AXA Economic Audit

1. Executive Intelligence Summary

1.1. Audit Mandate and Scope

This forensic audit report has been prepared in response to a specific intelligence requirement: to map the economic footprint of AXA Group (Euronext: CS) and determine its “Economic Complicity” regarding the State of Israel, the occupation of the Palestinian territories (OPT), and associated military-industrial systems. The objective is to produce an exhaustive, evidence-based data repository that facilitates a future complicity ranking based on established international legal and ethical frameworks, including the UN Guiding Principles on Business and Human Rights (UNGPs), the OECD Guidelines for Multinational Enterprises, and International Humanitarian Law (IHL).

The scope of this audit encompasses a multi-layered analysis of the Corporation’s financial and operational activities. It scrutinizes the entity’s direct capital allocation strategies, its asset management fiduciary activities, its venture capital footprint in the Israeli technology sector, and its operational reliance on local service providers within the region. The audit methodology distinguishes between Sustained Trade—defined as general economic activity incidental to global commerce—and Strategic Foreign Direct Investment (FDI), which implies a deliberate, long-term commitment to the Israeli market or its security apparatus.

This report aggregates, verifies, and contextualizes financial and operational data to establish a “Chain of Economic Causality.” It does not offer moral judgments, judicial conclusions, or a final score. Instead, it provides the granular data points required for a supply chain auditor or compliance officer to assess risk exposure relative to the “Economic Complicity” scale.

1.2. Summary of Key Findings

The audit reveals a bifurcated economic footprint characterized by a strategic withdrawal from direct settlement financing contrasted with a sustained integration into the global supply chain of military hardware utilized in the region.

• Financial Supply Chain (Banking): The Corporation has executed a material and nearly complete divestment from the Israeli banking sector. Between September 30, 2023, and June 24, 2024, AXA divested over US 130,000) remains, representing a 99.3% reduction in exposure, likely attributable to index-tracking or illiquid legacy positions rather than strategic intent.
• Investment Flows (Defense): While direct ties to Israeli defense contractors (e.g., Elbit Systems) were severed in 2019, the Corporation maintains a robust investment portfolio in non-Israeli multinational defense contractors. As of June 2024, AXA held approximately US$150.43 million in equity and debt instruments of companies such as Boeing, General Dynamics, and Rolls-Royce, whose products are documented in the snippets as being utilized by the Israeli Defense Forces (IDF) in the ongoing conflict in Gaza.
• Strategic FDI (Venture Capital): Through AXA Venture Partners (AVP), the Corporation retains a strategic foothold in the Israeli technology ecosystem. This includes investments in entities like Neura, which utilizes dual-use technologies (IoT/AI) relevant to surveillance and behavioral mapping.
• Operational Presence: The Corporation’s operational footprint is “asset-light,” relying on third-party networks for travel and medical insurance assistance rather than heavy physical infrastructure. However, the reliance on local medical provider networks creates a latent risk of payments flowing to clinics located within illegal settlements in the West Bank.

2. Methodology and Framework of Analysis

2.1. The Economic Complicity Framework

To accurately assess the Corporation’s involvement, this audit employs a four-tiered “Economic Complicity” framework. This framework moves beyond simple binary assessments of “invested” or “divested” to analyze the quality and impact of the economic relationship.

2.2. Data Confidence and Verification

The audit utilizes a “Follow the Money” methodology, tracing capital allocation from AXA’s General Accounts and third-party asset management vehicles into specific Israeli economic sectors and global defense supply chains.

• Data Sources: The analysis relies on forensic review of research snippets provided, including reports from Ekō (formerly SumOfUs), Profundo, the BDS National Committee, and AXA’s own corporate disclosures (Universal Registration Documents, Press Releases).
• Verification Protocols: Claims regarding divestment are cross-referenced against multiple snippets ¹ to verify timelines and magnitudes. Discrepancies in data (e.g., residual share counts) are analyzed to determine forensic materiality.
• Limitations: The audit is limited by the opacity of private equity markets (specifically regarding the full portfolio of AVP funds) and the lack of public disclosure regarding specific insurance underwriting contracts (e.g., marine cargo policies for specific arms shipments).

3. Corporate Structure and Liability Nexus

A precise understanding of the AXA corporate structure is essential for attributing economic activity to the correct legal entity. The economic footprint is not monolithic; it is distributed across various subsidiaries with different fiduciary responsibilities and risk profiles.

3.1. The AXA Entity Map

The Corporation operates as a complex multinational holding company. Determining “complicity” requires identifying which specific node in the network holds the asset or signs the contract.

3.1.1. AXA S.A. (The Parent)

As the ultimate parent company headquartered in France, AXA S.A. sets global strategy, capital allocation policy, and Responsible Investment (RI) guidelines. It is the entity directly subject to the French Loi de Vigilance.

• Audit Relevance: Any policy decision to divest (or not divest) originates here. The Parent is the “controlling mind” for strategic direction regarding Israel.⁴

3.1.2. AXA Investment Managers (AXA IM)

This is the asset management arm, responsible for investing both the Group’s proprietary assets (“General Accounts”) and third-party client assets.

• Audit Relevance: This entity is the recorded holder of shares in Israeli banks and US defense contractors. A crucial distinction must be made between:
  • Proprietary Assets: Money AXA owns. Investment here represents direct corporate will.
  • Client Assets: Money AXA manages for fees. While AXA argues it acts only as a fiduciary, it earns management fees from these assets, creating a profit motive linked to the underlying holdings.⁶

3.1.3. AXA Venture Partners (AVP)

A venture capital fund manager, historically sponsored by AXA but moving toward independence.

• Audit Relevance: AVP is the vehicle for “Strategic FDI.” It holds equity in private Israeli technology companies. Its mandate explicitly includes Israel as a core geography.⁸

3.1.4. AXA Partners

The specialized assistance and travel insurance unit.

• Audit Relevance: This unit manages the operational network of medical providers. It is the entity most likely to have physical service contracts on the ground in Israel and potentially the West Bank.¹⁰

4. Phase I Analysis: The Israeli Banking Sector

The first core intelligence requirement is to investigate holdings in Israeli banks. These institutions have been designated by the UN Human Rights Council and various NGOs as central pillars of the settlement enterprise, providing the essential capital for construction and infrastructure in the Occupied Palestinian Territories.

4.1. The Mechanism of Complicity

The complicity of the Israeli banking sector is structural. The “Big Five” banks—Bank Hapoalim, Bank Leumi, Israel Discount Bank (IDB), Mizrahi Tefahot, and First International Bank of Israel (FIBI)—are deeply integrated into the settlement economy.

• Mortgage Financing: Providing loans to homebuyers in West Bank settlements.
• Infrastructure Lending: Financing the construction of roads, utilities, and public buildings in the OPT.
• Fiscal Sponsorship: Often holding the accounts of settlement municipal councils.
• Audit Implication: An equity investor in these banks provides the capital adequacy required for them to expand their loan books, thereby indirectly financing the physical expansion of settlements.¹²

4.2. Historical Exposure and the Divestment Trajectory

The audit trail reveals a systematic, multi-year reduction in AXA’s exposure to these banks, accelerating significantly in response to the geopolitical events of late 2023 and early 2024.

• 2016 Baseline: AXA held significant equity positions in all five major banks via AXA IM and its then-subsidiary AXA Equitable Holdings.⁶
• 2018-2019 Phase: Partial divestments were recorded. During this period, AXA also fully divested from Elbit Systems, Israel’s largest defense contractor, marking the first major concession to external pressure.⁶
• 2022 Status: Forensic review of shareholdings confirms no reinvestment in Mizrahi Tefahot or FIBI as of December 31, 2022.³
• 2023-2024 Acceleration: The critical window for this audit is Q4 2023 to Q2 2024.
  • Sept 30, 2023: AXA held over 2.5 million shares in Bank Hapoalim, Bank Leumi, and IDB. The market value of these holdings was approximately US$20.4 million.²
  • June 24, 2024: Holdings in Bank Hapoalim and Israel Discount Bank dropped to zero.³
  • Velocity of Exit: The divestment was described by forensic observers as “clear, fast, and intentional.” The timing—occurring amidst the intensification of the Gaza war and heightened BDS campaigning—suggests a risk mitigation strategy rather than a purely financial reallocation.¹³

4.3. The “Residual Shares” Anomaly: Bank Leumi

A granular review of the June 2024 data reveals a discrepancy. While divestment from Hapoalim and IDB was total, a residual holding remained in Bank Leumi.

• Data Point: Refinitiv databases showed AXA held approximately 16,000 shares of Bank Leumi, valued at roughly US$130,000.³
• Forensic Interpretation:
  • Materiality: Relative to the initial position ($20M+) and AXA’s total AUM (€800bn+), a $130k position is immaterial. It represents a 99.3% reduction in exposure.
  • Mechanism: In asset management, complete divestment to exactly zero is often complicated by “tail assets”—small positions held in passive index tracking funds (ETFs) or illiquid accounts that cannot be immediately unwound without tracking error.
  • Audit Finding: While technically a “link,” this residual holding does not evidence “Strategic FDI” or “Sustained Trade” intent. It is likely an operational artifact of the divestment process. However, strictly speaking, the claim of “zero exposure” made by corporate leadership is contradicted by this data point, albeit marginally.¹

4.4. Assessment of Settlement Financing Risk

Based on the divestment data, AXA’s “Direct Complicity” score regarding settlement financing has plummeted. By removing itself from the capital structure of the Israeli banks, AXA has severed the primary mechanism through which it previously supported the settlement enterprise. The audit ranks this area as Historic/Low Risk, representing a successful outcome of external pressure campaigns.

5. Phase II Analysis: The Global Defense Supply Chain

As direct exposure to Israeli financial institutions decreases, the locus of “Economic Complicity” shifts to the global defense industrial base. The audit identifies a significant and sustained flow of capital into non-Israeli multinational defense contractors that supply the IDF. This falls under the category of Indirect Complicity.

5.1. The “Genocide” Supply Chain Argument

Civil society organizations and legal experts (e.g., Al Haq, SOMO) argue that investing in weapons manufacturers during a conflict where plausible genocide has been flagged by the ICJ constitutes a violation of IHL. The distinction between “general defense investment” and “complicity” narrows when the specific weapons systems funded are documented in use against civilian populations.¹²

5.2. Portfolio Decomposition: Key Complicity Nodes

The audit identifies a cluster of 11-14 companies in AXA’s portfolio that form the backbone of the IDF’s aerial and ground warfare capabilities. As of June 30, 2024, AXA’s total exposure to these entities was approximately US$150.43 million, split between equity ($78.87M) and bonds ($71.56M).⁶

The following table details the specific companies, their products, and their relevance to the “Financial Supply Chain” requirement:

5.3. Financial Instruments: Shares vs. Bonds

A critical forensic distinction must be made between holding shares and holding bonds.

• Equity (Shares): Buying shares on the secondary market transfers ownership but does not provide new capital to the company (unless part of a new issuance). The complicity argument here is based on profiting from the company’s activities (dividends/capital gains) and providing share price support.
• Debt (Bonds): Buying corporate bonds is a form of direct lending. If AXA participated in new bond issuances by Boeing or General Dynamics post-October 2023, it would be providing fresh liquid capital directly to these companies’ treasuries during the conflict. The audit notes that $71.56 million of the exposure is in bonds.⁶
  • Intelligence Gap: The research snippets do not specify the vintage (issuance date) of these bonds. Determining whether these are legacy bonds or new subscriptions is a critical “Core Intelligence Requirement” for future ranking.

5.4. ESG Policy Contradictions and the White Phosphorus Loophole

AXA’s Responsible Investment (RI) policy explicitly excludes “Controversial Weapons,” defined as cluster munitions, anti-personnel mines, and biological/chemical weapons. It also mentions “White Phosphorus weapons”.¹⁶

• The Loophole: Many of the listed companies (e.g., General Dynamics, RTX) are massive conglomerates. While they may produce components or munitions that contain white phosphorus, they are not classified purely as “white phosphorus manufacturers” in standard ESG screens if the product has a dual-use (e.g., for smoke screening) or constitutes a negligible revenue fraction.
• Audit Finding: AXA appears to be leveraging strict definitions to maintain compliance with its internal policies while ignoring the broader IHL implications of supplying conventional munitions (JDAMs, 155mm shells) used in alleged war crimes. This creates a “Policy vs. Practice” gap that is central to the complicity assessment.

6. Phase III Analysis: Strategic FDI and Venture Capital

The third core requirement is to investigate “Strategic FDI” and “R&D centers.” This moves the audit from passive financial holdings to active, strategic integration with the Israeli economy. The vehicle for this activity is AXA Venture Partners (AVP).

6.1. The “Silicon Wadi” Strategy

Israel is explicitly listed as one of AVP’s core operating geographies, alongside Europe and North America.⁹ This is not “Sustained Trade” (buying a service); it is “Strategic FDI” (investing equity to capture innovation).

• Objective: To leverage Israel’s world-class ecosystem in fintech, insurtech, big data, and cybersecurity to modernize AXA’s global insurance operations.¹⁷
• Partnerships: AVP has co-invested with prominent Israeli VCs such as the Liberty Israel Venture Fund and Pitango Venture Capital.¹⁸ These partnerships embed AXA into the local business elite.

6.2. Forensic Profile of Key Investments

The audit scrutinizes the portfolio for entities with dual-use potential—technologies developed for civilian use that have military or surveillance applications.

6.2.1. Neura (The IoT/AI Nexus)

• Entity: Neura is an Israeli startup (with US presence) that utilizes machine learning to analyze data from Internet of Things (IoT) devices.¹⁸
• Activity: It creates “digital identity maps” of individuals, predicting behavior and context.
• Complicity Risk: In the context of the occupation, digital surveillance and behavioral prediction are key tools of control. While Neura is marketed as a civilian tool (health, music, smart homes), the underlying technology is highly relevant to the security state.
• Investment Status: AXA Strategic Ventures (AVP’s precursor) led an $11 million Series A round in 2016. This establishes AXA as a significant early backer.¹⁸

6.2.2. Cybersecurity Portfolio

• General Strategy: AVP lists “cyber-security” as a focus vertical.¹⁹ Israel is a global hub for the offensive cyber industry (e.g., NSO Group, Candiru).
• Specific Entities: The snippets mention investments in “Contrast Security” and “Force Manager”.⁸
  • Audit Check: Contrast Security appears to be US-based (Los Altos), reducing the direct Israeli risk. However, the search for cyber deals in Israel exposes AXA to the risk of “innovation washing”—benefiting from a sector incubated by the IDF’s Unit 8200.

6.3. The Spin-Out Implication (Future Outlook)

Intelligence indicates that AVP is preparing for a spin-out/Management Buyout (MBO) in 2025.²⁰

• Impact on Complicity: If AVP becomes an independent entity, AXA’s direct attribution to these Israeli startups diminishes.
• Economic Reality: However, if AXA remains a Limited Partner (LP) in AVP’s funds—a standard practice in spin-outs—it will continue to provide the capital and reap the profits, while laundering the reputational risk. The “Economic Footprint” remains, but the “Brand Footprint” is obscured.

7. Phase IV Analysis: Operational Presence and Infrastructure

The fourth requirement is to check for subsidiaries, innovation labs, or joint ventures. This assesses the “boots on the ground” reality of AXA’s presence.

7.1. Innovation Labs and “AXA Lab”

• Findings: While AXA operates “AXA Labs” in Shanghai and San Francisco to scout technology, there is no definitive evidence in the snippets of a brick-and-mortar “AXA Lab Tel Aviv” with permanent staff comparable to the other hubs.⁶
• Mechanism: Instead, AXA appears to operate via the “Asset-Light” model of AVP—using investment professionals and partnerships to scout innovation rather than building heavy infrastructure. This reduces the risk of physical targeting by protestors but maintains the economic extraction of intellectual property.

7.2. AXA Partners: The Medical Supply Chain

The most tangible operational risk lies within AXA Partners, the unit responsible for travel insurance and medical assistance.

• The Network Model: AXA Partners relies on a global network of “30,000 medical providers” to service policyholders.²² In any given country, they contract with local hospitals, clinics, and ambulance services.
• The Settlement Risk Vector:
  • Scenario: An AXA-insured tourist or business traveler suffers a medical emergency while visiting a location in the West Bank (e.g., a settlement winery or archaeological site).
  • Provider Network: To service this client, AXA must have a reimbursement mechanism with local clinics. If AXA reimburses a clinic located in an illegal settlement (e.g., Ariel, Ma’ale Adumim), it is directly engaging in financial transactions with a settlement entity.
  • TPA Involvement: Insurers often use Third Party Administrators (TPAs) like Femi Premium or Bikurofe in Israel. If these TPAs include settlement clinics in their network (which is standard for Israeli TPAs), AXA is systematically connected to the settlement infrastructure.
• Audit Gap: The snippets confirm the existence of the network and the coverage in Israel ¹⁰, but do not confirm specific contracts with settlement clinics. This is a “High Probability / Low Verification” risk area.

8. Seasonality and Timing of Economic Movements

The fifth requirement focuses on “Seasonality/Timing” to detect recent divestments or acquisitions. The audit identifies a high correlation between geopolitical escalation and economic withdrawal in the banking sector, but a static position in the defense sector.

8.1. The Divestment Curve (Banks)

• Pre-War (Sept 2023): Status quo. AXA holds ~$20M in banks despite years of BDS pressure.
• Conflict Escalation (Oct 2023 – Present): Intense military operations in Gaza; ICJ proceedings; heightened global scrutiny.
• The Pivot (H1 2024): AXA executes a rapid sell-off. By June 2024, the position is effectively closed.²
• Analysis: This seasonality confirms that AXA is sensitive to “Event Risk.” The decision was likely triggered by the legal escalation (ICJ ruling on plausible genocide) which transformed the “reputational risk” of the banks into a “criminal liability risk” under French law.

8.2. The Stasis (Defense)

• Observation: Unlike the banks, there is no evidence of a similar seasonality in the defense portfolio. Holdings in Boeing and General Dynamics appear stable or tied to market indices.
• Analysis: This suggests AXA views the “Banking/Settlement” risk as toxic and manageable (easy to divest), but views the “Defense/Industrial” risk as systemic and harder to exit (due to the sheer size of these companies in global indices and their classification as ‘sovereign security’ assets).

9. Regulatory and Legal Context: The Pressure Cooker

To fully understand the economic footprint, one must understand the regulatory pressure shaping it. AXA is not operating in a vacuum; it is a French entity subject to specific legal constraints.

9.1. Loi de Vigilance (Duty of Vigilance)

Enacted in 2017, this French law requires large companies to identify and prevent risks to human rights and the environment in their entire supply chain (including subsidiaries and suppliers).

• Nexus: If AXA invests in a company (like a bank) that finances illegal settlements, it could be sued in French court for failing its “Duty of Vigilance.”
• Impact: The divestment from Israeli banks is likely a direct compliance maneuver to insulate the parent company from this liability.

9.2. The ICJ and “Plausible Genocide”

The International Court of Justice’s provisional measures (January 2024) and advisory opinion (July 2024) have raised the stakes.

• Nexus: Investing in weapons manufacturers supplying a combatant accused of “plausible genocide” creates a theoretical risk of complicity in war crimes under universal jurisdiction principles.
• CSO Strategy: Groups like Ekō and Al Haq are using this legal framework to pressure AXA, arguing that “Sustained Trade” in defense stocks is no longer legally defensible.¹²

10. Data Sufficiency for Complicity Ranking

The user’s goal is to “rank AXA based on the provided complicity scale.” While this report does not provide the rank, it provides the requisite data.

10.1. Evidence Matrix

10.2. Missing Intelligence (Gap Analysis)

To provide a definitive score in the future, the following intelligence gaps must be closed:

1. Bond Vintage: Are the defense bonds held by AXA pre-war legacy issuances or post-Oct 2023 subscriptions? (Crucial for intent).
2. TPA Audit: Does AXA’s TPA in Israel (e.g., Femi Premium) list settlement clinics as reimbursable providers?
3. Marine Cargo Underwriting: Does AXA XL provide insurance for maritime shipments of arms from the US to Israel? (This is a “hidden” layer of supply chain support).
4. Reinsurance Treaties: Does AXA Re insure Israeli domestic insurers (Harel, Migdal) against war risk?

11. Tables and Structured Data

Table 1: Financial Supply Chain – Banking Divestment Timeline

Tracking the withdrawal of capital from the “Settlement Economy”

*Estimates based on total $20.4M split across 3 banks per ³ graph visuals.

Table 2: Investment Flows – Global Defense Holdings (June 2024)

Mapping the “Genocide Supply Chain” exposure

Table 3: Strategic FDI – The Venture Capital Footprint

Assessing “Innovation Washing” and Dual-Use Risk

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