AXA Investment Managers (AXA IM) is now including environment, social and governance (ESG) targets in the remuneration of its senior executives as part of its net zero commitments.
The deferred compensation of around 400 people that will start to be paid in 2024 will be affected.
The French based fund manager said that alongside existing pay criteria, it will use certain ESG metrics according to the employee’s business area and remit in pay decisions.
These include weighted average carbon intensity (WACI) to reach the target of 25% reduction in carbon intensity for corporate portfolio by 2025.
For the ESG part of the deferred compensation, this metric accounts for 75% for AXA IM Core and 37.5% for transversal functions employees in scope.
The sane metrics will be applied to the asset management section. A target for 50% of the real estate portfolio is expected to be aligned to the Carbon Risk Real Estate Monitor trajectories by 2025.
The check list also involves a reduction of the corporate operational CO2 footprint to reach the interim target of 26% lower by 2025.
This metric accounts for 25% of the ESG part of the deferred compensation for all AXA IM Core, AXA IM Alts and transversal functions employees in scope.
This new policy is reflected in the AXA IM for Progress Monitor, a set of criteria that sits alongside the fund house’s financial targets and indicators.
For example, it has eight metrics for net-zero targets around the themes of decarbonisation, engagement, and solutions to consciously channel capital to companies and projects that can help accelerate the transition to net zero.
Progress towards these targets will be reported annually from 2023.
“As we further put sustainability at the heart of everything we do, transparency and regular reporting on our progress and the challenges we may face is crucial,” said Marco Morelli, executive chairman of AXA IM.
He adds, “We are choosing to visibly position our non-financial targets alongside our financial ones and to increasingly onboard our organisation to make our employees a part of our sustainability journey.”
Other firms that have linked executive pay to ESG performance include Apple, Shell, McDonald’s, Pepsico, Unilver, Starbucks and Siemans.
©Markets Media Europe 2023
