Ulrike Decoene de Axa Group en Guardianes de la Biodiversidad

I hope you still have energy after that excellent meal, thanks to Fase Colda. I want to thank you first for the invitation to be part of this very interesting event, which has really impacted me, and more generally thank everyone here in Cali for the fantastic welcome from these 12,000 people who have come for the COP on biodiversity. We are here from AXA with a delegation of about 10-12 people, and everyone is absolutely delighted. Today I'm going to share a bit about how AXA Group is trying to develop a strategy that has a positive impact on all these topics we've been discussing. After everything I heard this morning – really interesting presentations – I have no doubt that we all agree in this room that our sector has a fundamental role. First, in raising awareness of the challenges posed by climate change and biodiversity loss. The consequences of climate change are already here; no one can talk about a challenge for 2050. We see them right before our eyes, and insurers are very aware because we are counting the costs and how difficult it is becoming to insure our clients and companies against the increasing frequency and severity of catastrophic events. I think the role we are all playing in our sector, in our different countries, of raising awareness and dialoguing with public authorities on how to prepare and adapt our economies and societies to this challenge, we can also apply to the closely linked but still somewhat shadowed issue of biodiversity risks. This morning I read in the press review a statistic that left me quite depressed: all countries are now preparing for COP29 and looking at their emission reduction plans, which are based on reducing emissions through a less carbon-intensive economic model but also thanks to nature – the number one carbon sink. Well, German forests no longer capture carbon; they now produce CO2 due to drought, destruction, and loss of resilience. This means a country projecting its trajectory can no longer count on that carbon sink. I start with this figure – I swear I won't give more sad and depressing numbers – but I think this should alert us, and our sector can play this role. I'll now talk more about AXA. We have been working on ESG for many years, managing our own operations and client risk, but the strategic understanding of what climate change meant and the impact we could have came at a key moment: COP21 in Paris in 2015, when our then-CEO Henri de Castries told international visitors that a world with temperatures above 4°C would no longer be insurable. That really raised awareness across AXA, and we started working on three pillars that have remained the same since then. First, what can we do as a company – exemplarity. We are not a highly carbon-emitting sector, but in what we can control we must be exemplary. On the nexus between climate change and biodiversity, we can do a lot by raising awareness. At AXA we publish an annual Future Risk Report, surveying over 3,000 experts – mostly risk managers from companies we work with – and public opinion across all regions, over 20,000 people. Climate change has been the number one risk for both experts and the public for five years. Interestingly, biodiversity loss risk is quite absent from public consciousness – it ranks 10th or 12th – while for experts it is already in the top five. Experts in the Americas put biodiversity loss at number five this year, and globally it's number six, so awareness is growing. We also commit to helping science better understand how ecosystems are functioning under incredible pressure from climate change. We do this through our AXA Research Fund, which has been funding research projects on this topic for years, and through organizations like the Ocean Risk and Resilience Action Alliance (ORRAA), which is here in Cali – I invite you to visit it in the green zone. ORRAA brings together insurers and banks to work on oceans and their resilience to climate change. With them we developed the COAST Risk Index to quantify how nature-based solutions like mangroves and coral reefs help reduce insurance losses. All these projects involve experimenting with our data and publishing lessons learned for public actors to implement prevention measures, which will be so important. The third pillar, quite recent but very important, is ensuring our employees share this knowledge and understanding so it becomes a collective effort within the company. We now aim to train 99,000 employees – almost 100% – on adaptation. In the previous strategic plan we trained all employees on the scientific fundamentals of climate change and its impacts on the insurance world. These three pillars contribute to greater understanding by society, our clients, and public authorities. The second pillar, which may surprise you because our sector has been working on it for a long time, is sustainability in our investments. AXA has a decarbonization plan for its investment portfolios by 2050, aligned with a 1.5°C trajectory, with targets every five years. We exceeded our 2025 targets, and by 2030 we aim for a 50% reduction in emissions from our investment portfolio. I should note that this covers the part of the portfolio we can calculate, using the industry standard. Green investments are very important: we had a target of €30 billion between 2015 and 2023, which was achieved, and now we have a target of over €100 billion to channel €5 billion into the transition economy to drive that transition. On biodiversity, we have been working since 2015, starting with impact funds – we have three impact funds where AXA is the largest investor, managed by AXA Investment Managers. From 2021 we wanted to amplify this with a more powerful strategy, committing €1.5 billion in nature investments, mainly forest management, and €500 million for biodiversity restoration projects or nature-based solutions, which also generate high-integrity carbon credits. We have a small company called Climate Seed that brokers these products. This expertise means we have teams capable of managing such strategies. More specifically, we are looking at sectors most impacted by biodiversity loss and land artificialization, like agriculture and food. We created a fund with Unilever, which faces many challenges in agricultural transition, aiming to reach €1 billion invested not only from AXA but also other investors, investing in agricultural companies that implement regenerative models. So here is a summary: it's important to have a long-term decarbonization trajectory but also to innovate in less familiar investment themes and have teams capable of helping us. Now, on the insurance business side, this is more recent in our history. For many years we focused more on investments, but now it's clear that the ecological transition is both a huge challenge and an immense opportunity for our sector. A study by Howden with BCG indicates that of the $20 trillion already committed to financing the economic transition – changing the economic model of several sectors – more than half currently have no insurance solutions. This means we are implementing and accelerating an industrial revolution that will bring new technologies and business models needing insurance solutions. I think our industry's role is to take risks and be able to find solutions at a good pace to de-risk. We don't like insuring certain materials, and we don't want our sector to become the bottleneck of the economic transition. Instead, we want to have that dialogue from the beginning with our clients to understand how their sectors are changing so we can bring the necessary insurance solutions. That's the objective when we say we want €6 billion of the premiums we collect in the next strategic plan to go toward insuring electric vehicles, renewable energies, and also some topics that are more complicated for insurance today and for which we want to find solutions. The second most important thing in this insurance block is adaptation. In Europe, we are seeing many clients and governments looking to our sector, asking how we will work together to solve this. In France we have recurrent floods and drought; Europe is very exposed to climate change impacts. We want to use our expertise – some of you may know AXA Climate, and we also have risk consulting services with AXA XL. The idea is to help our clients understand the changes ahead and enable us to continue insuring them at an accessible price as they face that challenge. Those are the key points on environment and biodiversity. Examples I already mentioned: developing with Howden a solution for companies that cause an environmental accident to restore nature as quickly as possible; parametric insurance for protected areas and the communities that depend on them – millions of fishermen live off coastal zones. I see parametric solutions not only as a way to protect those marine areas but also to ensure the populations dependent on those resources can continue living and working. We also have medium-term commitments to reduce the carbon intensity of our insurance portfolios by 2030. I should say that only Allianz and we have set such objectives with methodologies that are still very nascent. But that's what we want: combine long-term vision with innovation that our teams can bring on very specific topics like those mentioned. In conclusion, we fully share this vision and enthusiasm for our sector to play such an important role. I also want to end with a conviction: all this is achieved by working together. No company can succeed alone in finding solutions because the topic is very complex; we cannot master all methodologies and fields. It is essential to work in coalitions, creating platforms, gradually advancing understanding and awareness, and providing the solutions our clients will increasingly expect. That's all, thank you very much.