AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Financial Inc.
AXA Venture Partners is an international strategic initiative involving multiple companies within the AXA S.A. global family of companies.
AXA Venture Partners
Asset management company registered with the Autorité des Marchés Financiers (AMF) under n° GP16000006
21 avenue Matignon 75008 Paris
AVP approach to Responsible Investment
AVP is progressively incorporating ESG factors with respect to the assets it manages.
AVP believes that being a responsible asset-management company is crucial to its long-term success. We believe that ESG factors can influence not only the management of investment portfolios across sectors, companies and regions, but also a range of interests affecting clients and other stakeholders.
Our investment philosophy is based on the conviction that issues relating to sustainability factors are and will remain a major concern for the coming years. We believe that combining fundamental ‘non-financial factors’ with traditional financial criteria will help us build more stable portfolios that perform better in the long term. The non-financial approach has become a necessity in more ways than one:
1. it is instrumental in removing companies or underlying assets from portfolios when they cause exposure to high levels of ESG risk, which would ultimately affect financial performance;
2. it focuses on companies that have implemented best practices regarding the management of their environmental impacts, governance and social practices, and whose responsible practices leave them better prepared, in our view, to meet the major challenges of the future; and
3. it enables improved performance by means of active dialogue with companies on managing ESG concerns around investments and limiting our clients’ exposure to reputational risk.
Sustainability Risk: Our Approach [Article 3]
With respect to each of the funds it manages, AVP uses an approach to sustainability risks that is derived from the integration of ESG criteria in its investment process and investment monitoring. It has integrated sustainability risks in investment decisions based on its sectorial and normative exclusion policies.
Sectorial Exclusion Policies
Sectorial exclusion policies are one of the pillars of AVP’s approach to sustainability risks and PAI. Exclusions aim to enable AVP to exclude from its contemplated investments the assets exposed to significant sustainability risks or that may have a significant adverse impact on sustainability factors.
Our sectorial exclusion policies are mostly focused on the following ESG factors:
E: climate (coal mining and coal-based energy production; oil sands production and oil sands-related pipelines), biodiversity (palm oil production) or soft commodities (food commodities derivatives);
S: health (tobacco manufacturing) and human rights (controversial weapons manufacturing; UNGC breach);
G: business ethics (breach of United Nations Global Compact).
Methodologies for Exclusion Policies
One of the challenges faced by financial market participants when integrating sustainability risks or PAI in their investment process is the limited availability of relevant data for that purpose: such data is not yet systematically disclosed by issuers or, when disclosed by issuers, may be incomplete or may follow various methodologies. Most of the information used to establish the exclusion lists or determine ESG factors is based on available data, which may not be complete or accurate or may not fully reflect the future ESG performance or risks of the investments.
Principal Adverse Impacts (PAI) – article [4(1)(b)]
Apart from the exclusions aforementioned, AVP currently does not systematically considers the adverse impacts of investment decisions on sustainability factors (i.e., environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters) as part of its due diligence policies, for the following reasons:
– the nature of Venture capital investing (start-ups), and AVP’s investment focus (technology/software) naturally shields AVP from serious sustainability risks (especially environment)
– for certain investments, data availability limits prevent AVP from implementing a normative process
We currently do not anticipate any changes in our investment processes in this respect.
This Remuneration policy is designed to support the AVP’s long-term business strategy and to align the interests of its employees with those of the Company and the shareholders by (i) establishing a clear link between performance and remuneration over the short, medium and long terms; (ii) ensuring that AVP can offer competitive compensation arrangements across the multiple markets in which it operates while avoiding potential conflicts of interest that may lead to undue risk taking for short-term gain; and (iii) ensuring compliance with applicable regulatory requirements.
AVP applies a “pay-for-performance” approach which i) promotes long-term sustainable performance by incorporating risk adjustment mechanisms in variable compensation schemes, ii) recognises employees who bring the greatest value to the firm on the basis of financial results while demonstrating individual leadership and behaviours. The intent of this approach is to attract and retain the best skills and talents, to foster employee engagement and to strengthen AVP’s leadership.
The Remuneration Policy follows four main guiding principles:
Competitiveness and market consistency of the remuneration practices;
Fairness based on individual and collective performance in order to ensure remuneration is reflecting employee’s individual quantitative and qualitative achievements and impact;
Internal equity based on remuneration policies and procedures designed to ensure that employees are paid equitably based on criteria such as role, skills, contribution or impact, and do not discriminate on the basis of gender or other irrelevant factors; and
Achievement of AVP’s overall financial and operational objectives over the short, medium and long terms as well as execution against medium and long-term strategic objectives as a prerequisite to fund any mid-to-long term award.
AVP ensures an appropriate balance between fixed and variable components of remuneration where the fixed component represents a sufficiently high proportion of the total remuneration to avoid employees being overly dependent on the variable components and to allow the operation of a flexible policy on variable pay components.
In this context, the overall remuneration structure is based on the following components which are designed to provide balance and avoid excessive risk taking for short-term financial gain:
A fixed component which comprises base salary and any other fixed allowances. Fixed remuneration primarily reflects the relevant organizational responsibility, professional experience, technical and leadership skills required of the role, criticality or scarcity of skills as well as the individual’s capability to sustainably perform the duties of the role and,
A variable component which comprises an upfront cash element (Short Term Incentive – STI) and may be supplemented by a deferred element recognising the importance of aligning remuneration over long-term value creation. The deferred element or Long-Term Incentives (LTI) is awarded through equity-based instruments or equivalents, such as AXA Performance Shares. The financing of variable remuneration is calculated according to defined performance indicators taking into consideration both financial and non-financial achievements.
All variable remuneration amounts are awarded in accordance with performance and there is no minimum payment guaranteed.
The level and the structure of the executives’ target variable compensation are based on (i) internal fairness with a similar job at the same level in an equivalent perimeter, (ii) market practices reflected by external benchmark from an independent provider, (iii) level of seniority within the organization and if applicable (iv) any regulatory requirements.
Short Term Incentive (“STI”)
For executives, the STI pay-out is determined based on a combination of the achievement of the individual objectives and/or business performance (Operating Entity and/or Group.
Long Term Incentives (“LTI”)
AVP recognizes the importance of aligning remuneration over long-term value creation by awarding AXA LTI in addition to STI. Beneficiaries and individual AXA Performance Shares grants are determined taking into account (i) the criticality of the job within the organization, (ii) the criticality of the individual in the current job and potential for the future, and (iii) the sustainability of the individual contribution.
AXA Performance Shares are designed to align the individuals interests with the overall performance of the Group, and the corresponding Operating Entity as well as with the stock performance over the medium-long term (3-5 years).
AXA Performance Shares are subject to an acquisition period of 3 years and performance conditions.
All AXA Performance Shares initially granted are integrally subject to performance conditions measured over the performance period. These criteria measure the financial and non-financial performance of the AXA Group as well as the beneficiary’s Operating Entity performance, according to pre-determined targets.
The number of AXA shares definitively granted shall be equal to the number of rights to AXA Performance shares initially granted multiplied by the performance rate, which may vary between 0% and 130%.
Integration of sustainability risks
With Corporate Responsibility criteria already incorporated in the performance conditions of the AXA LTI, the Remuneration Policy is consistent with the integration of ‘sustainability risks’ within the meaning of, and as required by Regulation (EU) 2019/2088 of November 27, 2019, as amended. In 2021, the integration of sustainability risks has been enhanced for both short-term and long-term remuneration elements:
The weight of the Group Corporate Responsibility criteria in AXA LTI performance conditions is increased from 10% to 30%. Achievement on specific climate related targets (reduction of (i) operations’ carbon emissions and (ii) carbon footprint of assets) complements the target on AXA’s score on the Dow Jones Sustainability Index (assessing Environmental, Social and Governance dimensions).
Long-term shareholder engagement
AVP’s approach regarding its role as a shareholder, and in particular its voting policy, reflects its conviction that governance bodies and investors have key roles in building long term and responsible businesses. They contribute to markets’ integrity and ensure an efficient allocation of private capital.
The cautious governance of our portfolio companies is key to building sustainable performance. Taking that into account, AVP commits to vote (when applicable) in the best interest of investors in its investment vehicles.
When making investments, AVP always discusses topics that are investor information and financial/ non-financial disclosures, where partners in charge of the investments commit to share information on companies ongoing & evolution of business of portfolio companies.
This comprises in particular the collection of reporting data that allows to assess the compliance of portfolio company’s commitments with financial and non-financial objectives. Partners participate to board meetings when applicable, and when annual general meetings are organized, they represent AVP investors’ interests. As a general rule, AVP always asks for a permanent board seat when investing (this can be rejected given investments’ specifics).
AVP usually tracks the following: (without specific reporting constraints):
- Financial preformance
- Equity structure
- ESG issues when applicable (size & business area)
For any complaint, you can send a letter to the following address: AXA Venture Partners – CUSTOMER COMPLAINT – 10 boulevard Haussmann 75009 Paris or by e-mail to the following address: firstname.lastname@example.org specifying in the subject: CUSTOMER COMPLAINT
If you are not satisfied, you can contact the AMF:
Médiateur de l’AMF
Autorité des marchés financiers
17, place de la Bourse
75 082 Paris cedex 02
In accordance with the Règlement Général sur la Protection des Données (« RGPD ») dated May 25, 2018 and French law n° 78-17 of January 6, 1978 (Loi informatique et liberté), the personal data collected by AXA Venture Partners may be used.
To comply with the legal and regulatory obligations of the management company;
To execute a contract related to its products and services;
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To periodic communication to investors;
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Unless provided by law or regulation, AXA Venture Partners retains personal data for the duration of the contractual relationship and for the applicable limitation period (5 years).