Our climate ambition
The climate crisis represents the greatest long-term threat to the planet, economies and societies. We must be active, ambitious and impactful in the face of climate change to shape a better future.
That’s why our ambition is to become a net-zero emissions asset manager by 2040.*
While there is clearly a moral imperative to act, we also believe committing to a sustainable transition represents a huge economic and investment opportunity.
"This does not mean all assets in our portfolios today will be aligned with our net-zero objective. Nor does it mean that we will cease to invest in assets that are currently associated with significant emissions. Rather, it means that over time we will aim to evolve our portfolios to align with this long-term goal." - Mark Versey, Chief Executive Officer
*This will cover all asset classes and investment funds that we manage on behalf of Aviva. Third-party clients are invited to express a preference as to whether they would like the Aviva climate commitment to apply to their portfolios. Investors in collective investment funds will be consulted in line with regulatory requirements. We will write to you if any of this applies to your fund.
We are proud to be members of the Net Zero Asset Managers initiative and the Glasgow Financial Alliance for Net Zero (GFANZ) as part of the Race to Zero.
Our climate activities
Climate change is the biggest long-term systemic risk to the global economy as well as the biggest market failure in history.1 We must act because it is in the best interests of our clients as well as the integrity of the market. We must act because we have the power to do so, and it is the right thing for the planet and all life on it. We are supporting Aviva's broader climate goals – below is a summary of examples of where we are supporting the Aviva-led initiatives and also our own initatives.
Net zero
Our ambition is to become a net-zero carbon emissions company by 20402, covering Scope 1, 2 and 33 emissions, and net zero from our own operations and supply chain by 2030.
Cut carbon intensity
Cut carbon intensity of our assets4 by 25% by 2025 and 60% by 2030.
Climate engagement
Engaging with investee companies to drive alignment of their strategies with a net-zero trajectory, including through our Climate Engagement Escalation Programme, targeting the 30 most systemically important carbon emitters.
Leading the climate debate
Engaging with policymakers to support policy efforts to meet emission reduction targets, to encourage capital deployment at scale to finance the transition towards a low-carbon economy and accelerate investments in climate change adaptation.
Green assets
Invest £2.5 billion in low carbon and renewable energy infrastructure buildings by 2025.
Sustainable lending
In 2020, we committed to delivering £1bn of climate transition-focused loans by 2025, accelerating the transition to a low-carbon economy in real estate. In 2022, we exceeded this target.
Investment exclusions
Divest from companies that derive ≥5% of their revenue from thermal coal or ≥10% of their revenue from arctic oil and oil sands unless they have validated science-based targets5 or real assets non-fossil fuel project bonds.
Science-Based Targets
Align to the Science-Based Targets methodology (1.5 degrees) for investments, operations and supply chain.6
References
- The Economics of Climate Change: The Stern Review is a landmark study that was published on 30 October 2006
- 2019 is the baseline year for measuring carbon emissions/intensity. For more information, please visit: Aviva’s climate goals – glossary and definitions – Aviva plc
- Emissions from investments made on behalf of our clients
- Subset of asset classes, Scope 1 and 2 only. Scope 1 covers direct emissions from a company's own operations. Scope 2 covers indirect emissions from electricity consumed. Scope 3 includes all other indirect emissions that occur in a company’s value chain. (Source: Carbon Trust). For further information on Scope 1, 2, and 3 emissions, please refer to: Taking Climate Action – Aviva plc
- ESG Baseline Exclusions Policy Document. These exclusions apply to funds actively managed by Aviva Investors
- This represents an ambition. Aviva Investors has a fixed target for our climate transition strategies to align portfolios to science-based targets. In all other instances, setting science-based targets is one of our key engagement asks of investee companies. For more information, please see page eight of the Climate-related Financial Disclosure 2021 and page five of our Climate Transition Plan
Shaping the climate debate
The Race to Zero is a race we win or lose together. We have a responsibility to be active stewards of our clients’ assets and must also be active stewards of the financial system.
We have a long history in what we call macro stewardship – engagement with regulators and policymakers to change the rules of the game in an effort to correct material market failures and mitigate systemic risks.
As the international community still lacks a comprehensive finance strategy for the Paris Agreement, we have been convening a multi-stakeholder coalition of organisations to call for reform of the international financial architecture that supervises and regulates finance, including the creation of an International Platform for Climate Finance. This new platform will aim to harness the financial system to support the wider economic transition needed for net zero.
See change in action
Climate change is the biggest systemic challenge of our time. Discover how we're approaching climate action and supporting the transition to a low-carbon and climate-resilient world.
Key milestones through a history of climate action
We have been at the forefront of climate action for decades. Our micro-stewardship centres on our investments. We use our shareholder voice to actively engage and support companies in changing corporate behaviours. At a macro level, we have a long history of involvement on climate change policy, engaging with policymakers, global governance bodies and regulators to correct market failures and bring about transformational change.
Championing climate since early 2000s
Aviva Investors was a founding signatory to the UN PRI, CDP and the IIGCC. We included climate change in our voting policy in 2001 and began calling for mandatory corporate climate change disclosure in 2007.
Policy and industry leadership
We joined the Task Force on Climate-Related Financial Disclosures (TCFD) in 2015, calling for it to be mandatory and include sovereign disclosures. In 2022, we worked with the World Bank on its TCFD equivalent for sovereigns and urged finance ministers and central bank governors for greater climate ambition.
Partnering to drive change
We lead a coalition of investors, corporates, think tanks and NGOs, advocating for reform of international finance and the creation of an International Platform for Climate Finance to support the mobilisation of capital to tackle climate change.
Climate Engagement Escalation Programme (CEEP)
Launched in 2021, our CEEP targets the world’s 30 most systemically important carbon emitters across our credit and equity portfolios. This is ‘engagement with teeth’: we will divest unless these companies do more to tackle climate change.
Climate Transition capabilities
Since 2019, we have expanded our range of Climate Transition investment capabilities across asset classes, investing in solutions providers and leveraging a proprietary climate model to assess climate transition risks and opportunities across 159 sub-industries.
Over £5 billion invested in renewables
Since 2015, we have invested over £5 billion in solar, wind, energy centres and energy-from-waste, reaching 1.1 giga-watts of low-carbon and renewable energy generation capacity, enough to power a large city.
£3 million energy cost saving
In 2021, our smart buildings programme, in collaboration with Carbon Intelligence, delivered over £800,000 in savings for our occupiers, bringing savings over the lifetime of the programme to £3 million.
£1 billion in sustainable lending
In 2020, we committed to delivering £1 billion of climate transition-focused loans by 2025, accelerating the transition to a low-carbon economy in real estate. We have delivered just over £1 billion of sustainable lending in the last year, exceeding the target three years early.
1.4 million tonnes of carbon
In 2021, we acquired 6,300 hectares of Scottish moorland. In partnership with Par Equity, over 3,000 hectares of land will be newly planted and 1,800 hectares of peatlands restored. An estimated 1.4 million tonnes of carbon will be sequestered over the project’s lifetime.
Real assets net zero pathway
In our commitment to achieving net zero in real assets, we outline the actions we will take to invest in low-carbon solutions and decarbonise existing assets across our portfolio.
Climate views
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Building better: Opportunities for DC schemes to invest in the climate transition through real assets
22 Mar 2024
By investing in climate-aligned real assets, defined-contribution pension schemes can help propel the transition to a more sustainable future while also benefiting from portfolio diversification and attractive risk-adjusted returns, says Mark Meiklejon.
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The war on bugs: Climate change contributes to growth in the pest-control industry
13 Mar 2024
Pest control has become a growing priority for city residents and authorities all year round, as rising temperatures and other factors boost the populations of many pest species. But in creating adaptation solutions, the sector could also represent a long-term investment opportunity.
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Multi-asset allocation views: What’s behind Japan’s stock-market sugar rush?
8 Mar 2024
Following unsuccessful attempts in the past, the Japanese government’s structural reforms now seem to be bearing fruit. This has contributed to a record high on the Japanese stock-market, but is it sustainable?
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Credit spreads and climate solutions: The outlook for climate-focused bond investors
8 Feb 2024
For the first time in three years, interest rates should no longer be a headwind for credit markets in 2024, but other forms of uncertainty may affect climate-aware bond investors. Our credit experts discuss the key themes they expect to play out over the coming months.
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Common ground: Earning a social licence to operate in real asset investing
18 Jan 2024
Successful real asset investing requires acceptance of asset managers’ practices and procedures from a variety of stakeholders. We explore what this means for managers, their clients and investment outcomes.
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Plus ça change…The outlook for infrastructure debt in 2024
11 Jan 2024
Infrastructure demonstrated characteristic resilience in 2023 in the face of significant macroeconomic headwinds. Darryl Murphy from our infrastructure team explains why he expects current themes to persist in 2024.
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Tech, trees and tailwinds: The outlook for climate transition real assets
9 Jan 2024
In this Q&A, James Tarry and Luke Layfield explore the themes shaping the landscape for real asset investors with a climate transition focus.
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Changing course: Creating a stable investment framework for offshore wind
30 Nov 2023
Better market mechanisms and grid connection arrangements are essential to restore a stable investment environment in the offshore wind sector, as Nick Molho explains.
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The tipping point for climate finance: Making financial flows consistent with the Paris Agreement
29 Nov 2023
Transition plans, including from governments in response to the Global Stocktake, will be crucial to bring about the shift to a low-emissions, climate-resilient world. Markets need clear implementation signals to align capital with the goals of the Paris Agreement. Our in-depth report calls for the creation of a transition-plan ecosystem connecting all levels of the global economy.
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The time to lead: Reforming multilateral development banks through a climate lens
28 Nov 2023
To have a chance of limiting global warming to less than two degrees, the world must unlock huge investments in emerging markets. This is prompting calls for the reform of multilateral development banks, but will this be enough?
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Paying fair: The living wage comes of age
31 Oct 2023
Paying employees a living wage is a growing concern for companies and regulators. As this concept gains traction, it should be viewed as a long-term investment in workers and businesses rather than a cost.
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Gender balance in the workplace: Levelling up
25 Oct 2023
Despite progress on female representation in senior financial roles, the industry is nowhere near parity. We explore how finance can create a level playing field for all genders to thrive.
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Fairness, climate action and nature protection: Our key takeaways from AGM season
18 Oct 2023
Investing to create a more sustainable, stable and prosperous world should be a core part of the purpose of any responsible asset manager. Louise Piffaut reviews our recent engagement activity designed to hold investee companies to account.
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Race, ethnicity and investing: Developing an inclusive culture
13 Oct 2023
Since 2020, we have taken action to improve our own performance on diversity, equity and inclusion and engaged with investee companies on the key issues. On black representation specifically, building an inclusive culture and pipeline of talent are long-term efforts, as Mark Versey explains.
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Integrating net zero in sovereign bond portfolios: Understanding the impacts, risks and opportunities
2 Oct 2023
Investing in climate transition and adaptation plans today adds to governments’ funding needs, but over time should make for stronger, more resilient economies. How should investors approach this to embed net-zero considerations into their sovereign bond portfolios?
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Disability inclusion in the workplace: Taking down the barriers
28 Sep 2023
Disabled employees continue to face a variety of hurdles to cope with in addition to their day job. We look at how employers can help remove those barriers to allow everyone to thrive.
Read more about Aviva's climate goals. Explore a glossary and definitions of terms on Aviva’s climate goals.
The Glasgow Financial Alliance for Net Zero (GFANZ) brings together net zero alliances from across the finance sector as part of the Race to Zero. We are also proud to support Aviva’s leading role in GFANZ through our Group CEO Amanda Blanc, who is part of the GFANZ Principals Group.
Find out more information about the Net Zero Asset Managers initiative (NZAM) and Race to Zero.
Note: ESG and Climate related engagement, goals and exclusions can vary at the investment strategy and portfolio level depending upon country, jurisdiction and individual client needs.