AXA Investment Managers is expanding its palm oil investment strategy to exclude companies involved in major land use controversies or in causing biodiversity loss due to soy, cattle and timber, it said on Wednesday.
The strategy strengthens a policy introduced in 2014 to exclude investment in companies which have failed to achieve “sustainable palm oil” production certificates or faced issues such as illegal logging, the fund business of French insurer AXA said in a statement.
Major fund managers, under pressure from end-investors and regulators, are focusing on more sustainable investment strategies. AXA IM also has policies to exit coal investments and reduce its own carbon emissions.
Marco Morelli, executive chairman of AXA IM, said the company was “committed to fighting deforestation and natural ecosystem conversion, as well as supporting forest restoration to ensure habitat conservation and to limit global warming.”
AXA IM said it would also increase engagement with companies it invests in in areas including palm oil, soy, timber and cattle to encourage them to preserve biodiversity.
It said it would build on its existing direct investments in sustainable forestry.
Exposure to deforestation is a “very material risk” for investors, the United Nations-backed Principles for Responsible Investment has said.
Investors face reputational risks with consumers and environmental organizations and also legal risks arising from expected new laws on climate-related financial disclosure, the UN PRI said last month.
(Reporting by Carolyn Cohn. Editing by Jane Merriman)