ClimateWise principles report 2010

1. Aviva has continued to be involved with a number of research pieces over the past year in respect of climate change.
   1. Aviva was represented on the steering group in respect of the ABI Climate Change Research Report published in October 2009 which sought to combine catastrophe models with climate change models to explore the variations in risk based on different temperature scenarios.
   2. We have reviewed and contributed to the Solvency II consultation on the catastrophe modelling papers and are a member of the Willis Risk Network and Aviva is represented at meetings of the network.
   3. Aviva has been represented on a number of the ClimateWise Collaborative projects. One of the research projects is the effect of climate change on morbidity and mortality risks in the Healthcare area of the business. Aviva has been active in this workstream and hosted the most recent meeting in June. This work continues.
2. Research and risk analysis is vital to all areas of Aviva. A few examples of research carried out over the last year are:-
   1. The RAC commissions research and produce an annual report on Driving. The 2009 report shows younger drivers aged between 17-24 years old are emerging as a positive influence in changing long-held driving habits which will help minimise their impact on climate change:
      • Over a third (36%) of the 17-24 age group are very confident they understand the skills required to be a greener driver, compared to a quarter of other motorists. Showing that teaching these skills as part of the modern driving test is paying dividends
      • Younger drivers are more likely to car share, cutting congestion and CO2 emissions. One in five shares a vehicle at least once a week compared to only 4% of other drivers
      • 83% of the 17-24 age group are in favour of increased investment in alternative fuel technologies, recognising that they cannot depend on the internal combustion engine forever, compared to only 68% of all motorists
      • 41% of the 17-24 age group agree they will be more inclined to choose an alternative power source when buying their next vehicle, compared to 26% of all motorists.

   2. In April 2010 Aviva issued a press release advising that it had invested in pioneering technology to measure surface water flooding using a unique flood model that can estimate the damage freak downpours can inflict on homes and businesses in the UK. The research and modelling was identified following the rain storms events in the summer of 2007.

      Residents of Cockermouth experienced similar horrors when record rainfall fell in one day in the Cumbrian town last November. Understanding the impact of intense rain storms has always been a challenge for insurers and the agencies involved in flood-risk management, but now Aviva has come one step closer to solving that problem.

      Working in partnership with hydrologists JBA Consulting, the map has been developed using laser technology that recognises undulations in the ground as small as15cms/6ins. The map has then been “flooded” with a simulation of a 200-year rain storm and a digital model has been created for where the water falls and pools.

      Previously the map focused on coastal and river flooding risk together with historical claims data. The additional data means the model now addresses the ever-growing threat that freak downpours can have on our towns and cities. It is for insurance purposes only and will enable the insurer to more accurately assess each customer's individual circumstances.

      The map is an important addition to our knowledge of flood and its ever increasing risks as the kind of intense rain storms are likely to become more frequent as the climate changes. This investment in flood technology enables us to gain more clarity and insight into who is a risk and who is not, and also that means Aviva can offer the right price for the right risk and actually gives us greater opportunity to write more business because we better understand that risk.

      It is for insurance purposes only and will enable the insurer to more accurately assess each customer's individual circumstances. The map is an important addition to our knowledge of flood and its ever increasing risks as the kind of intense rain storms are likely to become more frequent as the climate changes. This investment in flood technology enables us to gain more clarity and insight into who is a risk and who is not, and also that means Aviva can offer the right price for the right risk and actually gives us greater opportunity to write more business because we better understand that risk.

      The mapping also improves our ability to help customers in the event of a flood claim as we will have a greater knowledge of which areas are likely to be flooded and where, so we can ensure we can direct the right resources to the right places as quickly as possible.

3. The surface water flood mapping is being used to inform the level of pricing for this risk (as mentioned above) for that specific peril. As part of our comprehensive risk management process inherent uncertainty as to the occurrence, amount and timing of insurance liabilities are reviewed. This includes fluctuations in the timing, frequency and severity of claims reinsurance protection and adequate reserves.

   Our largest general insurance risk is claims incurred from catastrophic events, such as flooding and windstorm. Our total potential loss from our most concentrated exposure (northern Europe windstorm) is approximately £335 million (£400 million: 2008) for a one in 10 year annual loss scenario, compared to approximately £620 million (£850 million: 2008) for a one in hundred year annual loss scenario.

   We mitigate this risk by regular reviews by group general insurance committee, the use of reinsurance to help reduce the financial impact of a catastrophe and manage earnings volatility, extensive use of data, financial models and analysis to improve pricing and risk selection and the digital mapping to better manage property flood risk.

4. 1. Our Pay-As-You-Drive™ offering although originally not designed as a green product, the offering intrinsically incentivised customers to travel less frequently, avoid rush hour traffic, review the necessity of very short journeys or travel by alternative modes of transport. The feedback we received from customers confirmed this was the case. However, due to the nature of the UK motor insurance market the product was suspended. It has been simplified and introduced in Europe through Aviva France and Aviva Sigorta in Turkey.
   2. Through the RAC's roadside breakdown service offering we have provided through our roadside assistance and recovery has been a focus of carbon reduction since our purchase of it in 2005. This has been done in a number of ways.
      • We have put more technical staff in call centres to provide on the phone advice to customers which may negate the need for attendance at the roadside, speeding up the customers journey as well as reducing the carbon footprint of the service.
      • The latest logistical software is employed and the vehicles are fitted the most up to date sat navigation ensuring the quickest response times and the most economical journeys.
      • Speed limiters have also been fitted which as a side benefit reduced fuel consumption, but which has not affected response times.
      • The vehicle load has been reviewed and heavy items such as vehicle jacks have been replaced with lighter weight versions.
      • Vehicles are now recovered to local repairers wherever possible, to speed repair and reduce the carbon footprint of the offering.
      • Finally, the greenhouse gas emissions from the RAC premises and vehicles is included in Aviva's group carbon footprint and carbon offsetting process to make the whole RAC process carbon neutral.

5. Aviva Investors – influencing

   1. We also have an important role to play as an investor. Aviva Investors, our global asset management business, has supported the Carbon Disclosure Project (CDP) from its beginnings nearly a decade ago and uses the data as one of the factors in buy, sell and hold decisions. Where we have concerns about a company's quality of response to CDP, we have a basis for entering into informal discussions with that company and if necessary making recommendations for change.

   2. Aviva actively participates in four of the collaborative workstreams within ClimateWise. These are:

      • Understanding the implications of the health impacts of climate change
      • Moving towards a step-change in the role insurers can play in improving the sustainability of the claims process
      • Developing World Statement for Insurance ( joint through UNEPFI)
      • How insurers can better promote loss prevention measures in relation to climate-related perils

Aviva is also a member of the Will Research Network and an Aviva representative regularly attends meetings.

1. Aviva is involved in creating Principles for Sustainable Insurance through the UNEPFI Insurance Working Group which is targeted to be launched at the Rio +20 Summit in 2012.
2. 1. Aviva Investors are a one of the vanguard of investors who has supported the Carbon Disclosure Project since it was launched in 2001. We are also a longstanding responder. In 2009 Aviva was again included in the Carbon Disclosure Leadership Index, showing a third place ranking in the FTSE financial service sector and 8th in the FTSE 350 overall.
   2. Aviva's chairman spoke at CDP launch in October 2009 on climate change and called for further work to be done on something like a Carbon Mitigation Project.
   3. Aviva has been involved in the Copenhagen process both in terms members of the climate change, asset management and insurance working groups of the UNEP FI.
   4. Aviva took part in the Government consultations on the CRC EES and the Voluntary GHG Emissions Reporting for Companies Guidance. As part of the launch of the guidance, the UK Secretary of State for the Environment, Hillary Benn visited Aviva to talk about carbon measurement and reporting, we also provided him with a demonstration of our telepresence technology which we have employed to reduce financial and environmental costs of air travel.
   5. Aviva has been represented at the two United Nations Global Compact Caring for Climate conferences in 2008 and again in April 2010.
3. Part of Aviva's climate change strategy is to seek to work with other like-minded companies, associations and policymakers to discuss and construct frameworks, mechanisms and solutions to ensure fair, robust and complete processes are taken forward.
   1. We showed our support for a positive outcome of the COP 15 by being signatories to a number of statements:
      • The Geneva Association Kyoto Statement - which highlights the unique perspective, and pivotal role insurers have between policymakers and customers on the issue of climate change
      • The UNEPFI Investor Statement on a Global Agreement on Climate Change (signed via IIGCC) – which highlight the point that clear, credible long-term policies are critical for investors to integrate climate change considerations into the decision making processes and to support investment flows into low carbon economies and measures for adaptation.
      • The ClimateWise Statement for Copenhagen – advises that the insurers knowledge around risk and climate and catastrophe modelling will help in tackling climate change, but policymakers need to play their part to ensure that insurance can still be a viable solution to the challenges
      • The Corporate Leaders Group Copenhagen Communiqué – argues that a robust, equitable deal between policymakers at an international level will "unlock the potential of business to do what it does best: to invest profitably, to innovate, and make affordable low carbon products and services to billions of consumers around the world."
   2. In November 2009 Aviva and Aviva Investors signed the Aldersgate Group open letter to Peter Mandelson calling for mandatory reporting for companies to be brought forward, ahead of the review at the end of 2010.
   3. Aviva has been setting group wide carbon emission reduction targets since 2006. These are set on an annual basis and seeking a 5% reduction on an absolute basis. We missed the target in the first year, but in the subsequent two years we have met the target. In the Annual Report & Accounts this year we announced that we have set a long-term carbon reduction target to help focus our businesses' environmental programme further. By 2020 we aim to reduce our carbon emission by 30% from our 2006 baseline. The target chosen is in line with European Commission desire to reduce emissions by 30% by 2020.
4. Aviva actively involves itself in public policy making some examples of this are as follows:
   1. Last year's work on Community Flood planning has been discussed with, and adopted by the UK Cabinet Office as a good practice case study for community partnership.
   2. Aviva's UK claim's director spoke at the fringe meetings of both the Conservative and Labour party conferences in Autumn 2009. He spoke on the issue of flooding form an insurer's point of view and the Government's responses required from insurers.
   3. Another Aviva representative regularly attends the All Party Parliamentary Group on flooding. And Aviva is the only Insurance Group in the UK to be represented on the CBI Climate Change Board and Climate Change working group.
   4. All of this work continues to build on the flood resistant/ resilient home project and the work with the Royal Institute of British Architects mentioned in last year's response.
   5. As part of our press release on surface water flood mapping, Aviva called local authorities and Government to continue to invest in flood defences and better drainage systems and for homeowners and businesses to consider what they can do to help protect their properties from damage.

   6. A temporary office was set up in Cockermouth with household and commercial claims handlers. This served as a base for customers to visit. It acted as a hub for Aviva's loss adjusters and suppliers until local “command centres” were set up.

      The mobile IT which has been developed for such incidents allowing us to integrate with the local community, provide the best possible service to the customers in their time of need and make immediate emergency payments if required. On the television the Saturday after the floods: “this is the day the insurance companies will arrive but one company arrived yesterday”, this was Aviva.

5. Following our work with community flood planning in Boroughbridge in the UK and the floodplanuk.org website last year, we have rolled out the project to our European business. We have started to work with the Red Cross in Poland on running a similar community flood plan project. All the contacts were in place, but unfortunately the town suffered a flood event before we could complete the project. We will be doing further work with the town soon.

Our work continues with the Environment Agency and National Flood Forum.

1. Aviva seeks to inform customers around climate change risks, mitigation and adaptation measures and how they can be more environmentally responsible.

   1. For example, in September 2009 Aviva Risk Management Solutions (ARMS) issues a press release highlight the fact that fines for environmental damage have doubled in the last five years and businesses that do not comply with the regulations are facing increasingly severe penalties.

      The implementation of the EU Environmental Liability Directive (ELD), came into effect across the UK from March to June, and requires that EU member states prevent and remedy environmental damage.

      ARMS identified that with the new legislation and an increase in the cost of landfill tax, businesses are cutting more corners when it comes to waste disposal, one of the most common areas where businesses are penalised.

      These include breaches in packaging regulation, incorrect disposal of trade effluent or liquid waste, leakage of oil from tanks or spillages – a common cause of water pollution. Under the Oil Storage Regulations stiff penalties will be imposed for not complying.

      Emissions are another risk that businesses need to consider. Most businesses are permitted to produce a certain level of gas and vapour, but those that emit over the stipulated amount must have some sort of abatement control in place. Businesses can implement measures to reduce CO2 emissions from cars through car-sharing schemes, increased use of public transport or video conferencing technology for example.

      ARMS advise that having identified all the environmental hazards associated with a process or activity, it is important to identify the risks associated with these. To evaluate the risks, the probability and consequences of hazard control mechanisms failing should be considered.

      Businesses should carry out a review in adequate detail to monitor volumes of waste, effluent or CO2. This should be conducted over a sufficient period to ensure that any day-to-day fluctuations are not given undue weight.

      When the risks have been assessed, they must be controlled. This can be done by implementing physical safeguards, for example bunds, barriers or control systems, which may be dependent on information given in site rules. Controls may also require training or supervision and any limits set by legislation must be incorporated into these measures.

      A strong overlap exists between environmental and health and safety hazards control so it may be possible to use information obtained from a health and safety risk assessment as part of the environmental review. Work should always be cross referenced.

      As well as highlighting the issues for businesses ARMS provides a range of environmental training services including a one-day awareness course, NEBOSH Environmental Diploma and tailored training at a customer's premises and provide information through a series of Hardfacts guides on environmental protection are available from aviva.co.uk/risksolutions.

   2. In July 2009 Aviva Risk Management Solutions (ARMS) issued a press release highlighting the fact that hotter weather could lead to heavy downpours and warning businesses should be prepared for flash flooding.

      Aviva just signed up two new flood management suppliers to its preferred supplier network, which delivered significant savings to customers in 2008 through negotiated discounts.

      It advised companies that it is always wise to prepare for the worst rather than wait until it is too late, particularly as the cost of the damage caused could be even more devastating to businesses in the current economic climate.

      ARMS recommended some actions that companies could take such as checking the area the business is based for prior flooding history is key, as well as proximity to rivers, streams and other water channels or surface water drainage systems. ARMS have a comprehensive range of services available to customers at discounted rates to protect not only against flooding, but the more common issues we identify from the thousands of surveys carried out each year. These include environmental services, fire protection products, electrical inspections, building valuations, security products and services, and workplace and employee safety.

      Aviva re-launched its prestige property owner insurance offering building in the additional service offerings of an energy audit carried out by Bureau Veritas, advice on property improvements, energy supply, energy efficiency technologies followed by a follow up audit and option to purchase voluntary carbon credits to account for the remaining emissions.

   3. The RAC route planner is available through the RAC website to the public. It has additional features built into it such as a calculation or the cost of fuel used dependent on engine size and route and also provides a carbon footprint for the journey.

   4. A recent study by the British Insurance Brokers' Association (BIBA) found that of the 150,000 misfuelling cases per year, 95% are caused by drivers putting petrol into their diesel vehicles due to the wider diesel filler neck and narrower unleaded nozzle.

      Every three-and-a-half minutes a motorist misfuels, generating approximately 7.5 million litres of contaminated fuel annually and costing drivers anything from £300 to over £5,000 for individual repairs. The disposal of this waste fuel, coupled with CO2 emissions generated by towing misfuelled vehicles, also has a devastating effect on the environment.

      FuelSure is the brainchild of inventor, engineer and RAC patrol Phil Cartwright, and is an innovative product that prevents the insertion of the smaller diameter petrol pump nozzle and removes the need to screw and unscrew the existing fuel cap and is the only product that comes complete with a range of filler neck adaptors in the pack, fits over 80% of cars and light commercial vehicles on UK roads, and can easily be fitted by anyone in a matter of seconds.

      It has the potential to help the 11.4 million diesel drivers in the UK. RAC fully supports this device and we are currently in the process of rolling it out to all of our roadside patrols and recovery specialists to make available to our members.

      FuelSure costs £29.95 and is available from RAC Patrols and recovery specialists, as well as selected Halfords stores.

2. Aviva is constantly reviewing the market and considering new products and services that will encourage, reward or provide no additional financial burden to customers who wish to reduce their own environmental impact. Examples of this are:
   1. UK continues to provide cover for property-mounted windturbines and solar panels at no additional premium cost to domestic building insurance.
   2. Our Dutch subsidiary, Delta Lloyd launched its green car insurance 2007. This initiative provides for the offsetting of the harmful CO2 emissions from cars. For each car insurance policy it sells, Delta Lloyd plants seven trees in sustainable forests each year throughout the term of the policy. In addition, the premium is invested in a sustainable manner. The Delta Lloyd green car insurance has been awarded the HIER logo, which signifies that the insurance policy is climate neutral.
   3. Delta Lloyd along with Aviva Canada provides discounted insurance for hybrid vehicles, and a number of Aviva's general insurance businesses, such as Aviva France provide reduced premiums for limited mileage insurance policies.
   4. Aviva France has launched a suite of "green" general insurance and financial products over the past two years. The latest being the launch of a "green car loan" in March 2010, vehicle provides preferential rates for more environmentally friendly vehicles. The car loan offer has been promoted via email and press coverage and although it is early days, customer enquiries show a good response. Another offer is a 10% reduction on car insurance for customers who have an annual subscription to public transport.
   5. Although originally not designed as a "green" product, the Pay-As-You-Drive™ offering intrinsically incentivised customers to travel less frequently, avoid rush hour traffic, review the necessity of very short journeys or travel by alternative modes of transport. The feedback we received from customers confirmed this was the case. However, due to the nature of the UK motor insurance market the product was suspended. It has been simplified and introduced in Europe through Aviva France and Aviva Sigorta in Turkey.
   6. 75% of Aviva products in the UK are sold via intermediaries. Due to FSA regulations we have to provide a good deal of standard information with each product, at every renewal or policy change. We have worked with our intermediaries to provide product information, policy schedules etc. in an electronic format so that these can be communicated to the policyholder which reduces the overall amount of paper generated and the carbon footprint of delivery through traditional methods.
   7. Aviva Canada's "Save Waste Eliminate Paper" programme is supporting efforts to eliminate printed policy documents for brokers, saving paper, ink, energy and time costs. So far 246 out of 1,855 brokers have signed up to this programme.
3. Following on from Aviva's work on flood resistance and resilience and more sustainable claims reinstatement mentioned in last year's ClimateWise response, we have widened the scope to look at other innovative ways of claims fulfilment.
   1. In the property area we began a pilot in summer 2009 looking at repair versus replace in respect of accidental damage to sanitary ware. Objectives were to minimise wastage, improve claims lifecycle and improve cost. Aviva are looking to roll this out due to a successful pilot nationally with an approved supplier network throughout 2010. The Supplier will be able to give us on a job-by-job basis what a job has saved from going to landfill (weight) and CO2 savings from doing repair over replacement.

   2. In 2009 we began working with one of our suppliers in the vehicle repair area Apollo Accident Repair Centres to seek innovative solutions to contain costs, reduce waste and energy consumption and to support jobs in a difficult economic climate. Earthshine consultancy (a not for profit organisation) reviewed the benefits of the change in process.

      It identified that there was a 34% reduction in operational carbon footprint, mainly due to the more efficient and localised drying technology. Significant savings are also made with embedded carbon. Energy costs have gone down from £16.50 to £10.89 per repair, amounting to savings in the region of £74,000 a year. By throwing fewer parts away, 42% waste is avoided in the first place. Of the new levels of waste arising, Y% for recycling diverted from landfill. It currently costs £1.50p for each part to be taken away.

      With the reduction of panels and bumpers thrown away this multiplies up to a total annual saving in the region of £77,000 for waste management costs. On average the new approach saves 3.9 parts on each repair job, this scales up to a massive 51,351 parts saved each year, with significant cost savings experienced. Also, as a direct result of the new way of working, 30 jobs have been saved.

      This represents 13% of the total workforce. Apart from the direct benefit to the employees concerned, this also has a significant benefit to the local economy, maintaining spending power and avoiding the social cost of redundancies. For the entire workforce, skills have been enhanced "to an all time high" and job satisfaction increased, as the emphasis has shifted to skilled repairs rather than simply replacing panels.

      A similar repair over replace model to the Apollo one was adopted by Aviva's accident repair centre network subsidiary, Solus. This business is made up of 20 locations and along with Apollo accounts for one third of all Aviva UK customers' repairable vehicles that have been involved in an accident.

   3. On a more general basis, early work has commenced on maximising sustainability around waste disposal during the re-instatement process. Objectives to review the potential of utilising a supply chain where waste can be sorted into salvageable material for re-use and where waste is left it is disposed of in environmentally friendly manner.
   4. In Canada, Aviva's Premiere Auto Network became the first National Insurance Direct Repair programme to have all of their network repairers waterborne compliant. The new waterborne products will reduce volatile organic compounds (VOCs) by 40% by 2034. VOCs release fine particulates and ozone into the atmosphere. By working with water rather than solvent-based products, the reduction will lower the health risk for the paint sprayers and other repair shop technicians from contracting lung cancer and heart disease. Other procurement initiatives include providing alternative recycled-part solutions and paying for the disposal of hazardous waste.
   5. For our commercial property products we have added an optional "green premium" which can be taken out to allow a "green" reinstatement of the property following a weather event such as a flood. Some measures to make properties more flood resilient and resistant are equitable in price to the normal cost of reinstatement. However there are measures which will reduce the damage caused and length of time the policyholder has to be out of the property in any subsequent flood event.
   6. In 2009 Aviva France included an additional feature to its green domestic insurance property offering which commits to rebuilding properties total destroyed with sustainable materials and onsite micro- renewable energy generation.
4. The majority of Aviva General Insurance business is in Canada and Northern Europe; as such we do not have the opportunity of providing general micro-insurance products in developing countries. Here are examples of the work that we have been doing in developing countries:
   1. Eagle Insurance, our Sri Lankan joint venture subsidiary is supporting sustainable rural development by donating solar panels to 15 families in the village of Ihala Hewessa in June 2009. Aviva employees also offered scholarships to students, while the company is donating funds for the development of a village library.

   2. In December 2009 Aviva Spain was involved in the creation of the Orbayu Foundation for the development of the most underprivileged people in Latin America. It is a joint initiative of Aviva, ESIC and the missionaries of the congregation of the Sacred Heart of Jesus. The three institutions are sharing their know-how and experience to look for, manage and offer microloans to those who are excluded from traditional financial circuits.

      The Orbayu Foundation, the board of which includes representatives from Aviva, the leading supplier of life and pensions products in Europe, ESIC and the missionaries of the congregation of the Sacred Heart of Jesus (SHJ), aims to encourage economic and social development in some of the poorest areas of South America through granting microloans.

      Experience has proven that donation is key, but we also need talent and knowledge to implement the initiatives created for the economic and social improvement of the underprivileged.

      The Microloans are granted to poor borrowers who are unable to access the loans awarded by traditional banks. The loans are given:

      • Without any financial guarantees.
      • With much more favourable interest rates than those offered by local lenders.
      • With short-term agreed repayment instalments.
      • Linked to a viable business project.

      The average delinquency rate of a traditional bank is 3.2%; the rate for microloans is under 2%.

      These three institutions, which traditionally operate alone, have come together to look for, manage and offer microloans to those who are excluded from traditional financial circuits.

      Orbayu offers the possibility to those interested (Aviva employees, ESIC pupils, the general public) to go online and learn about the small business projects which are looking for financing, and to help by investing in those which seem most attractive. They can also check the financing status of their chosen project at any time, its return and the income from the project. The current locations of the Orbayu Foundation projects are based in Quito and Bahía de Caraquez (Ecuador).

   3. In May 2010, Jean-Pierre Menanteau, Aviva France's CEO, and around 100 French employees listening to Chief Raoni defend the cause of the Amazonian Indians with conviction when he visited Aviva France's Head Office.

      For more than 20 years, Chief Raoni has been the spokesman for indigenous peoples caught up by modernity. Speaking in Portuguese, Chief Raoni voiced his concerns about the future of the biggest forest on Earth, his anger at the behaviour of some people and his gratitude to all those supporting his cause.

      Jean-Pierre Menanteau presented a cheque, on behalf of Aviva France, to the Rainforest Foundation which fights for the preservation of the Amazonian rainforest and the survival of the peoples living in the forest. This charity carries out its work in a similar way to Aviva France's Aviva Foundation. Each employee then had his copy of Chief Raoni's autobiography personally signed.

   4. Our Indian rural micro life insurance policy offering, mentioned in previous ClimateWise response continue to go from strength to strength.

1. Aviva Investors has supported the Carbon Disclosure Project (CDP) from its beginnings nearly a decade ago and uses the data as one of the factors in buy, sell and hold decisions. Where we have concerns about a company's quality of response to CDP, we have a basis for entering into informal discussions with that company and if necessary making recommendations for change.
2. For the first time this year, encouraged by Aviva Investors, Aviva took the step of putting its CR report within the Annual Report and Accounts to a separate shareholder vote at its 2010 AGM. An overwhelming majority of votes cast – more than 99.9% – were in favour of the CR report. As the first UK company and first financial services company in the world to do this, Aviva believes that its investors should have a voice on key environment and social issues. By doing so, it makes the case that CR is an integral part of business strategy which demands equal attention to financial matters. Aviva is now encouraging other companies to follow suit to raise the profile and status of their CR programmes.
3. 1. As mentioned in last year's response, through its joint venture the Igloo Regeneration Fund, Aviva Investors is also putting sustainability at the heart of award-winning mixed use development projects designed to provide communities with high quality, low carbon environments.
   2. In 2009 Aviva Investors Real Estate Area introduced a Sustainability Charter. As part of its development an Environmental Management System has been put in place and work with site managers is ongoing to set targets and make reductions. Aviva's 2009 Annual Report & Accounts advises that the carbon footprint of the property investment portfolio will be report from 2010 going forward.
   3. We are investigating the possibility of measuring the carbon footprint and intensity of investment funds and any possible linkage to the financial performance of a particular fund.
4. In November 2009 Aviva Investors challenged global stock exchanges to take action on corporate responsibility. In a speech at a major UN Conference Paul Abberley CEO, Aviva Investors London called on stock exchanges around the globe to more actively promote corporate responsibility and transparency among the companies that are listed on exchanges. Aviva Investors was seeking to galvanise concrete commitments from international stock exchanges and their listing authorities to work towards codifying how they could promote more responsible business. At the UN conference, Paul Abberley also announced a number of further responsible investor-focused initiatives that are designed to educate stock exchanges and the investment community on enacting sustainable business practices. These are:
   • Analysis from Goldman Sachs Global Investment Research highlighting why sustainability data forms a material part of an overall investment decision, what key metrics they look for, and the nature of the problems they have in sourcing this data
   • Analysis from CA Cheuvreux examining the business case for stock exchanges to update their listing codes, as well as how well prepared specific exchanges are for this agenda
   • In collaboration with Maplecroft, a Sustainability Performance Benchmark based on the United Nations Global Compact, which following consultation will be available for use by mainstream analysts and civil society researchers
   • In collaboration with EIRIS, a voting and engagement service that provides investors with recommendations on how to promote enhanced corporate responsibility via their voting.
5. 1. Following the FairPensions survey 2009 of Aviva's Employee Pension scheme to assess the current position, bench mark best practice and provide members with greater transparency in respect of the Principles of Investment Strategy.
   2. In 2008 Aviva Investors announced an initiative to set a new threshold for global best practice by including UN Principles for Responsible Investment (UN PRI) in its contracts. We advised that we would include a clause on responsible investment in all of the contractual Investment Management Agreements proposed to clients. Clients are now able to see the PRI assessment of our performance and they will be able to hold us to account for delivery on our responsible investment commitments.

1. We are members of Chartered Institute of Purchasing and Supply Chain Financial Services CSR subgroup which looks to bring consistency to the way we approach suppliers to financial services sector through a common CR questionnaire and good practice case studies. Additionally we use a CR Code of Conduct with all our suppliers, which has been rolled out on a worldwide basis. For the most significant suppliers we include environmental clauses in contracts. Some example of this are in respect of IT waste recycling and disposal, data centre outsourcing, work wear etc.

   As well as focusing on data provision in respect of carbon emissions detailed in the Annual report and Accounts, as part of the Accounting for sustainability framework we do comment on % of renewable electricity - 64% (2008:65%), % of paper with recycled content - 29%, 69% of waste diverted from landfill.

   Accounting for Sustainability framework data /reports/cr2009/index1af5.html/

2. 1. In 2009 Friends of the Earth named Aviva France as being among the foremost insurers in France for its action against climate change. Our “green” offers include a rewards policy for employees who purchase “green” cars, a 10% reduction on car insurance for customers who have an annual subscription to public transport, and a reimbursement of 50% of employees' season tickets for public transport.
   2. Aviva, through its UK businesses will be a participant in the new UK Government regulation, the Carbon Reduction Commitment Energy Efficiency Scheme. In August 2009 we became the first insurance company to gain accreditation to the Carbon Trust Standard. This provides further independent assurance that we have reduced our emissions, and along with installation of Automated Meter Readers, it means that our operations have met the early action metrics of the CRC EES.
   3. Aviva's carbon footprinting boundaries - /reports/cr2009/index6abb.html/
   4. Aviva's Environmental data - /reports/cr2009/index9aed.html/
3. 1. We use the Credit360 online data gathering and reporting system for all our CR data; both quantitative and qualitative. We currently have 116 data collectors from each Aviva business worldwide. Environmental data is collected on a quarterly and half yearly basis and is automatically aggregated up form a business level to a regional and finally to provide a Group picture.
   2. Our Climate Change strategy is based on these challenges that climate change presents us with and is addressed by three areas, or spheres of focus. Firstly, our sphere of control which concentrates on our operations; the amount of energy we consume and the way we consume it. Secondly, our sphere of influence – working with our customers, suppliers, and companies that we invest in to mitigate and adapt to the challenge of climate change. Thirdly, through our sphere of concern, we seek to work with other like-minded companies, associations and policymakers to discuss and construct frameworks, mechanisms and solutions to ensure fair, robust and complete processes are taken forward.
   3. We continue to offset 105% of our operational carbon emissions on a worldwide base, through the purchase of Gold Standard and Voluntary Carbon Standard carbon credits on the voluntary carbon market. The credits we purchase are from renewable energy and energy efficiency projects in non-Kyoto developing countries in which Aviva's operates and from the African continent which will be affected sooner and with greater impact than other areas of the world.
   4. Aviva's Group KPIs for Environment - /reports/cr2009/index20c0.html/
4. 1. We use the GHG Protocol conversion factors to calculate our emissions on a worldwide basis. Even though the volume is negligible, for the first time in 2009 we began to include fugitive emissions from our air conditioning; this is in line with good practice according to the Defra guidance on measuring and reporting greenhouse gas emission – 2009. Our carbon data is review and assured by a Third Party Assurance provider, Corporate Citizenship.
   2. Aviva publishes its environmental data in the Annual Report & Accounts and Corporate Responsibility Report. These reports are available on our website.

   3. Aviva uses the Accounting for Sustainability framework to report on our environmental impacts. This is included in our Annual Report & Accounts and Corporate Responsibility Report.

      Accounting for Sustainability framework data /reports/cr2009/index1af5.html/

   4. Third Party Assurance Statement - /reports/cr2009/index33eb.html/

5. To ensure that climate change issues are included in every aspect of Aviva's day to day business dealings we provide a communication framework and dialogue processes and opportunities so employees can engage on the issues that affect their roles. As well as including as including information in our Annual Report & Accounts and Corporate Responsibility Report, we also publish and online employee report. To supplement this we regularly include group and regional articles on Aviva World, Aviva's worldwide intranet.

   Aviva UK has 130 environment champions based at the majority of Aviva UK offices. They work with the building managers and have regular meetings to share good practices. They disseminate relevant information from the UK CR team and then feedback local issues.

   Two examples where this has worked very successfully is linking timing that heating and air conditioning plant is set to come on and go off with the operational timings of the business, and helping to create a successful way of moving colleagues who are working in the evening to one area of the building to reduce the demand on lighting and temperature. It has worked very successfully in the UK and so a similar environmental champion scheme is being rolled out across the fourteen countries in our European region.

   The UK Energy and Utilities team produce energy league tables on a monthly basis showing consumption in each of the locations.

   We run campaigns such as offering rewards for innovative ideas, this worked particularly well in the iSAVE campaign we ran at head office. Another way we have tried to bring climate change into the day to day life supporting projects such as Insulate Today – promotion of cavity and loft insulation at a reduced cost to our employees – a very practical way of raising the issue for the sole benefit for our employees.

   In December 2009 Aviva took part in ClimateWise's employee engagement online tool. The tool was made available to all Aviva employees that had access to Aviva's intranet through that to the internet.

   Aviva France reimburses 50% of employees' season tickets for public transport. Aviva USA provides free transport from train stations to and from the offices. Aviva UK provide free park and ride for employees where it is available and promote car sharing through a website and preferential parking and some offices.

   Through our employee flexible benefits offering we have included schemes for the purchase of bicycles and carbon credits.

   In 2007 Aviva's group chief executive decided that the executive team should have our annual Group CO2 reduction target of 5% included in their personal objectives which is in turn reflected in their performance bonus.

   We measure the ongoing success of our engagement on many different issues through our annual Employee Promise survey. The question we ask colleagues is "whether they feel Aviva makes business choices that support the environment". The results are measured at a team level, and are aggregated up to a business, region and group picture.

   This way we can pinpoint whether the focus and level of our employee engagement is right for our business. In 2009, on a global basis 62% of employees thought we were doing enough. The Global Financial Services benchmark for this is 54%. We include this measure as one of our KPI to monitor progress of our Corporate Responsibility programme.

1. The issue of climate change and our response as a member of the ClimateWise programme has increased in awareness and understanding both internally in Aviva and among our stakeholders. Climate change related issues are a regular feature on the Board CR Committee agenda and in September last year the Board CR Committee hosted NGO's, academics, other corporates and the media on the Aviva junk in Hong Kong to raise awareness of the issues of climate change in the Asia Pacific region.

   Aviva's group chief executive, Andrew Moss is the Board Sponsor of our Corporate Responsibility Programme (which includes climate change and environmental management). Last July, his thoughts on climate change leadership and opportunities were published in a Business for New Europe Report.

   Lord Sharman, Aviva chairman speaks regularly on issues of climate change and our responsible to the challenge including at the London launch of the Carbon Disclose Project report in October 2009 and the a dinner of the Worshipful Company of Chartered Accountants in February 2010, as well as being interviewed by the Daily Telegraph newspaper for a feature article on the subject.

   John Ainley, Aviva's group HR director and member of the Executive Team represents Aviva on the CBI's Climate Change Board and recently spoke at a CBI breakfast on the subject of Employee Engagement on climate change.

   We received approval for our sustainability strategy from our shareholders in April when we took the step of putting our CR report within the Annual Report and Accounts to a separate shareholder vote at our AGM. An overwhelming majority of votes cast, more than 99.9% were in favour of the CR report. As the first UK company and first financial services company in the world to do this, Aviva believes that its investors should have a voice on key environment and social issues.

2. This document constitutes Aviva's 2010 response to the ClimateWise Principles based on our actions taken in continuing to address the issue of climate change and is published on Aviva's website. Similar information is available in Aviva's Annual Report & Accounts and Corporate Responsibility Report; however this report provides the level of detail which cannot be realistically included in reports that seek to covers a wider scope of information.

   This response is available from our website at www.aviva.com/corporate-responsibility/our-approach/our-cr-relationships/