A $1 Trillion CEO Has to Choose: Burn the Client or Burn the Carbon

The glass tower in Paris where Axa SA, one of the world’s largest insurers, has its temporary headquarters looks as if a giant feral cat has ripped chunks out of it. In recent months that jagged feeling extends inside, too, as senior executives prepared to claw off an extraordinarily profitable part of the company’s $20 billion business: the oil and gas clients whose ties to the insurer go back decades.

Axa has made a name for itself more recently as a climate leader among financial institutions. It was the first of its peers to divest from coal and restrict the kinds of insurance it would offer to businesses mining and burning the dirtiest fossil fuel. It strives to take the temperature of its more than $1 trillion portfolio of investments, measured in increments of future warming, something few companies of its size and complexity have tried. There’s even an official corporate policy to be un leader du climat — it’s made a public commitment to regularly “ramp up” its ambition and take further steps to “shape the climate transition,” including by further cutting the carbon footprint of its assets.