COVID-19: Stewardship and the pandemic
Responsible investment in 2020 was meant to be all about starting the Transition Decade to a low-carbon future. The asset management industry would build on the mainstreaming of environmental, social and governance (ESG) considerations and climate change into investment strategies – and AXA IM would seek to lead from the front. The shock of the COVID-19 pandemic may have shaken things up, but it has only served to strengthen those trends.
This virus has forced a reckoning throughout the world, putting stress on economies and livelihoods alike. As we publish our 2020 H1 Stewardship Report, there are signs that we are emerging from the first wave of this unprecedented moment, and we can make some initial observations about where we find ourselves.
A key conclusion we’ve reached is that our thematic ESG convictions have become even more relevant in the pandemic. Our research and engagement around climate change, biodiversity, human capital management and gender inequality, public health and corporate governance have adapted to explore how COVID-19 might change industries and alter ways that we might invest. This has included research on COVID bonds, carbon emissions in the lockdown, and the resilience of ESG leaders against laggards in the market downturn.
Here was an opportunity for real-time testing of corporate sustainability, a chance to call on fellow investors to help deliver a ‘green recovery’ and to examine the development of new financial instruments that could both build resilience to the pandemic and embed sustainable practices into the future.
This research also bolstered our stewardship activities. The COVID-19 crisis has sharpened the importance of active ownership, particularly around certain crucial issues. We doubled down on some of our engagement activities around public health, human capital and shareholder rights. So too, our enhanced voting policy on core themes revealed our industry leadership on resolutions around gender diversity, climate change and board accountability.
As an active long-term fund manager, we had the agility and experience to respond quickly and meaningfully in this crisis, helped in part by the quality of our existing relationships with investee companies.
Despite the lockdown, we engaged more than 180 issuers in the past six months and voted at about 4,300 shareholder meetings. AXA IM’s record of expressing our opinion and recommendations through engagement and voting is revealed over the following pages. We are only at the half way mark of 2020 and we have already seen a startling and generation-defining global crisis. But the pandemic will not press pause on the Transition Decade, and we know that climate change will steadily impart its own dramatic effects.
There is much work to do in the months that follow, on this and a host of other sustainability themes, but as we begin to understand what a post-COVID-19 world might look like, one thing is clear: Active, decisive, informed and responsible investors have never been more important.
Not for Retail distribution: This document is intended exclusively for Professional, Institutional, Qualified or Wholesale Clients / Investors only, as defined by applicable local laws and regulation. Circulation must be restricted accordingly.
This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.
Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales No: 01431068. Registered Office: 7 Newgate Street, London EC1A 7NX.
In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries.