Aviva has today announced its plan to become a Net Zero carbon emissions company by 2040. This is the most demanding target of any major insurance company in the world today. The undertaking, which will inform every aspect of operations and investment decisions at Aviva, is part of its strategy to be the UK’s leading insurer, contributing to a sustainable economic recovery.
Aviva’s 2040 Net Zero plan means:
- Net Zero carbon emissions from its investments by 2040;
- A clear pathway to Net Zero: a cut of 25% in the carbon intensity of its investments by 2025 and of 60% by 2030. This is ahead of the 50% cut required by the Paris Agreement;
- Net Zero carbon emissions from its own operations and supply chain by 2030.
It will cover Aviva’s scope 1, 2 and 3 emissions, and include shareholder assets and policy holder assets where Aviva has decision-making control.
Progress towards this target will be tracked through annual, public reporting. Aviva is setting out a pathway to achieve its goal with immediate actions and targets for 2025, 2030 and 2040. It will sign up to the internationally recognised Science Based Targets initiative so its work can be validated. Aviva uses active ownership to drive companies to reduce their carbon emissions. Aviva supports the transition to low carbon and will continue to invest in non-fossil fuel project finance bonds.
Aviva is taking further action on coal immediately. By the end of 2022 it will divest from all companies which make more than 5% of their revenue from coal unless they have signed up to the Science Based Targets initiative.
In addition, by the end of 2021, Aviva will have stopped underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they have signed up to the Science Based Targets initiative.
Aviva will also be the first insurer to put its Taskforce for Climate-related Financial Disclosure (TCFD) to an advisory vote at its Annual General Meeting of Shareholders in May this year.
Amanda Blanc, Aviva Group Chief Executive Officer, said:
“Aviva is taking bold steps to help tackle the climate crisis. As the UK’s leading insurer, we have a huge responsibility to change the way we invest, insure and serve our customers. For the world to reach Net Zero, it’s going to take leadership and radical ambition. And it is going to take Aviva to play our part.”
For the world to reach Net Zero, it's going to take leadership and radical ambition.
Business and Energy Secretary Kwasi Kwarteng said:
“Businesses have a huge and vital role to play in tackling climate change. It is fantastic that Aviva is taking radical action across its business, which will help the UK eliminate its contribution to climate change and influence other businesses to move in the same direction.
“In order to reach our 2050 climate target, we must work with companies like Aviva to harness the strength of the UK’s world leading financial sector to unleash the private capital necessary to reduce carbon emissions and support new jobs as the UK builds back greener.”
Aviva’s plan to reach Net Zero carbon emissions by 2040 includes:
- The main asset classes of its core markets: credit, equities, direct real estate and sovereign debt (for which the methodology is being developed this year); Aviva will be able to expand this further as data and methodologies become available.
- Increasing green investments:
- By the end of 2022, Aviva expects to invest a further £10bn of assets from its auto enrolment default funds and other policyholder funds into low carbon strategies (of which £5bn has already been announced);
- By 2025, it will invest £6bn in green assets, including £1.5bn of policyholder monies into climate transition funds;
- By 2025, Aviva Investors will invest £2.5bn in low carbon and renewable energy infrastructure and deliver £1bn of carbon transition loans.
- Net Zero in Aviva’s operations by 2030, for example 100% renewable electricity for all offices which total 230,231 square metres, and 100% electric/hybrid vehicle new leases for its 1,540-motor fleet by 2025.
Engaging companies to make the transition is critical. In January 2021, Aviva Investors announced it is intensifying active ownership of investments through its ‘climate engagement escalation programme’, starting with 30 systemically important carbon emitters in the oil and gas, metals and mining, and utilities sectors. Aviva Investors is making specific asks of these companies, including signing up to Science Based Targets aligned to the Paris Agreement and setting fixed deadlines of between 12 and 36 months. If Aviva Investors does not see evidence of serious engagement from the companies to meet the climate challenge, it will put them on its stop-list and divest itself of any assets it holds.
Emissions reductions will make up the vast majority of Aviva’s shift to Net Zero. However, the company expects to need to remove residual emissions in 2040 and will invest in nature-based solutions and other options to do this. Today, it announces a first step with £100m committed to nature-based solutions by 2030.
The targets announced build on Aviva’s leadership and decades of work on environmental, social and governance issues. Today, it takes the next step in its ambition to become a leader in sustainability.
UK Net Zero Business Champion, Andrew Griffith said:
“It is great to see Aviva take such an influential step to become a Net Zero company by 2040, leading the UK’s financial sector on a path to a resilient, green future.
“As part of our Together for Our Planet campaign, this is exactly the sort of ambition that we want to celebrate, inspiring other businesses to build back greener as we transition together towards a prosperous, low carbon economy.”
Commenting on Aviva’s pledge, Richard Curtis, co-founder at Make My Money Matter said:
“Aviva’s announcement today makes it a global leader on Net Zero, and in driving the transition towards a green financial system. Before COP26, it’s crucial that the entire industry aligns to the Paris Climate Agreement, and Aviva is showing the critical steps which must be taken: ambitious, front-loaded targets, investment in climate solutions, divestment from coal, annual reporting on progress, shareholder engagement, and science-based, independent verification.
“In going above and beyond its peers this Net Zero pledge leads the race to the top we need to see from all financial institutions who recognise the dual role they play in fighting the climate crisis while at the same time working for their customers’ interests.
“Now is the moment for the rest of the industry to step up and join the movement. The UK finance industry has the opportunity and responsibility to harness our economic system for the good of people and planet. They need to be the heroes of the hour. Aviva’s pledge should push others to outline their own ambitions to tackle the climate crisis head on and build a better world for our children.”
Aviva’s journey on climate action:
- The first operationally carbon neutral international insurer in 2006;
- Exited the London Market for insurance of stand-alone fossil fuel generation in 2019 and replaced this with a renewable energy insurance offering, providing cover for windfarms and other renewable assets;
- One of the first companies to disclose key climate risks through the TCFD-approach;
- Cut operational emissions by 66% since 2010 and cut the carbon intensity of shareholder credit and equity investments by 20% over the last two years;
- Opened one of the UK’s largest solar and energy storage facilities at its Perth office.
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Notes to editors:
- We are the UK’s leading Insurance, Wealth & Retirement business and we operate in the UK, Ireland and Canada. We also have international investments in India, China and Singapore.
- We help our 18.7 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
- We have been taking care of people for more than 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2022, we paid £23.2 billion in claims and benefits to our customers.
- In 2021, we announced our ambition to become Net Zero by 2040, the first major insurance company in the world to do so. We are aiming to have 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. While we are working towards our sustainability ambitions, we acknowledge that we have relationships with businesses and existing assets that may be associated with significant emissions. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition and action at www.aviva.com/sustainability
- Aviva is a Living Wage, Living Pension 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 https://www.aviva.com/about-us/our-people/
- As at 30 June 2023, total Group assets under management at Aviva Group were £358 billion and our estimated Solvency II shareholder capital surplus as at 30 September 2023 was £7.6 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
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