- New Climate-Ready Index shows UK ranks 3rd among G7 economies
- Research shows UK SMEs need support to take climate action in current economic environment
Aviva today launches a campaign for the UK to be the most climate-ready large economy by 2030 as it releases its first Climate-Ready Index – a framework to measure how influential countries (G7*nations +Ireland) are progressing on climate mitigation, resilience and adaptation. Aviva is calling for action in a number of areas to combat climate change. It comes as new research highlights the risk that UK SME businesses could pull back from taking climate action to reduce their impact on the climate and to protect their businesses from the effects of climate change, in the current economic environment.
The YouGov research found that 72% of UK businesses know they need to get climate-ready but only one in three have plans to do this. Only 36% of UK companies surveyed say they are taking action to protect their operations against extreme weather events and just 34% say they have a structured plan in place to reduce their carbon footprint.**
Aviva believes that getting climate ready will be vital for the future, and an opportunity for long-term green growth in the UK, but in the short term nearly seven out of ten (68%) SMEs agree that “Dealing with the cost of living and business operations is a greater business priority than implementing climate policies”. Nearly half (48%) said “whilst they recognise they should do more to reduce their carbon footprint, the costs of doing so are unaffordable during these uncertain times.” A further one in three (34%) SMEs said they’d “paused any investments in activities to address climate change because of the current economic climate.”***
The Climate-Ready Index, created by Aviva in collaboration with Good Business and external climate experts, tracks eleven key measures of climate-readiness including:
- reducing emissions
- supporting biodiversity
- building climate-resilient infrastructure, and
- helping communities and small businesses prepare for the impact of climate change.
It reveals that the UK is currently ranked third for climate-readiness, with Germany taking the top spot, closely followed by France in second place.
The UK’s third position is primarily based on its strong performance in emissions and mitigation, relating to its national-level net-zero targets, progress towards targets and the ambition of future policies. The UK’s 2050 target combined with a short-term target to fully decarbonise the UK power system by 2035, contribute to the UK’s number three position. Policies to support renewable energy production, carbon capture usage and storage, and electric vehicle use underpin observations made about UK strengths in emissions and mitigation.
However, the UK had weaker scores across all remaining areas of the index, compared to other nations. For example, it scores low on biodiversity (ranking fifth), indicating significant habitat loss, degradation and fragmentation relative to what should naturally exist. Also concerning is the low score for ‘business readiness’ (seventh). This indicates British businesses risk falling behind in protecting themselves against climate impact and in helping deliver a more climate-ready country and world.
Amanda Blanc, Group Chief Executive Officer of Aviva said: “I want the UK to be the most climate-ready large economy in the world by 2030, as the country moves towards its net-zero targets. Being climate-ready goes way beyond the critical work of cutting emissions. It’s going to take leadership from government and business so that people and communities can be much better prepared across a range of areas from greener buildings to protecting biodiversity and expanding carbon storage. Current financial pressures are understandably making it harder for many businesses to invest in climate action right now, even though they recognise they need to do more. Government and bigger businesses have a responsibility to help SMEs get climate-ready.”
Aviva is calling on the UK Government and financial institutions to take action to help the UK and the world become more climate-ready by:
- Ensuring countries have binding net-zero ambitions and plans – aligned with science and include short, medium and long-term targets. Plans should cover detailed policy by sector, including for investment. Targets and plans should be independently assessed. Governments should be formally accountable for delivery.
- Ensuring regulators incorporate climate risks – regulators' mandates should be updated to include climate. They should shape and enforce consistent and comparable climate disclosure, including for corporate net-zero transition plans. Regulation and frameworks affecting investment (e.g. Solvency II) should be assessed to ensure they do not discourage but enable climate investments.
- Building climate resilience – too many governments prioritise reducing emissions over preparing for climate impacts. Both are essential. Governments should work with the private sector and local authorities to develop national and regional climate resilience plans.
- Protecting nature and biodiversity – protecting and restoring nature will reduce net emissions, help limit climate impacts and improve our quality of life. For too long it has been an afterthought in government policy in many countries. We want governments to assess nature and biodiversity as part of the net-zero and resilience planning processes above.
- Enhancing international cooperation – no single country can tackle the climate crisis alone. Yet the big "multilateral organisations" (e.g. the IMF, World Bank, OECD) and standard setters (e.g. Financial Stability Board) haven't yet updated their roles fully to address climate. We propose countries convene a summit to harness the international financial architecture to the promotion of a global net-zero target.
Emma Howard Boyd, Former Chair of England’s Environment Agency and UN Global Ambassador to Race to Zero and Race to Resilience said: “Every day, all over the world, worsening climate shocks are rewriting people’s expectations for the future. The need to reach net zero and become more resilient is accepted almost everywhere and this means there is an economic race to get ahead of new extremes as well as an environmental and societal imperative. No one should be left behind. Countries can learn a lot from each other about climate preparedness and this index provides a helpful snapshot of where different countries stand. It will provide policymakers everywhere with insights on what’s working and what’s not.
Angela Francis, Director of Policy Solutions at WWF UK said: “Businesses and communities need a transformational shift to a nature-positive net zero economy, and Aviva’s Climate Ready Index shows action on the environment is mission critical for the finance sector. The UK should be the undoubted leader on climate change, with climate readiness the real key to our competitiveness, yet recent policies that increase fossil fuel extraction or remove environmental protections will only send the UK further down the leader board.”
The Climate-Ready Campaign:
- Aviva wants the UK to be the world’s most ‘climate-ready’ large economy by 2030.
- Being ‘climate-ready’ means reducing our carbon emissions to limit further damage to the climate and adapting how we live and work to protect ourselves from the negative effects of climate change, both at a local level and as part of the global community.
- Therefore we will track the progress the UK makes, alongside the other large economies in the G7 (plus Ireland as the only country with whom we share a land border) through our Climate-Ready Index.
- Over coming months and years, Aviva will announce a range of actions it will take and support it will give to help enable the UK to be more climate-ready – helping communities, our customers, other companies, and our country – as we seek to help make the UK the most climate-ready large economy by 2030.
The Climate-Ready Index:
The Index assesses how climate-ready a country is across four key areas:
- Emissions and Mitigations
- Environment and Adaptation
- Economy & Business
- Society and Community
Across the four pillars the Index tracks 11 measures on how each country is doing in areas such as reducing emissions, supporting biodiversity, building climate-resilient infrastructure, helping communities and small businesses prepare, and helping other countries in the world adapt.
Aviva’s Climate Commitments:
Earlier this year, Aviva pubished its climate transition plan on how it will reach net-zero carbon by 2040. The plan sets out how Aviva is setting Science-Based Targets aligned to a 1.5 degree pathway for its operations, supply chain and investments, and how its climate goals will be delivered in a way that contributes to tackling the related challenges on biodiversity and nature. By the end of 2025, Aviva will cut the carbon intensity of its investments by 25% and by end of 2030 by 60%. It also lays out its plans to achieve net-zero carbon emissions from its own operations and supply chain by 2030.
- At the end of this year Aviva will divest from companies which make more than 5% of their revenue from thermal coal, unless they have signed up to Science Based Targets.
- Last year, Aviva stopped underwriting insurance for new fossil fuel mining or extraction projects, and companies making more than 5% of their revenue from thermal coal or unconventional fossil fuels, unless they have signed up to Science Based Targets.
- Aviva has invested £7.6bn in green assets and of that £4bn in green assets since 2020.
- It provides investment and insurance products to support the transition – for example, low carbon transition funds, EV insurance and cover for renewable generation infrastructure.
- Carbon neutral since 2006, Aviva has reduced our own carbon emissions by 81% since 2010.
- Aviva has partnered with Enterprise Nation to help over 10,000 SMEs get more climate -ready and are in dialogue with SMEs about how we can do more.
*G7 Countries are Canada, France, Germany, Italy, Japan, United Kingdom, United States.
** Aviva Climate Readiness Attitudes Survey 2022 (SMEs) September 2022.
***Aviva commissioned YouGov to carry out a survey of business attitudes towards climate readiness among 253 business leaders working for SMEs in the UK. All fieldwork was carried out online between 26th – 28th September 2022.
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Notes to editors:
- We are one of the UK’s leading Insurance, Wealth & Retirement businesses 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.
- Aviva is a market leader in sustainability. In 2021, we announced our plan to become Net Zero by 2040, the first major insurance company in the world to do so. 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. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition and action at www.aviva.com/sustainability
- 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. More information can be found at www.aviva.com/sustainability/climate/
- 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 https://www.aviva.com/about-us/our-people/
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