Aviva has launched the Stewardship funds onto its Adviser Platform, providing a new option for pension customers who want to invest with ethical and ESG (environmental, social and governance) considerations.
The move comes a year ahead of a significant ESG-related milestone in the UK that means financial advisers will need to be more proactive with customers in relation to ESG considerations by asking them about their preferences. This is expected to come into force in Q1 2021 as a result of amendments to the Markets in Financial Instruments Directive II (MiFID II) and the Insurance Distribution Directive II (IDD II) regulations.
This builds on the launch in July of the ‘Stewardship lifestyle strategy’ - a workplace pension default investment strategy based solely on the Stewardship funds.
The funds will initially be available through the pension wrapper. Reflecting the importance of multi-asset fund risk assessments to the Financial Adviser community, Aviva is working to provide an externally-recognised fund risk-profile for the Managed fund.
Launched in the 1980s, the Stewardship funds have a proud heritage as the country’s first ethical fund range, while also incorporating ESG considerations. The range currently has £2.4bn of assets under management* and incorporates five funds – Managed, UK Equity, UK Equity Income, International Equity and Bond.
The philosophy of the Aviva Stewardship funds recognises that the contribution companies make to a sustainable society depends both on the products and services they provide and the way they provide them.
This results in the funds excluding companies that do not meet certain ethical standards or that harm society or the environment.
Alongside this, the team from Aviva Investors who manage the Stewardship funds engage and support companies that make a positive contribution to a sustainable society and encourage positive environmental, social and governance practices.
Lindsey Rix, Chief Executive of UK Savings & Retirement** at Aviva, said:
“Responsible investing is here to stay. In just over 12 months, regulations come into force which will impact every financial adviser. We want to help advisers rise to the challenge and the Stewardship funds are a fantastic place to start.
“Advisers now have the opportunity to discuss their clients’ beliefs and align their investments with their values. There is an expectation from many consumers that their investments should provide a return while also considering their impact on the planet or society. Ethical and ESG investing can help achieve this.”
How does Stewardship work?
The Stewardship funds investment approach is based on three layers:
- Exclusion – principally based on what a company does i.e. companies with a significant involvement in tobacco, pornography, coal mining etc are excluded from the funds
- Engagement – working with companies to improve how they conduct their business
- Outcome – measuring the ESG performance of the companies in which the funds are invested.
The value of investments can go down as well as up. Customers may get back less then has been invested.
The Stewardship funds are managed by Aviva Investors (AI). AI’s Global Responsible Investment (GRI) team, led by Steve Waygood, includes a 22-strong ESG team. They maintain the policy that guides the funds and ensures they continue to adhere to the Stewardship philosophy.
Steve Waygood, Chief Responsible Investment Officer at Aviva Investors, said:
“The Stewardship funds were the original ethical investment range in the UK and some advisers working today will remember them from the launch in the 1980s. I hope many will be pleased to see they can now access the funds through the Aviva Adviser platform.
“Launching the funds onto the Adviser Platform means advisers have options that can help them remain compliant when the new regulations come in. But it also means that a wider range of people now have access to ethical funds, so they can tailor their investments in line with their beliefs.”
*Source – Aviva, as at 01/11/19
**Subject to regulatory approval
Aviva & corporate responsibility
- Aviva is a Living Wage employer
- Aviva has introduced equal parental leave for all new parents
- Shareaction has rated Aviva as ‘AAA’ for managing climate risk
- Aviva was the first carbon neutral international insurance company
- Aviva is co-founder of the World Benchmarking Alliance
- Aviva has committed to removing single-use plastics from its UK offices
- ENDS -
Notes to editors:
- Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
- Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.
- We operate through five business divisions: Investments, Savings & Retirement; UK Life; General Insurance; Europe Life; and Asia Life; and focus on three strategic priorities: deliver great customer outcomes, excel at the fundamentals and invest in sustainable growth.
- Total group assets under management at Aviva group are £510 billion and our Solvency II capital surplus is £12.6 billion (FY19). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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