Responsible investment

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.

Read more: We must not sacrifice the environmental crisis just to resolve an economic one

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.

Read more: Endangered species may be yet another virus victim

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.

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