Our investment approach.
Aviva Investors is our global asset management company, with £331 billion (as at 31 December 2018) assets under management in equities, fixed income, property and multi-asset.
Building on Aviva Investors’ 40-year heritage in responsible investment, in 2018 we have continued to:
- Enhance the way we integrate environmental, social and governance (ESG) considerations into our investment decisions.
- Act as responsible stewards of our investments, through our annual general meeting (AGM) voting and engagement activities.
- Use our influence and experience to drive sustainable market-wide capital markets reform.
Integrating ESG considerations into our decisions
We work together with fund managers and analysts, customising ESG integration for each investment process, to deliver better investment outcomes for our clients.
We incorporate ESG issues into our investment analysis and decision-making because we believe it delivers better investment outcomes for our clients, society and the environment.
In particular, Aviva Investors’ Global Responsible Investment Team (GRI Team) is a key component in building Aviva Investors’ House View, which cascades back through the organisation and helps guide medium- to long-term investment positions.
The GRI team make sure material ESG factors, such as global climate negotiations and social trends in urbanisation, are considered when determining the firm-wide macro outlook.
As long-term investors, we see factors such as corporate culture, good governance, climate change strategy, and employee and market place attitudes as core to the success of our investments.
We were also one of the first large asset managers to make the integration of ESG factors part of the pay criteria for investment employees. Through our Global Reward Framework, all investment employees should support responsible investment and integrate ESG issues into their investment processes.
At its simplest, stewardship means taking responsibility for something entrusted into our care.
To us, it means monitoring, engaging, and where appropriate, intervening, on matters that can have a material impact on the long-term value of our investments. Matters such as board diversity, human rights abuses and greenhouse gas emissions.
In practice, this means challenging companies we invest in on topics as varied as their use of antibiotics in industrial agriculture to exercising our rights as shareholders to push back mining in UNESCO World Heritage Sites.
In 2018 we engaged on 2,938 occasions with companies and voted on 54,335 resolutions at 4,713 shareholder meetings as part of our stewardship responsibilities.
We also co-signed approximately 1,960 letters relating to climate change, sustainable forestry, water treatment & conservation, human rights, quality of life, supply chain labour standards, modern day slavery and diversity.
Aviva Investors is a founding signatory to the UN Principles for Responsible Investment. We maintained our ranking of A+ in their 2018 assessment.
Advocating for sustainability
To us, being a responsible investor means recognising that sometimes it’s not enough to just engage with a company.
We operate in a market that’s imperfect and full of failures. All too often the true cost of running a business, such as emitting carbon, is not something the company has to pay for themselves. Policy makers and regulators can play a critical role in defining the framework within which companies and investors operate.
We’re proud to have led and worked on several reforms and initiatives at a local, national and international level to create sustainable financial markets.
In January 2018, the final report by the EU High-Level Expert Group on Sustainable Finance (HLEG) was delivered, with its recommendations now a shared responsibility of government, business and civil society alike. Our Chief Responsible Investment Officer, Steve Waygood, was a member of this group tasked with advising the European Commission.
Many key recommendations of the HLEG, including those relating to investor duties, climate-related disclosure and prudential regulation, now feature in an Action Plan on Sustainable Finance published by the European Commission in March 2018.
We are proud of the role we have played in pushing for a more sustainable EU financial system and look forward to aiding the further development and promotion of agreed solutions in the markets and regions in which we operate.
The World Benchmarking Alliance
In September 2018, we launched the World Benchmarking Alliance (WBA) as a founding partner with the Index Initiative and the UN Foundation at the UN General Assembly.
The initiative, also funded by the UK, Dutch and Danish governments, will publish free and transparent benchmarks to the public which rank companies on their contributions towards achieving the UN Sustainable Development Goals (SDGs).
At a time of increasing focus on the role of the private sector in helping to drive greater levels of sustainability, equality and prosperity in society, the WBA will increase transparency and accountability for businesses in relation to the SDGs.
It aims to empower consumers, investors, governments and civil society organisations by providing them with free and publicly available data that shows a company’s SDG performance, which they can use when deciding where to spend their money, allocate their investments or direct their policy and advocacy efforts.
Protecting UNESCO World Heritage sites
Aviva Investors is working towards steering the oil industry away from marine life in World Heritage sites. Following a number of successful engagements on this topic, including SOCO International and BP, we helped to launch a collaborative project to call on extractive companies to make ‘no go’ commitments in World Heritage sites
Fighting antibiotic resistance
Our responsible investment priorities mean we want to tackle Anti Microbial Resistance (AMR). We use our role as responsible shareholders to engage our investee companies, predominantly in the pharmaceutical and food sectors, to develop a robust policy on AMR and phase out of antibiotic use across their supply chains.