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AXA progresses on green investments but sees “long way ahead”

1st July 2021 - Author: Matt Sheehan

Global insurer AXA has reported that the green share of its investment portfolio has continued to increase, but CEO Thomas Buberl says there is still “a long way ahead” for the industry to align itself with international climate goals.

axa-logoAs part of its climate strategy, AXA is planning to invest €25 billion in green investments by 2023, while decreasing the carbon footprints of its portfolio, in line with the -20% target by 2025 set by AXA’s strategic plan Driving Progress.

The company took stock of its climate progress as part of its 6th Climate Report, which describes AXA’s responsible investment and insurance initiatives in the fight against climate change and measures how far along the group is in meeting the objectives of the Paris Agreement.

Among the various indicators measuring AXA’s activities with regard to climate change, this report highlights the ‘warming potential’ methodology, which measures the impact of the Group’s investments on global warming by 2050.

This year, it stands at 2.7°C, significantly below the market, whose potential is 3.2°C. This indicator is key for AXA, which committed to limiting the warming potential of its investments to 1.5°C by 2050.

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These indicators are part of a fundamental methodological effort by the financial industry to measure its climate impact, anticipate and manage climate-related risks for its business and stakeholders, and determine effective action plans.

“A decisive decade begins in the fight against climate change,” said AXA CEO Buberl. “Our climate report is an essential tool for measuring the effectiveness of our strategy and the distance we still have to go to meet the Paris Agreement targets by 2050. There is still a long way ahead. We must all commit to accelerating the transition to lower carbon and more resilient economies. AXA is determined to play its part.”

We are entering into a decisive decade of action with a multiplication of climate pledges and a strong business and political momentum,” added Alban de Mailly Nesle, AXA Group Chief Risk and Investment Officer. “These goals remain important provided they are supported by credible transition scenarios. As we reflect on the meaning of the various net-zero pledges and carbon emissions reductions from governments and business leaders, one may wonder if they are realistic. For example, considering that the EU has committed to achieve -55% CO2 emissions reduction between 1990 and 2030, but has achieved only about -20% between 1990 and 2020, despite a significant de-industrialization of Eastern Europe in the 1990s, this leaves a lot more to achieve in a lot less time.”

“Yet this is what climate science is telling us to do if we want to avoid catastrophic and irreversible change, and this what climate neutrality commitments are made of,” he continued. “They are ambitious, and they require the full mobilization of all players, because the window for action is closing fast and there is no plan B. It is an industrial revolution that will be demanding and that can no longer be delayed. Every year counts. But it can also become a formidable catalyst for technological innovation, social justice and geopolitical appeasement. Our mindset must evolve faster than climate change, and our response must be in line with the scale of the risks ahead. AXA takes on the challenge.”

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