Sustainable Investment Awards 2021

Re/insurer of the year; TCFD report of the year: Aviva

The sustained pace of Aviva's sustainability agenda has been notable this past year, with highlights from 2020 including a 76% reduction in Aviva's operational carbon emissions since 2010 and £11.7 billion ($16.3 billion) invested in green assets.

Early in 2021, Aviva also led a call for the creation of an International Platform for Climate Finance (IPCF) coalition, with the aim of engaging governments and policymakers to influence the financial system and make sure more money goes towards building a sustainable future in the lead up to COP26 and beyond.

During this period, Aviva also became the first major insurer worldwide to target net-zero carbon by 2040. Aviva’s new goal to be a net-zero company by 2040 outlines a roadmap of action not just in its direct carbon operations, but also in its supply chain, underwriting and investments. 

This climate change plan, which covers its scope 1, 2 and 3 emissions, includes reducing the carbon footprint of investments by 25% by 2025 and of 60% by 2030. This is ahead of the 50% cut required by the Paris Agreement.

The plan also applies to green investments, and, by the end of 2022, Aviva expects to invest a further £10 billion of assets from its auto enrolment default funds and other policyholder funds into low carbon strategies (of which £5 billion has already been announced). By 2025, it will invest £6 billion in green assets.

"Aviva will continue to develop further climate-conscious products and services, which reward customers for environmentally responsible actions and provide some element of adaptation, resilience or additional cover for those customers at risk of extreme weather impacts," commented Aviva.

Acting on coal, by the end of 2021, Aviva will stop underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they sign up to the Science Based Targets initiative (SBTi). By the end of 2022, Aviva will also divest from all companies which make more than 5% of their revenue from coal, unless they have signed up to the SBTi.

Aviva Investors will continue to engage companies to make the transition through its newly announced 'climate engagement escalation programme', starting with 30 systemically important carbon emitters in the oil and gas, metals and mining, and utilities sectors.

The company also announced £100 million will be invested in nature-based solutions by 2030.

Also winning TCFD report of the year, Aviva announced it will be the first insurer to put its Task Force on Climate-related Financial Disclosures (TCFD) report to a vote at its Annual General Meeting (AGM) this year.

Its 2020 Climate-related Financial Disclosure, which includes a short-form report within its Annual Report and Accounts, a long-form report and climate dashboard, is a robust disclosure covering all parts of the business and involving feedback from multiple stakeholders. This sets out how the insurer is incorporating climate-related risks and opportunities into governance, strategy, risk management, metrics and targets and how it is responding to customer expectations and regulatory requirements.

One judge praised the "clearly laid-out implementation strategy and their long-term commitment to the space", while another described the disclosure as "really clear and helpful".

Ever since its involvement in the development of the TCFD framework, Aviva has been committed to ensuring the financial industry adopts the framework, as evidenced by the role Aviva Investors has played in engaging other companies to consider the importance of TCFD reporting.