global warming potential" of investments by 2050
  • EUR 25 billion in green investments (e.g. green bonds and impact funds) by 2023 
  • EUR 200 million in AXA Transition Bonds
  • No drilling in the Arctic
  • Withdrawal from oil sands and tar sands

To AXA’s climate report

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