Glossary of sustainability terms used in Aviva

We have made every effort to keep our website free of jargon, but realise that some expressions might need further explanation.

Absolute Carbon Emissions

Absolute emissions is the amount of emissions created in a set period of time. Emissions may be based on actual or estimated data and for financed emissions are attributed using an attribution factor.


Climate change adaptation is the process of altering behaviour, systems, and communities to protect the environment, society and the economy from the impacts of climate change.

Arctic Drilling

The term Arctic Drilling is geographical and includes oil production activities north of the 66.5 latitude. This includes offshore or onshore oil production.


Anything of value owned by a business that can be set against its liabilities. Assets are usually divided into four types: fixed assets (typically land, buildings and machines); current assets (cash, stock, investments, work in progress and payments owing); liquid assets (cash or funds held in a form that can be quickly converted into cash); and intangible assets (goodwill, trademarks, patents, etc).

Aviva Master Trust

A master trust workplace pension is a defined contribution scheme which is administered under the guidance of a trust.

Aviva’s Sustainability Ambition

Our sustainability ambition, is focused on three core areas:

  • Social action – we aim to help build stronger communities;
  • Climate action – we have an ambition to be Net Zero by 2040; and
  • Sustainable business – we act to embed sustainability into the way we run our business.


The variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems. At Aviva we tend to use the terms Nature and Biodiversity.

Blue Carbon

Carbon captured and stored in coastal and or marine ecosystems.

Carbon Credits

Carbon credits or offset is a generic term used to assign a value to a reduction, avoidance or capture of GHG emissions achieved by a certified project. It is equivalent to one tonne of carbon dioxide equivalent (CO2e).

Carbon intensity

Carbon intensity is calculated by dividing carbon emissions by an appropriate usage metric such as revenues, square footage of buildings, number of employees etc. Aviva uses the following intensity measures:

  • Economic carbon intensity (ECI): the intensity of GHG emissions attributed to investments per £m invested. This measure is relevant for all asset classes.
  • Weighted average carbon intensity (WACI) revenue: Weighted average of investee company carbon intensity by revenue, i.e. greenhouse gas emissions (tCO2e) divided by revenue of investee company in USD millions, where the weight reflects investment weight in the relevant portfolio.
  • Real estate (Direct Real Estate & Commercial Mortgages) carbon intensity: greenhouse gas emissions attributed to real estate investments per metre square of attributed floor space.

Carbon neutral

The amount of carbon released is offset by a reduction in carbon emissions from an activity outside the company boundaries. These carbon savings come in the form of carbon credits that do not represent removals of carbon from the atmosphere, but instead emissions that have been reduced from a pre-project baseline.

Carbon reduction

The process of reducing carbon / greenhouse gas emissions through improving business processes. This is seen as essential step prior to the offsetting of residual emissions as it means that less carbon is generated, reducing the need to offset emissions.

Carbon removal

The process of removing carbon dioxide from the atmosphere and locking it away for decades, centuries, or millennia. This could slow, limit, or even reverse climate change. Examples include nature based solutions such as reforestation or technology based solutions such as carbon capture and storage from an industrial process or direct air capture.

Climate Action 100+

Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.

Climate crisis

This is a term describing global warming and climate change, and their consequences. The term has been used to describe the threat of global warming to the planet, and to urge aggressive climate change mitigation.

Climate transition funds

Investment funds which aim to deliver growth by investing in companies that either aim to provide solutions to climate change or aim to orientate their business models to a low-carbon economy, while aiming to avoid the most carbon intense fossil fuel-based companies.

Climate transition plan

A climate transition plan sets out how an organisation will aim to transition its business to the low carbon economy, aiming to align its operations, assets, portfolio, and business model to meet Net Zero.

Climate Value-at-Risk (Climate VaR)

Aviva has developed a Climate VaR measure which enables assessment of the possible financial impacts of future climate-related risk and opportunities. The metric has been developed through an inter-disciplinary team which was created with representation from across the business. An expert panel reviews and challenges the main assumptions made in the selection, development and modelling of the financial impacts across scenarios.

Community investment

The gross monetary amount from Aviva Group in support of community organisations/projects/cause, including: Voluntary activities, beyond our core business activities and our legal obligations, that contribute to the economic, social and environmental sustainability of our communities. All charitable spend, management costs, value of gifts in kind and the cost of volunteering in alignment with the Business for societal impact (B4SI). B4SI benchmark is a framework used by corporates to calculate their community investment spending.


COP stands for “Conference of the Parties”. A COP is the main decision-making body around a particular issue such as Climate Change or Biodiversity. For example; Climate Change is governed by the United Nations Framework Convention on Climate Change (UNFCCC). A COP meets annually to assess the effects of measures it has implemented. Key recent examples below:

  • COP15 - The 15th meeting of the Conference of the Parties (COP) to the Convention on Biological Diversity (CBD) was held in Montreal in December 2022. It achieved the adoption and implementation of a “Post 2020 Global Biodiversity Framework” (GBF), a roadmap of what countries need to do to reverse nature loss.
  • COP26 - The 26th UN Climate Change Conference of the Parties was held in Glasgow in November 2021. The COP26 summit brought parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.


Stands for carbon dioxide (CO2) equivalent. There are a number of greenhouse gases which warm the earth at different intensity levels such as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3). Rather than providing metrics for each gas they are converted into CO2e for reporting.


Divestment is where shareholders sell a firms’ shares, typically because engagement has failed to influence the firm’s behaviour or the firm does not meet the investor’s minimum ESG standards.

Dormant Assets

Funds held within financial services products which have not been accessed for a certain period of time, and attempts to trace their owners to reunite them with their money have been unsuccessful. Find out more about Aviva’s Dormant Assets scheme here.

Emissions (carbon)

A type of carbon (such as carbon dioxide) released into the atmosphere, often through human activity such as the burning of fossil fuels such as coal or gas.

Engage and divest

Engagement is where shareholders seek to influence firm behaviour through direct engagement, filing shareholder proposals and voting at AGMs. Divestment is where shareholders sell a firms’ shares, typically because engagement has failed to influence the firm’s behaviour or the firm does not meet the investor’s minimum ESG standards.

Environmental, Social, and Governance (ESG)

Environmental (e.g. pollution), Social (e.g. labour standards) and Governance (e.g. board diversity and accountability) are the three factors commonly used to measure the sustainability and social impact of a firm.

ESG defaults and choices

Making it easy for retail investors to choose ESG investments. Where an investment vehicle uses default funds, such as workplace pension solutions, these funds are ESG based.

Ethical investments

Ethical investing refers to the practice of using one’s ethical principles as the primary filter for the selection of securities investing. Ethical investing depends on an investor’s views. Ethical investing gives the individual the power to allocate capital toward companies whose practices and values align with their personal beliefs. Choosing an investment based on ethical preferences is not indicative of the investment’s performance.

Exclusion Baselines

Baseline Exclusions are exclusions to investment or underwriting set by Aviva. Climate change exclusion baselines specifically focus on Thermal Coal, Arctic Oil, and Oil (tar) Sands – please see the policies for the information on revenue thresholds.

FCA’s Sustainability Disclosure requirements

A package of measures aimed at clamping down on greenwashing. This includes sustainable investment labels, disclosure requirements and restrictions on the use of sustainability-related terms in product naming and marketing.

Financed Emissions

Our financed emissions metric covers the greenhouse gas emissions which Aviva finance through its investments under Scope 3 Category 15 of the GHG Protocol. Our financed emissions metric includes investee Scope 1 and Scope 2 emissions and does not include investee Scope 3 emissions.

Finance for Biodiversity Foundation Pledge

A group of financial institutions calling on global leaders to protect and restore biodiversity through their finance activities and investments.

Financial Sector Deforestation Action Initiative (FSDA)

A results-driven collaborative of financial institutions that unites members around a shared approach to tackling deforestation and creating essential cooperation across other climate and nature-related initiatives.

Glasgow Financial Alliance for Net Zero (GFANZ)

The world’s largest coalition of financial institutions committed to transitioning the global economy to net-zero, launched in April 2021. GFANZ lists 2 key purposes: to expand the number of net zero-committed financial institutions and to establish a forum for addressing sector-wide challenges, helping to ensure high levels of ambition are met with credible action.

Global Biodiversity Framework (GBF)

A framework aiming to address biodiversity loss, restore ecosystems and protect indigenous rights. The plan includes concrete measures to halt and reverse nature loss, including protecting 30 per cent of the planet and 30 per cent of degraded ecosystems by 2030.

Good Business Charter

An accreditation which UK organisations can sign up to in recognition of 10 responsible business practices. All 10 commitments must be met to receive accreditation.

Greenhouse Gas Protocol

A comprehensive, global, standardized framework to measure and manage greenhouse gas emissions from private and public sector operations and climate change reduction activities.

IIGCC - The Institutional Investors Group on Climate Change

A European body for investor collaboration to support and enable the investment community in driving significant and real progress by 2030 towards a net zero and resilient future. To be achieved through capital allocation decisions, stewardship and successful engagement with companies, policy makers and fellow investors.

Impact investing

A subset of ESG investing. An investment strategy whereby an investor proactively seeks to place capital in businesses that can generate financial returns as well as intentional and measurable social and / or environmental goals.

Independent Assurance or Assurance

An independent review of sustainability metrics, claims or reports.

Inertial Trajectory

Inertial trajectory show the evolution of portfolio emissions if the company takes no additional climate action above and beyond considering public pledges from policyholders, investees and announced regulatory changes.

Intergovernmental Panel on Climate Change (IPCC)

This Is the United Nations body for assessing the science related to climate change.

Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)

An independent intergovernmental body established to strengthen scientific policies for the conservation and sustainable use of biodiversity, human well-being and sustainable development.

International Sustainability Standards Board (ISSB)

As part of the wider IFRS Foundation, the ISSB is developing standards for a global baseline of sustainability disclosures. Focussing on sustainability-related risks and opportunities, the standards are designed to meet the needs of investors and to enable companies to provide comprehensive sustainability information to global capital markets.

Investment in sustainable assets

Our investment in sustainable assets is made up of four sub-categories: green assets, sustainability assets, social bonds and transition & climate-related funds.

Just Transition

The Just Transition focusses on the transition away from high-carbon activities into the green economy with its principles covering; support for workers in the transition to new jobs, supply chain considerations, economic strategies and Paris Agreement reporting. A declaration on “Supporting the Conditions for a Just Transition Internationally” was agreed at COP26 by a number of countries.

Low Carbon Economy

A low-carbon economy (sometimes referred to as a decarbonised economy) is based on energy sources that produce low GHG emissions.

Low Carbon infrastructure

Infrastructure such as transport systems or buildings that produce lower carbon emissions than traditional infrastructure and uses renewable energy such as solar and wind.


Climate change mitigation means avoiding and reducing GHG emissions to try and reduce the impacts of climate change.

Natural Capital Transition Global Equity Fund

Investment fund which aims to deliver long-term capital growth by investing in companies globally that either provide solutions to reduce biodiversity loss or are transitioning their business models to manage their impact on nature, while avoiding those that do not meet minimum environmental criteria.

Nature-based Solutions

Nature-based solutions aim to harness the power of nature to reduce greenhouse gas emissions and help to adapt to the impacts of climate change. These solutions involve protecting, restoring and sustainably managing ecosystems to address society’s challenges and promote human well-being. Forests, peatlands, wetlands and mangroves are some examples of nature-based solutions.

Negative emissions technologies

Technologies that aim to remove carbon from the atmosphere e.g. machines that capture carbon dioxide from the air and sequester it.

Net Zero

The process of achieving net zero impact on the environment by balancing the amount of carbon emissions produced against schemes and projects that remove carbon from the atmosphere, such as nature-based solutions and or carbon offsetting.

Net Zero ambition

An organisation's ambition to reach Net Zero carbon emissions by a specific date.

Net Zero Asset Owner Alliance (NZAOA)

A United Nations convened group of institutional investors who are working together to aim to transition their investment portfolios to net-zero greenhouse gas emissions by 2050.

Net Zero Insurance Alliance (NZIA)

Aviva is one of the members of NZIA which consists of insurers and reinsurers that are working together to aim to transition their insurance and reinsurance underwriting portfolios to net zero greenhouse gas (GHG) emissions by 2050.

Non-Fossil Fuel Project Finance Bond

Project bonds are issued to finance a specific project and the bond proceeds are paid exclusively from the cash flow generated by that project. A Non-Fossil Fuel Project Bond relates to a real assets project that does not involve activities relating to fossil fuels.

Oil Sands

Oil Sands (also known as Tar Sands) is viscous crude oil (or bitumen) and/or associated fossil fuel derivatives that are trapped in sandstone.

Operational carbon emissions

Operational carbon emissions includes emissions from a company’s buildings, business travel, water and waste to landfill as generated during the year.

Operational Scope 1 emissions

Scope 1 emissions cover operational emissions from owned sources. This includes natural gas, oil (diesel oil), company car mileage and fugitive emissions from air-conditioning.

Operational Scope 2 emissions

The total quantity of indirect GHG emissions from purchased energy. Scope 2 emissions cover emissions generated from the electricity used in all the buildings a company operates, as calculated by the location-based and market-based methodology.

Location based – Operational emissions from non-owned sources (i.e., power plants) using an average emissions intensity for the grids on which energy consumption occurs. This includes purchased electricity, municipal heating and cooling.

Market based – Operational emissions where we have contractual arrangements for renewable electricity, e.g. through on-site generation, certified renewable electricity through a supplier tariff or the separate purchase of renewable energy guarantees of origin (REGOs) or market equivalent, or consumed renewable heat or transport certified through a Government scheme.

Operational Scope 3 emissions

The total quantity of indirect emissions (not included in Scope 1 and Scope 2) that occur in the value chain including both upstream and downstream emissions (Scope 3). Operational Scope 3 emissions cover operational emissions from business travel (air, rail, grey fleet, and rental cars), water, waste, electricity transmission and distribution, and homeworking.

Paris Agreement target

This is a 1.5°C target set by the global Paris climate change deal in 2015 to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

Powering Past Coal Alliance

The UK and Canadian Government created a national commitment for countries to ‘Power Past Coal’ which was launched at the UN Climate Change Conference (COP23) in 2017. We were a founding member of the Financial Principles committing to cease supporting thermal coal power investments and underwriting by 2030.

Science Based Targets Initiative (SBTi)

The SBTi is a collaboration between United Nations Global Compact, CDP, World Resources Institute and WWF. It supports companies to set emission reduction targets in line with the decarbonisation required to limit global temperature increases to 1.5°C.

Scope 1, Scope 2 and Scope 3 emissions

Greenhouse gas emissions are categorised into three groups or ‘Scopes’. Scope 1 covers direct emissions e.g. use of natural gas, company car vehicle emissions. Scope 2 covers indirect emissions from the generation of purchased electricity, steam and heating. Scope 3 includes 15 other categories of indirect emissions in a company’s value chain e.g. business travel and investments.

Social infrastructure

The construction and maintenance of facilities that support social services such as healthcare (hospitals), education (schools and universities), public facilities (community housing and prisons) and transportation (railways and roads).

Social Transition Global Equity Fund

Investment fund which aims to deliver long-term capital growth by investing in companies globally that either provide solutions to social inequality or are transitioning their business models to manage their social impact, while avoiding those that do not meet minimum social criteria.


The UK Stewardship Code 2020 defines stewardship as “the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.” Aviva UK Insurance, Wealth and Retirement business published a stewardship statement which takes into account the 12 principles of the FRC Stewardship Code.


Aviva’s Investment Stop List represents a list of Excluded Issuers, securities or countries which the business may not be permitted to deal in.


All activity that can be considered as taking account of profit, people and the planet (also known as the ‘triple bottom line’). A more formal definition is “meeting the needs of the present without compromising the ability of future generations to meet their needs”.

Sustainability Accounting Standards Board (SASB)

An ESG guidance framework that sets standards for companies to report against industry specific guidance for financially material sustainability information. SASB was consolidated into ISSB in 2022.

Sustainability Disclosure Requirements (SDR)

The UK Government announced SDR at COP26 for pension funds, investment products and companies to report under. The requirements build on the foundations of the TCFD four pillars; Governance, Strategy, Risk Management, and Metrics and Targets. Certain companies will be required to disclose their Green Taxonomy-aligned activities and progress against their climate transition plans.

Sustainability risk

Sustainability risk means being able to meet the economic needs of the business without compromising society or the environment in the long-term.

Sustainable Assets

Our investment in sustainable assets is made up of four sub-categories:

  1. Green assets
    1. Infrastructure assets (direct and debt) - Energy, Transport, Water (including nature-related solutions), Waste, Land Use categories identified as eligible under CBI green bond database methodology (2022) – this includes green energy such as solar electricity, offshore and onshore wind.
    2. Real estate (direct and debt) - Categories defined as eligible under CBI green bond database methodology (2022). This category includes properties with EPC ratings of A and above as well as BREEAM of excellent and outstanding.
    3. Bonds and loans - In CBI green bond database and benefits from an external review.
  2. Social bonds
    1. Bonds and loans - Tagged social in CBI social and sustainability bond database and benefits from an external review.
  3. Sustainability assets
    1. Infrastructure assets (direct and debt) Non-electrified passenger rail and ICE-powered urban public transport.
    2. Bonds and loans. Tagged sustainability in CBI social & sustainability bond database (which includes sustainability and sustainability-linked bonds) and benefits from an external review. Sustainability linked loans which meet the Sustainability-Linked Loan Principles (SLLP) from the Loan Market Association (LMA) and benefits from an external review.
  4. Transition & climate-related funds. See the table below for more detail on the sustainable asset definition.
    1. Funds - Climate transition funds, Social transition fund, Natural capital transition fund, Climate/decarbonisation venture capital funds.

Sustainable Bonds

Bonds are issues where proceeds are used to finance or re-finance a combination of green and social projects or activities.

Sustainable Development Goals (SDGs)

These are 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all”. They were set in 2015 by the United Nations and are meant to be achieved by 2030. Many firms use them to orient their sustainability action.

Sustainable Finance

Sustainable finance takes the environmental, social and governance (ESG) impacts into account when making investment decisions. This means that more long-term investments are made in sustainable economic activities and projects. Find out more about Aviva’s approach to Sustainable Finance here.

Sustainable impact and Net Zero aligned funds

Net Zero aligned funds are investments that are aligned with Net-Zero emissions by 2050 or sooner. Sustainable impact funds are broader and are investments that aim to deliver positive ESG outcomes.

Task Force on Climate-related Financial Disclosures (TCFD)

The Financial Stability Board created the TCFD to improve and increase reporting of climate-related financial decision useful information. TCFD is a reporting framework to report climate-related risks and opportunities.

Task Force on Nature-related Financial Disclosures (TNFD)

The Financial Stability Board created the TNFD to develop a risk management disclosure framework to enable decision useful nature-related reporting. The TNFD will build upon the structure and foundation of the TCFD. The TNFD was announced in 2020 and its requirements are under development.

Temperature alignment

The temperature alignment metric assesses temperature alignment with the Paris Agreement target of limiting global warming to well below 2°C, preferably to 1.5°C above pre-industrial levels, in respect of our investments.

Thermal Coal

Thermal Coal includes lignite, bituminous, anthracite and steam coal, and excludes revenue from metallurgical coal.

Transition Pathway Initiative

An independent, authoritative source of research and data into the progress being made by the financial and corporate world in making the transition to a low-carbon economy.

UK Green Taxonomy

A framework drawn up by the UK Government which sets out the criteria which specific economic activities must meet to be considered environmentally sustainable.


The process of selecting which risks an insurance company can cover and deciding the premiums and terms of acceptance. On the stock exchange, an arrangement by which a company is guaranteed that an issue of shares will raise a given amount of money, because the underwriters promise to buy any of the issue not taken up by the public.

Vector-borne diseases

Vector-borne diseases are human illnesses caused by parasites, viruses and bacteria that are transmitted by vectors.

Woodland Carbon Code

The Woodland Carbon Code (WCC) is the quality assurance standard for woodland creation projects in the UK, and generates high integrity, independently verified carbon units. Backed by the Government, the forest industry and carbon market experts.