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AXA IM expands palm oil policy to protect ecosystems and fight deforestation

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AXA IM has set clear guidelines to limit investment in companies involved in deforestation and natural ecosystem conversion, including companies operating in the palm oil, soy, timber and cattle industries.

AXA IM will increase engagement with companies operating in those areas to preserve biodiversity, encourage more sustainable practices and support them in their transition. AXA IM will exclude companies involved in highly controversial practices.

The new policy builds on AXA IM Alts’ long-standing focus on sustainable forestry investments.
 
Considering the huge environmental and social impact of deforestation and natural ecosystems conversion, AXA Investment Managers has decided to extend its Palm Oil policy2 with a more comprehensive approach to Deforestation and Ecosystem Protection. Launched in 2014, AXA IM’s Palm Oil policy excluded investment in companies which have failed to achieve ‘sustainable palm oil’ production certificates or faced issues such as unresolved land rights conflicts and illegal logging issues.
 
Through its expanded Ecosystem Protection & Deforestation policy, AXA IM is extending the ban to companies which face significant land use controversies and are responsible for biodiversity loss in relation to soy, cattle and timber. As part of the new policy, AXA IM is also seeking to enhance active engagement activities with companies identified at risk according to the deforestation filters (palm oil, soy, timber, cattle) and encourage them to strengthen efforts to preserve biodiversity and move towards sustainable practices.
 
The work currently done with Iceberg Data Lab and I Care & Consult4 will also provide alternative sources of data on biodiversity pressures and dependencies related to industries / issuers, and will help further advance in our screening and engagement practices.
 
In addition, AXA IM will continue to build on its 30 year experience of direct investments in forestry through its alternative business unit AXA IM Alts, with a clear commitment to sustainable management in forests aligned with its guidelines in countries including France, Ireland and Finland, representing more than 58,000 hectares under management.
 
AXA IM’s commitment covers the ownership, management, wood production and societal use of forests in its portfolio, including:

• The preservation of forests for the future while allowing the production of wood, respecting ecosystems, maintaining biodiversity, protecting soils and water.

• Certifying forest and management practices within two years of acquisition by Forest Stewardship Council (FSC) and/or in countries with lower risk, the Programme for the Endorsement of Forest Certification (PEFC).

• Promoting the use of wood as a material that offers a real capacity to reduce emissions as an alternative to high-emission materials such as concrete or steel.

• Encouraging the regeneration of natural habitat and integration of greater levels of biodiversity into silvicultural practice.
Using parts of our forests for recreation, research and education.
 
• Finally, AXA IM Alts’ Impact Investing team has invested and will keep on looking for investment opportunities in forestry companies and projects globally to conserve natural capital, mitigate climate change and build climate resilience.
 
Marco Morelli, Executive Chairman of AXA IM, says: “Deforestation poses unique economic, environmental, and social challenges, including biodiversity loss, increased greenhouse gas emissions, unsustainable land use and labour issues. Through our investment practices, we have a role to play and are committed to fighting deforestation and natural ecosystem conversion, as well as supporting forest restoration to ensure habitat conservation and to limit global warming. Our new ecosystem protection and deforestation policy aims at encouraging a broader range of companies to adopt sustainable practices and accompany them in their transition.”
 
“With this policy we want to set a transparent and clear framework for the companies we invest in and for our clients. We explicitly present how we approach those issues through engagement and exclusions and how we also make direct investments into restoration and preservation.”
 
Véronique Andrieux, CEO of WWF France, says: “WWF France welcomes AXA IM’s enhanced commitments against deforestation and ecosystem conversion; it demonstrates the crucial role that the finance sector must play in this fight. As the European Commission is preparing regulatory measures to fight deforestation and ecosystem conversion, this policy is a most needed step ahead that sends a strong signal to markets and public policy-makers. It is no longer an option not to integrate ecosystem conversion issues into investment policies and decision-making.”
 

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