Responsible investment

Climate Alignment Principles: How to invest in line with a +1.5˚C goal

Executive summary

  • As efforts to deliver on the Paris Agreement galvanise, investors are beginning to switch from simple commitments to tangible actions. We are increasingly asked by clients: “How can we invest in line with the 1.5°C goal?” This research paper explains our proposed approach, which we call our Climate Alignment Principles
  • There have been numerous industry efforts to establish a framework to help investors with this aim. These cover the entire process from investment governance, to policy, target setting, asset allocation and stewardship, as well as reporting and monitoring. The focus of this paper is on investment. We have covered the other sections in prior papers including our 2020 Taskforce for Climate-related Financial Disclosure Report, Climate Scenario Analysis, and Strategic Asset Allocation for a +1.5°C World
  • Investments aligned with a credible pathway to delivering on the Paris Agreement will need to be primarily focused on one of two objectives. These are either opportunities enabling the climate transition via new products and services, or companies which are rapidly decarbonising at a rate akin to what climate science requires to keep global warming to +1.5°C versus pre-industrial times
  • At AXA Investment Managers, we propose to start from a set of principles which guide our decision-making and frame the selection of tools and key performance indicators to achieve portfolio alignment. We believe that by following these principles we can effectively navigate the evolving landscape and constructively tackle the challenge of aligning our strategies with the Paris Agreement

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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.
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Design & Production: Internal Design Agency (IDA) | 18-UK-010692- 2020 | Photo Credit: Getty Images