- Aviva sets new 2050 net-zero target for its own auto-enrolment default pension funds.
- New research shows significant support for net-zero pensions target, with support particularly strong amongst those due to retire in the 2050s.1
- 59% of people think it’s important that pension funds become net zero by 2050.
- Two thirds (66%) of millennials 2 believe that government should make pension schemes achieve net-zero carbon emission status by 2050.
- 95% of pension scheme members remain in default funds that have traditionally taken little account of climate change.3
Aviva has set a new 2050 net-zero carbon emissions target for its own auto-enrolment default pension funds. This is aligned to the Paris Agreement and the Government’s own net-zero target. Aviva is committed to making progress towards the net-zero target as quickly as possible and is exploring the feasibility of a 2030 target, in-line with the Intergovernmental Panel on Climate Change (IPCC) 1.5-degree pathway4. As part of Aviva’s strategy to achieve this, it plans to invest over £5 billion into low carbon equities and climate transition strategies across its default funds over the next 18 months and will look to increase this level of investment after that.
Aviva is also calling on the Government to pass a law requiring auto-enrolment default pension funds to achieve net-zero carbon emissions status by 2050 to help to address the challenge of climate change.
Aviva’s call comes as the Pension Schemes Bill is about to go before the House of Commons for its second reading. Currently, the Bill only states that pension funds in the UK should disclose how they will assess and report on their exposure to climate change. Aviva is calling on the Government to amend the Bill so that auto-enrolment default pension funds are required to achieve net-zero by 2050.
The UK is legally bound to achieve net-zero emissions by 2050. The Government is due to publish a ‘net-zero strategy’ later this year. Aviva’s call aims to ensure pension schemes help achieve this.
of millenials (those due to retire in the 2050s) are concerned about climate change.
New research by Aviva reveals that concern about climate change is high, particularly amongst millennials. 77% of those due to retire in the 2050s (aged 25 – 34 today) are concerned, with a third of them (35%) saying they are extremely concerned. Yet only 37% of all people know that their pension can play a key role in tackling climate change.
of people are aware that their pension can play a key role in tackling climate change.
The research reveals that over half of all age groups (59%) think is important that pension funds ensure their investments help tackle climate change. Over half of those surveyed (56%) also ‘agree’ that the Government should require default pension funds to achieve net zero carbon emission status by 2050. This figure rises significantly amongst the millennial age group (66%) with a further 31% of those who ‘strongly agree’.
Aviva’s research shows that ethical and Environmental, Social and Governance (ESG) investing is front of mind with almost two thirds of millennials aware of it (57%), with one in six of them (13%) saying that they know exactly what ethical and ESG investing is. A further four in ten millennials (43%) are aware that how their pension savings are invested can significantly impact issues, such as climate change (compared to only 37% of all ages).
Moreover, when asked if they would invest through their workplace pension in an ESG/ethical focused fund if it was available, and easy to do so, the vast majority (71%) of millennials said they would – the highest proportion of all those surveyed.
Lindsey Rix, Chief Executive Officer of Savings and Retirement at Aviva, said: “The vast majority of savers are invested in a default fund – a fund which may take little account of climate change.
"The Government’s requirements for schemes to report on their exposure to climate change is a positive move, but we have a responsibility to go even further for our customers and the next generation of pensioners.
Make My Money Matter, the pensions campaign co-founded by Richard Curtis, celebrated Aviva’s move. Mr Curtis said: “We welcome Aviva’s leadership with the important commitments made today. With two of the UK’s leading pension funds now committed to Net Zero, that’s 13m pension pots tackling the climate emergency. However, there’s much more to do. That’s why Make My Money Matter is calling for all pension funds to match Aviva’s leadership and commit to net zero, with a halving of emissions by 2030.
"That’s the only way to ensure that our pensions are not only saving for our futures, but building a world fit for our retirement."
Rix continues, “We are working hard to offer more customers a simple and effective way to invest their money in a way that helps them to save enough for their retirement whilst also being good for the environment.
“We believe now is the time to go further. Climate change poses a significant risk to people’s pension savings and our research shows that people want pension funds to help tackle climate change and want the government to act. This is particularly true for those due to retire in the 2050s.
“That is why we are setting a target for our own auto-enrolment default funds to be net-zero by 2050. We also want to progress towards the net-zero target as quickly as possible and we are exploring the feasibility of a 2030 target in line with the IPCC’s 1.5-degree pathway. This is a challenging target, but we believe it is the right thing to do.
“However, if the UK is to meet its climate change targets, others must act too.
"We therefore call on Government to legislate to ensure that all auto-enrolment default pension funds become net-zero by 2050."
Aviva launched a default fund based on its Stewardship funds last year, which incorporate ethical and ESG considerations. It also integrates ESG into its My Future Focus default solution. This includes the exclusion of companies with the lowest ESG scores (based on Aviva Investors’ proprietary ESG score), integration of ESG factors into stock selection and active engagement with investee companies.
Methodology and Sources:
1 Aviva’s research was conducted by Censuswide, with a sample of 3,000 nationally representative respondents aged 16+ in GB between 24.08.2020 - 26.08.2020. Censuswide abide by, and employ members of, the Market Research Society which is based on the ESOMAR principles.
*Wherever ‘important’ is mentioned is this is refers to ‘very’ and ‘somewhat’
*Wherever ‘agree’ is mentioned is this is refers to ‘strongly’ and ‘somewhat’
*Wherever ‘concerned’ is mentioned is this is refers to ‘extremely’ and ‘somewhat’
2 Millennials aged 25-34 years old
Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
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- Aviva is invested in our people, our customers, our communities and our planet. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the most demanding target of any major insurance company in the world. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Aviva has been leading this agenda for decades: Aviva was the first international insurer to go operationally carbon neutral in 2006 and we are champions of renewable energy and energy storage at our offices, allowing us to achieve our 2030 carbon reduction target (70% reduction on 2010 levels) 10 years early. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
- Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at www.aviva.com/social-purpose
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- Total group assets under management at Aviva group as at 31 December 2020 are £535 billion and our Solvency II shareholder capital surplus is £12.5 billion as at 31 March 2021. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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