Net zero should be aim for all – Blanc

Aviva has revealed it aims to be the first major insurer to become a Net Zero carbon emissions company by 2040.

It comes as the firm’s CEO said the issue of climate change and the fight to lower emissions should be a priority for all firms.

The pledge will cover Aviva’s scope 1, 2 and 3 emissions, and include shareholder assets and policy holder assets where Aviva has decision-making control.

The underwriter said progress towards this target will be tracked through annual, public reporting.

“Aviva is setting out a pathway to achieve its goal with immediate actions and targets for 2025, 2030 and 2040. It will sign up to the internationally recognised Science Based Targets initiative so its work can be validated,” it said. “Aviva uses active ownership to drive companies to reduce their carbon emissions. Aviva supports the transition to low carbon and will continue to invest in non-fossil fuel project finance bonds.”

On the issue of coal coverage Aviva said it’s action would be immediate. By the end of 2022 it will divest from all companies which make more than 5% of their revenue from coal unless they have signed up to the Science Based Targets initiative.

In addition, by the end of 2021, Aviva will have stopped underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they have signed up to the Science Based Targets initiative.

Aviva will also be the first insurer to put its Taskforce for Climate-related Financial Disclosure (TCFD) to an advisory vote at its Annual General Meeting of Shareholders in May this year.

Amanda Blanc, Aviva Group Chief Executive Officer, said: “Being the UK’s largest insurer brings huge responsibilities. To our people, our customers, our shareholders and to all the communities in which we operate. But we also have a responsibility to ensure that what we do as a business has little, if any, impact on the environment.”

“With a climate disaster looming, those challenges have never been more pressing or threatening than they are today. Which is why we are setting out this plan to become a carbon Net Zero company by 2040.”

She added: “We have always taken our responsibilities to society seriously, but the reality of the threat has mandated that this become a key strategic issue for us as a company, as it should be for all companies. Our ability to perform as a business is entirely dependent upon societies and economies being able to operate effectively and that will become increasingly impossible if climate change, and our role in accelerating it, is left unchecked.

“We believe facing up to this challenge and getting ahead of it is the best thing we can do for all of our stakeholders and we must reduce the risks and seize the opportunities presented by a new kind of economy for everyone.”

Ms Blanc said she do not underestimate the scale of the challenge ahead. “Many pieces of the puzzle are still missing: the data is imperfect. Methodologies are incomplete. There is no consistent global set of standards.

“But the urgency of the climate crisis means we can no longer wait for everything to be neatly laid out before we act. We may not know every step, but the direction is clear and we will do everything in our power to reach our goal.

“Success will depend on new technologies and innovations. It will require new partnerships and ways of working. It will take science, technology, government, industry and society all pulling in the same direction. It will also take Aviva.”

Aviva’s plan to reach Net Zero carbon emissions by 2040 includes:

The main asset classes of its core markets: credit, equities, direct real estate and sovereign debt (for which the methodology is being developed this year); Aviva will be able to expand this further as data and methodologies become available.

Increasing green investments:

  • By the end of 2022, Aviva expects to invest a further £10bn of assets from its auto enrolment default funds and other policyholder funds into low carbon strategies (of which £5bn has already been announced);
  • By 2025, it will invest £6bn in green assets, including £1.5bn of policyholder monies into climate transition funds;
  • By 2025, Aviva Investors will invest £2.5bn in low carbon and renewable energy infrastructure and deliver £1bn of carbon transition loans.
  • Net Zero in Aviva’s operations by 2030, for example 100% renewable electricity for all offices which total 230,231 square metres, and 100% electric/hybrid vehicle new leases for its 1,540-motor fleet by 2025.

On the issue of coal coverage Aviva said it’s action would be immediate. By the end of 2022 it will divest from all companies which make more than 5% of their revenue from coal unless they have signed up to the Science Based Targets initiative.

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