Socially responsible investments
With more than £164.2 billion of assets under management through its fund management business Morley, Aviva has been a leader in socially responsible investment (SRI) since 2000. More recently, Morley became a signatory to the UN Principles for Responsible Investment and the Institutional Investors’ Statement on Climate Change. It was rated the number one fund manager for its understanding of SRI and extra-financial issues for the third year running in the Thomson Extel survey.
We can promote more sustainable business practices by increasing the funds under management in our specialist SRI funds. We had £1.2 billion invested in companies that lead the way in environmental and social practices or that offer products and services that support sustainable development.
The key CSR impacts of our fund management business originate, indirectly, from the impacts of the companies in which we invest, so we try to mitigate these impacts by engaging with those companies we invest in and encouraging them to exhibit more responsible business practices.
Our commitment to socially responsible investment is worldwide. Aviva Italy began investing in a socially responsible fund in 2006, and launched a new product with similar features in 2007. The index-linked Presente e Futuro fund invests in a basket of indexes including the Wilderhill new energy global index and S&P global water, a fund that invests in organisations operating in renewable energy and water sectors.
In India, customers can choose between four funds when investing in our unit-linked products, while Eagle Insurance has widened customer choice in Sri Lanka with the introduction of new unit-linked ‘investment insurance’ products, which offer a range of funds investing in sectors ranging from government securities to equities.
Case study
Responsible investment at Morley
The key corporate responsibility impacts of Morley’s fund management business are indirect, originating from the impacts of the companies in which we invest. The principal way in which we mitigate these impacts is by engaging with the companies in which we invest in order to promote more responsible business practices. We also believe that we can promote more sustainable business practices by increasing the funds under management in our SRI funds, and by demonstrating that such an investment strategy can generate excess returns.
Morley’s eight-strong Sustainable & Responsible Investment (SRI) team has been in place for seven years and now manages over £1.2 billion of retail and institutional SRI funds. The SRI team works closely with Corporate Governance (CG) team, which is responsible for implementing Morley’s Corporate Governance Strategy. The SRI and CG teams are required to engage with companies on behalf all Morley’s £164.2bn (as at 30 November 2007) of assets under management.
The SRI and CG teams have four main aims:
- to grow SRI funds under management
- to outperform mainstream benchmarks
- to change corporate behaviour by promoting sustainable business practices
- to exercise ownership rights responsibly, on behalf of our clients, promoting good corporate governance, shareholder protection and value.
Engagement is an integral element of Morley’s investment approach. We recognise that as a significant shareholder in a number of companies, Morley has the power to potentially impact the course of corporate strategy and this brings a responsibility to engage. We engage with companies where we believe improved management of social, environmental or ethical (SEE), or governance issues will enhance or protect shareholder value.
In 2007, Morley won a number of awards for its SRI offering including:
- ‘Best Fund Manager for SRI’ Thomson Extel Survey
- NU Ethical Fund rated ‘A’ by Standard & Poor’s
- Second of 11 global fund managers for corporate responsibility in a commissioned benchmarking review by Forum for the Future