A major investment manager has pledged to target companies failing to disclose their impacts on biodiversity with nature-related reputational and business risks poised to affect its portfolio.
France-headquartered AXA Investment Managers (AXA IM) published its updated corporate and voting policy, warning non-compliant firms that they face dissenting votes when re-electing the board as well as committees if they do not act sustainably.
“We encourage companies with a material impact and reliance on biodiversity and natural capital more globally to put in place effective mitigation strategies within relevant timelines,” the investment manager said in the document.
“For these companies, insufficient improvements in terms of disclosure of biodiversity-related strategy and risk management may lead to a dissenting vote cast against the management – including by supporting biodiversity-related shareholder resolutions – or the board.”
AXA IM – the investment arm of the global insurance company AXA – manages €842 billion in assets as of the end of Sep. 2023, including 75,000 hectares of forests across France, Finland, Australia, and Ireland, according to its 2023 Climate and Biodiversity Report.
Last year, the investment manager carried out its first ever corporate biodiversity footprint analysis, in an attempt to assess its biodiversity-related impact at a portfolio level.
“In light of the alarming deterioration of our biodiversity system, we believe it is increasingly important to consider how biodiversity loss might impact long-term portfolio sustainability,” AXA IM said in its newly updated voting policy.
Such impacts include business and market factors linked to fluctuations in raw material costs and disruptions to operations and supply chains, reputational and regulatory risks, and potentially lower returns, the investment manager added.
“Voting at annual general meetings is a key component of stewardship with our investee companies, and a right given to the shareholders, as such, we intend to exercise our voting rights in a way that is responsible and prudent, in order to deliver the best economical outcome to our clients.”
AXA was among the 320 early adopters of the Taskforce on Nature-Related Financial Disclosures (TNFD) recommendations, unveiled in mid-January at the annual World Economic Forum in Davos, Switzerland.
As well, AXA Investment Managers is among the signatories to the Nature Action 100 initiative, aimed at pressuring investees for tangible progress on addressing nature-related risks and dependencies.
“All companies in the list have been identified as potentially the most impactful and representative of their respective sectors based on the best current data and knowledge provided by the partner organisations,” Liudmila Strakodonskaya, ESG analyst at AXA Investment Managers, said in a statement.
By Sergio Colombo – sergio@carbon-pulse.com
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