Environment

Aviva Master Trust adopts integrated ESG default strategy

The Aviva Master Trust Trustees are delighted to announce that they have adopted My Future Focus as the standard default investment strategy for the Aviva Master Trust.

My Future Focus offers a very broad and diversified range of asset classes, active asset allocation and fully integrates Environmental, Social and Governance (ESG) factors into its design.

The Trustees’ ambition is for the Aviva Master Trust to be at the forefront of ESG integration and they have worked with Aviva and Aviva Investors to develop the My Future Focus default investment strategy over the last year.  Over many years both Aviva and Aviva Investors have sought to take a leading role in corporate social responsibility and responsible investing:

  • Aviva was the first carbon neutral international insurer in 2006 and in 2016 became the first insurance company to declare climate neutrality in collaboration with the United Nation’s Climate Neutral Now campaign
  • As founding signatory of the Carbon Disclosure Project (2001) and the United Nations Principles for Responsible Investment (2006), Aviva Investors was recognised at the Responsible Investment Awards in 2017 for Innovation and Industry Leadership and was awarded the Global Leadership Award by the United Nations for its sustainability work in 2018. Aviva Investors’ ESG capability consistently receives top ratings from ShareAction and UNPRI.

The Trustees have formulated their own set of ESG investment beliefs, reflecting their conviction that by including ESG factors into investment decision making, it will reduce overall investment risks while generating sustainable returns for members of the Aviva Master Trust.

My Future Focus consists of both ESG tilted passive and actively managed funds from Aviva Investors’ multi-asset team, investing across a diversified range of asset classes, including developed and emerging market equities and government bonds, sterling and global corporate bonds, property and high yield bonds.

ESG factors are integrated into the My Future Focus default solution in multiple ways.

  • Where My Future Focus invests in Aviva Investors’ actively managed funds, ESG factors are integrated into the investment processes, which incorporate Aviva Investors’ proprietary ESG research.
  • Where My Future Focus invests in passively managed regional equity funds, Aviva Investors uses its ESG research to tilt these funds towards those companies with a higher ESG score by discarding those ranked in the lowest 10%.
  • Companies which derive prescribed levels of revenue from controversial weapons and civilian firearms are excluded, together with companies who consistently fail to engage on important ESG issues.
  • In addition, Aviva Investors uses its influence through engagement and voting to promote sustainable business practices, gain insight and reduce investment risk.

This ESG integration within My Future Focus has been running for 12 months already and the Trustees have developed bespoke reporting information with Aviva Investors to monitor its effectiveness.

The previous default strategy, My Future, will be retained as an alternative default alongside My Future Focus and as a default for those employers who do not wish to move to My Future Focus.  My Future will continue to be regularly reviewed and overseen by the Trustees.

Jon Parker, Trustee and Chair of the Investment Sub-Committee for the Aviva Master Trust said:

“As independent Trustees of the Aviva Master Trust we are passionate about ESG and focussed on ensuring that we are providing our members with default solutions that deliver strong risk adjusted returns whilst investing responsibly and sustainably in alignment with our ESG beliefs.

“ESG is not just about environmental principles, it’s also about the reduction of investment risk for our Master Trust scheme members. We believe that over the long-term companies with strong ESG credentials will outperform companies that do not take their ESG responsibilities seriously.

“My Future Focus provides our members with a really strong and differentiated default solution that meets these objectives at a very competitive cost.

“Aviva Investors has a very strong reputation for Responsible Investment and their active approach to voting and engagement will be a key benefit for our members."

Martin Palmer, Head of Master Trust for Aviva said

“We welcome the decision by the Aviva Master Trust Trustees to adopt My Future Focus as the standard default investment strategy for the Aviva Master Trust.

"This development is aligned with Aviva’s overall commitment to ESG across its workplace pensions. In October 2020, Aviva set a 2050 net-zero target for its own auto-enrolment default pension funds.”

-ENDS-

Fiona Murphy

Protection, Health and Regulation

Notes to editors:

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