Absolute Carbon Emissions
Absolute emissions are the total amount of greenhouse gas (GHG) emissions created in a set period of time. Emissions may be based on actual or estimated data and for financed emissions are attributed using an attribution factor.
Assets
Anything of value owned by a business that can be set against its liabilities. Assets are usually divided into four types: fixed assets (typically land, buildings and machines); current assets (cash, stock, investments, work in progress and payments owing); liquid assets (cash or funds held in a form that can be quickly converted into cash); and intangible assets (goodwill, trademarks, patents, etc).
Association of British Insurers and Independent Healthcare Providers Net Zero working group
A collaborative initiative aiming to align the insurance and healthcare sectors with net zero targets by developing strategies for carbon reduction and sustainable operations. It facilitates knowledge sharing, policy development, and industry-wide commitments to drive decarbonisation. The working group also engages with regulators and stakeholders to ensure the integration of sustainability in sectoral practices.
Aviva’s Sustainability Ambition
Sustainability is integral to how we do business at Aviva. The three elements of our strategic sustainability framework are closely interconnected:
- Social action – Help build stronger inclusive communities at the local level.
- Climate action – Mitigate and adapt to climate change and reverse nature loss.
- Sustainable business – We act to embed sustainability into the way we run our business.
Biodiversity
The variability among living organisms from all sources, including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems.
Blue Carbon
Carbon captured and stored in coastal and or marine ecosystems.
Carbon Credits
A carbon credit is a tradable unit that represents one metric tonne of avoided GHG emissions, reduced GHG emissions or GHG removed from the atmosphere.
Carbon Intensity
Carbon intensity is calculated by dividing absolute carbon emissions by an appropriate usage metric such as revenues, square footage of buildings, number of employees etc. Aviva uses the following intensity measures:
- Economic carbon intensity (ECI): the intensity of GHG emissions attributed to investments per £m invested. This measure is relevant for all asset classes.
- Weighted average carbon intensity (WACI) revenue: WACI is the weighted average of greenhouse gas emissions (tCO2e) of investee companies, divided by their revenue in USD millions. The weighting is based on each company’s investment weight percentage within the relevant portfolio.
- Real estate (Direct Real Estate & Commercial Mortgages) carbon intensity: greenhouse gas emissions attributed to real estate investments per metre square of attributed floor space.
Carbon neutral
The amount of carbon released is offset by a reduction in carbon emissions from an activity outside the company boundaries. These carbon savings come in the form of carbon credits that do not represent removals of carbon from the atmosphere, but instead emissions that have been reduced from a pre-project baseline.
Carbon reduction
The process of reducing carbon / greenhouse gas emissions through improving business processes. This is seen as essential step prior to the offsetting of residual emissions as it means that less carbon is generated, reducing the need to offset emissions.
Carbon removal
Human activities that remove CO2 from the atmosphere and durably store it in geological, terrestrial, or ocean reservoirs, or in products.
Circular economy
A model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended.
Climate Action 100+
Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
Climate Adaptation
Climate change adaptation is the process of altering behaviour, systems, and communities to protect the environment, society and the economy from the impacts of climate change.
Climate Bonds Initiative debt screening
An assessment framework to evaluate and certify debt instruments based on their alignment with climate objectives. The screening process ensures that investments contribute to a low-carbon and climate-resilient economy. It also helps investors identify credible green bonds and sustainable financing opportunities.
Climate Bonds Initiative Taxonomy and Sector Criteria
A classification system to determine which investments qualify as climate-aligned and contribute to a low-carbon economy. It sets out clear standards for labelling green bonds and investment products. The taxonomy ensures consistency and transparency in sustainable finance markets.
Climate Crisis
A global emergency driven by rising greenhouse gas emissions and environmental degradation, threatening ecosystems, economies, and human well-being. Addressing it requires an integrated transition to a low-carbon, climate-resilient, and nature-positive future.
Climate-related Financial Disclosure (CRFD)
The process of reporting climate risks and opportunities in financial disclosures to enhance transparency and inform decision-making for investors and stakeholders. It ensures companies assess and disclose material climate risks in line with regulatory and investor expectations.
Climate resilience
The capacity of social, economic and environmental systems to cope with a hazardous climate-related event, trend or disturbance, responding or reorganising in ways that maintain their essential function, identity and structure.
Climate scenario analysis
A strategic tool used to assess potential climate-related risks and opportunities under different future climate and policy scenarios. It helps organisations model various pathways and stress test their resilience to climate shocks. The insights gained can inform risk management, business strategy, and regulatory compliance.
Climate transition funds
Investment funds which aim to deliver growth by investing in companies that either aim to provide solutions to climate change or aim to orientate their business models to a low-carbon economy, while aiming to avoid the most carbon intense fossil fuel-based companies.
Climate Value-at-Risk (Climate VaR)
Aviva has developed a Climate VaR measure which enables assessment of the possible financial impacts of future climate-related risk and opportunities. The metric has been developed through an inter-disciplinary team which was created with representation from across the business. An expert panel reviews and challenges the main assumptions made in the selection, development and modelling of the financial impacts across scenarios.
Community investment
The gross monetary amount from Aviva Group in support of community organisations/projects/cause, including: Voluntary activities, beyond our core business activities and our legal obligations, that contribute to the economic, social and environmental sustainability of our communities. All charitable spend, management costs, value of gifts in kind and the cost of volunteering in alignment with the Business for societal impact (B4SI). B4SI benchmark is a framework used by corporates to calculate their community investment spending.
COP
Members of the United Nations Framework Convention on Climate Change (UNFCC) hold annual Conference of Parties. These are sometimes referred to as 'Climate COP'. The Paris Agreement was agreed at COP 21 (2015). COP 26 (2021) held in Glasgow, UK introduced a greater financial focus.
Members of the United Nations Convention on Biological Diversity (UN CBD) hold a Conference of the Parties every two years, sometimes referred to as 'Biodiversity COP'. The Kunming-Montreal Global Biodiversity Framework was agreed at COP15 (2022).
Dormant Assets
Funds held within financial services products which have not been accessed for a certain period of time, and attempts to trace their owners to reunite them with their money have been unsuccessful. Find out more about Aviva’s Dormant Assets scheme here.
Ecovadis score
A sustainability rating that evaluates companies on environmental, social, and governance (ESG) criteria, including climate impact and supply chain responsibility. Higher scores reflect stronger commitments to responsible business practices.
Emissions (carbon)
A type of carbon (such as carbon dioxide) released into the atmosphere, often through human activity such as the burning of fossil fuels such as coal or gas.
Emissions trading schemes
Market-based mechanisms that set a cap on emissions and allow companies to buy and sell allowances, incentivising reductions in greenhouse gas emissions. These schemes create financial incentives for emissions reductions while allowing flexibility for businesses.
Engage and divest
Engagement is where shareholders seek to influence firm behaviour through direct engagement, filing shareholder proposals and voting at AGMs. Divestment is where shareholders sell a firms’ shares, typically because engagement has failed to influence the firm’s behaviour or the firm does not meet the investor’s minimum ESG standards.
Environmental, Social, and Governance (ESG)
Environmental (e.g. pollution), Social (e.g. labour standards) and Governance (e.g. board diversity and accountability) are the three factors commonly used to measure the sustainability and social impact of a firm.
Ethical investments
Ethical investing refers to the practice of using one’s ethical principles as the primary filter for the selection of securities investing. Ethical investing depends on an investor’s views. Ethical investing gives the individual the power to allocate capital toward companies whose practices and values align with their personal beliefs. Choosing an investment based on ethical preferences is not indicative of the investment’s performance.
Electric Vehicles (EVs)
EVs are vehicles powered entirely or partially by electricity, reducing reliance on fossil fuels. They include battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), which use rechargeable batteries.
EV100
EV100 is a global initiative led by The Climate Group that brings together companies committed to accelerating the transition to electric vehicles. Member organisations pledge to switch their corporate fleets to EVs and install charging infrastructure by 2030.
Finance for Biodiversity Foundation Pledge
A group of financial institutions calling on global leaders to protect and restore biodiversity through their finance activities and investments.
Financed Emissions
The absolute greenhouse gas (GHG) emissions of assets, companies, countries and other investments attributed to Aviva as an investor in real assets (infrastructure, real estate), securities of governments, and the equity and debt of companies. The attribution factor used to calculate the proportionate share of emissions varies by asset class.
For example, for a listed company held by Aviva it is the amount invested as a percentage of a company's enterprise value, including cash (EVIC), and the financed emissions are calculated by multiplying this factor and the company's emissions.
Financial Sector Deforestation Action Initiative (FSDA)
A results-driven collaborative of financial institutions that unites members around a shared approach to tackling deforestation and creating essential cooperation across other climate and nature-related initiatives.
Good Business Charter
An accreditation which UK organisations can sign up to in recognition of 10 responsible business practices. All 10 commitments must be met to receive accreditation.
Greenhouse Gas Protocol
A comprehensive, global, standardised framework to measure and manage greenhouse gas emissions from private and public sector operations and climate change reduction activities.
Holistic Stewardship
In seeking to deliver long-term risk-adjusted returns for our clients, we believe in engaging with participants in different areas of the financial system to support the transition to a sustainable economy. Our engagement approach is carried out across six levels of influence, leveraging our agency and expertise to facilitate change. We call this multi-faceted approach to engagement 'holistic stewardship’.
IIGCC - The Institutional Investors Group on Climate Change
A global body for investor collaboration to support and enable the investment community in driving significant and real progress by 2030 towards a net zero and resilient future. To be achieved through capital allocation decisions, stewardship and successful engagement with companies, policy makers and fellow investors.
Impact Investing
Impact investments are investments made with the intention to generate positive, measurable social and/or environmental impact alongside a financial return.
Independent Assurance or Assurance
An independent review of sustainability metrics, claims or reports.
Inertial Trajectory
Inertial trajectory show the evolution of portfolio emissions if the company takes no additional climate action above and beyond considering public pledges from policyholders, investees and announced regulatory changes.
Intergovernmental Panel on Climate Change (IPCC)
This Is the United Nations body for assessing the science related to climate change.
Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES)
An independent intergovernmental body established to strengthen scientific policies for the conservation and sustainable use of biodiversity, human well-being and sustainable development.
International Sustainability Standards Board (ISSB)
As part of the wider IFRS Foundation, the ISSB is developing standards for a global baseline of sustainability disclosures. Focussing on sustainability-related risks and opportunities, the standards are designed to meet the needs of investors and to enable companies to provide comprehensive sustainability information to global capital markets.
Just Transition
'Just' Transition is 'the process of anticipating, assessing, and addressing the social risks and opportunities of the transition to a low-GHG emissions and climate-resilient development, as well as ensuring meaningful dialogue and participation for impacted groups (including workers, communities, supply chains, and consumers) in transition planning. For example, supporting the protection of the livelihoods of workers in carbon-intensive industries and activities as they get phased down or out.
Kunming-Montreal Global Biodiversity Framework (GBF)
The GBF is a landmark agreement adopted at the UN Biodiversity Conference (COP15) to address global biodiversity loss. The framework guides nations in implementing policies to restore ecosystems and promote sustainable development.
LEAP approach
The ‘LEAP’ approach (Locate, Evaluate, Assess, and Prepare) is a framework the TNFD developed to help organisations to assess nature-related financial risks. It helps businesses integrate biodiversity and environmental considerations into decision-making.
Low Carbon Economy
The OECD define a low-carbon economy (LCE) is an economy which absorbs as much greenhouse gas as it emits.
Low Carbon infrastructure
Infrastructure such as transport systems or buildings that produce lower carbon emissions than traditional infrastructure and uses renewable energy such as solar and wind.
Nationally Determined Contributions (NDCs)
NDCs are climate action plans submitted by countries under the Paris Agreement to reduce greenhouse gas emissions. They outline national targets, policies, and measures to combat climate change. These contributions are updated periodically to enhance global climate ambition.
Nature
The natural world, with an emphasis on the diversity of living organisms (including people) and their interactions among themselves and with their environment.
Nature-based Solutions
Actions to protect, conserve, restore, sustainably use and manage natural or modified terrestrial, freshwater, coastal and marine ecosystems that address societal, economic and environmental challenges effectively and adaptively, while simultaneously providing human well-being, ecosystem services, resilience and biodiversity benefits.
Adapted from International Union for Conservation of Nature (2020) The IUCN Global Standard for Nature-based Solutions.
Nature loss
The loss and/or decline of the state of nature. This includes, but is not limited to, the reduction of any aspect of biological diversity e.g., diversity at the genetic, species and ecosystem levels in a particular area through death (including extinction), destruction or manual removal. This term is often used interchangeably with “nature degradation”.
Nature positive
Nature Positive is a global societal goal defined as “halt and reverse nature Loss by 2030 on a 2020 baseline, and achieve full recovery by 2050”.
Nature-related opportunities
Activities that create positive outcomes for organisations and nature by creating positive impacts on nature or mitigating negative impacts on nature. These can occur when organisations avoid, reduce, mitigate or manage nature-related risks, or through the strategic transformation of business models, products, services, markets and investments that actively work to reverse the loss of nature.
Nature-related risks
Nature-related risks are potential threats (effects of uncertainty) posed to an organisation that arise from its and wider society’s dependencies and impacts on nature. These risks can be physical, transition or systemic.
Negative emissions technologies
Technologies that aim to remove carbon from the atmosphere e.g. machines that capture carbon dioxide from the air and sequester it.
Net Zero
The process of achieving net zero impact on the environment by balancing the amount of carbon emissions produced against schemes and projects that remove carbon from the atmosphere, such as nature-based solutions and or carbon offsetting.
Net Zero Asset Owner Alliance (NZAOA)
A United Nations convened group of institutional investors who are working together to aim to transition their investment portfolios to net-zero greenhouse gas emissions by 2050.
Oil Sands
Oil Sands (also known as Tar Sands) is viscous crude oil (or bitumen) and/or associated fossil fuel derivatives that are trapped in sandstone.
Operational carbon emissions
Operational carbon emissions includes emissions from a company’s buildings, business travel, water and waste to landfill as generated during the year.
Operational Scope 1 emissions
Scope 1 emissions cover operational emissions from owned sources. This includes natural gas, oil (diesel oil), company car mileage and fugitive emissions from air-conditioning.
Operational Scope 2 emissions
The total quantity of indirect GHG emissions from purchased energy. Scope 2 emissions cover emissions generated from the electricity used in all the buildings a company operates, as calculated by the location-based and market-based methodology.
Location based – Operational emissions from non-owned sources (i.e., power plants) using an average emissions intensity for the grids on which energy consumption occurs. This includes purchased electricity, municipal heating and cooling.
Market based – Operational emissions where we have contractual arrangements for renewable electricity, e.g. through on-site generation, certified renewable electricity through a supplier tariff or the separate purchase of renewable energy guarantees of origin (REGOs) or market equivalent, or consumed renewable heat or transport certified through a Government scheme.
Operational Scope 3 emissions
The total quantity of indirect emissions (not included in Scope 1 and Scope 2) that occur in the value chain including both upstream and downstream emissions (Scope 3). Operational Scope 3 emissions cover operational emissions from business travel (air, rail, grey fleet, and rental cars), water, waste, electricity transmission and distribution, and homeworking.
Paris Agreement target
This is a target set by the global Paris climate change deal in 2015 to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
Powering Past Coal Alliance
The UK and Canadian Government created a national commitment for countries to ‘Power Past Coal’ which was launched at the UN Climate Change Conference (COP23) in 2017. We were a founding member of the Financial Principles committing to cease supporting thermal coal power investments and underwriting by 2030.
Renewable Energy 100 (RE100)
RE100 is a global initiative where companies commit to sourcing 100% of their electricity from renewable sources. Led by The Climate Group and CDP, it promotes corporate leadership in clean energy transitions. RE100 members drive market demand for renewables, accelerating the shift from fossil fuels.
Science Based Targets Initiative (SBTi)
The Science Based Targets initiative (SBTi) is a corporate climate action organisation that enables companies and financial institutions worldwide to play their part in combating the climate crisis. They develop standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets.
Scope 1, Scope 2 and Scope 3 emissions
Greenhouse Gas (GHG) Emissions are split into Scope 1, 2 and 3 emissions. Scope 1 emissions are direct emissions from Aviva’s sources. Scope 2 emissions are indirect emissions released in production of energy used by Aviva. Scope 3 emissions reflect emissions from Aviva’s value chain.
Social infrastructure
The construction and maintenance of facilities that support social services such as healthcare (hospitals), education (schools and universities), public facilities (community housing and prisons) and transportation (railways and roads).
Social Transition Global Equity Fund
Investment fund which aims to deliver long-term capital growth by investing in companies globally that either provide solutions to social inequality or are transitioning their business models to manage their social impact, while avoiding those that do not meet minimum social criteria.
Stewardship
The UK Stewardship Code 2020 defines stewardship as “the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.” Aviva UK Insurance, Wealth and Retirement business published a stewardship statement which takes into account the 12 principles of the FRC Stewardship Code.
Sustainability
All activity that can be considered as taking account of profit, people and the planet (also known as the ‘triple bottom line’). A more formal definition is “meeting the needs of the present without compromising the ability of future generations to meet their needs”.
Sustainability Accounting Standards Board (SASB)
An ESG guidance framework that sets standards for companies to report against industry specific guidance for financially material sustainability information. SASB was consolidated into ISSB in 2022.
Sustainable Bonds
Bonds are issues where proceeds are used to finance or re-finance a combination of green and social projects or activities.
Sustainable Debt
Debt instruments that fund sustainable or sustainability-linked companies, projects or activities. This is often abbreviated to ‘GSS+’ standing for Green, Sustainability, Sustainability-Linked’ and can include: green bonds and loans, social bonds, sustainability bonds and loans and sustainability-linked bonds and loans.
Sustainable Development Goals (SDGs)
These are 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all”. They were set in 2015 by the United Nations and are meant to be achieved by 2030. Many firms use them to orient their sustainability action.
Sustainable impact and Net Zero aligned funds
Net Zero aligned funds are investments that are aligned with Net-Zero emissions by 2050 or sooner. Sustainable impact funds are broader and are investments that aim to deliver positive ESG outcomes.
Sustainable Investment Principles
Sustainable Investment Principles guide investors in incorporating ESG factors into their decision-making. They promote responsible capital allocation to achieve long-term sustainability goals. These principles align financial performance with positive societal and environmental impacts.
Systemic risk
Systemic risk refers to the potential collapse of an entire financial system or market due to interconnected vulnerabilities. It arises when disruptions in one sector trigger widespread economic consequences.
Task Force on Nature-related Financial Disclosures (TNFD)
The TNFD is a market-led, science-based and government-supported global initiative. It has developed a set of disclosure recommendations and guidance that seek to encourage and enable business and finance to assess, report and act on their nature-related dependencies, impacts, risks and opportunities.
Technology-based carbon removals
Technology-based carbon removals use engineered solutions, such as direct air capture and carbon storage, to extract CO₂ from the atmosphere.
Temperature Alignment
Temperature alignment is used to assess our alignment with the Paris Agreement target of holding the increase in the global average temperature to well below 2°C above pre-industrial levels, pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
Transition Finance Market Review
The Transition Finance Market Review assesses financial mechanisms that support the shift to a low-carbon economy within the UK, evaluating investment trends, policy frameworks, and corporate transition strategies.
Transition Pathway Initiative
An independent, authoritative source of research and data into the progress being made by the financial and corporate world in making the transition to a low-carbon economy.
Transition plan
A transition plan sets out how an organisation will aim to transition its business to the low carbon economy, aiming to align its operations, assets, portfolio, and business model to meet Net Zero.
UK Green Taxonomy
A framework drawn up by the UK Government which sets out the criteria which specific economic activities must meet to be considered environmentally sustainable.
UK National Wealth Fund Taskforce
This Taskforce oversees investment strategies to build national wealth while advancing sustainability. It focuses on funding projects that drive economic growth, innovation, and green transitions.
UK Transition Plan Taskforce (TPT)
The TPT has developed guidance for companies to create credible transition plans toward net-zero emissions.
Underwriting
The process of selecting which risks an insurance company can cover and deciding the premiums and terms of acceptance. On the stock exchange, an arrangement by which a company is guaranteed that an issue of shares will raise a given amount of money, because the underwriters promise to buy any of the issue not taken up by the public.
UN Forum for Insurance Transition to Net Zero (FIT)
The FIT supports the insurance sector in adopting net-zero policies and practices. It facilitates collaboration among insurers to manage climate-related risks.
United Nations Convention on Biological Diversity (UNCBD)
UNCBD is an international treaty aimed at conserving biodiversity and promoting sustainable use of natural resources, setting global targets for protecting ecosystems and genetic diversity.
United Nations Framework Convention on Climate Change (UNFCCC)
The UNFCCC is an international treaty that guides global efforts to combat climate change.
United Nations Global Compact
The United Nations Global Compact is a voluntary initiative that encourages businesses worldwide to adopt sustainable and socially responsible policies.
Vector-borne diseases
Vector-borne diseases are human illnesses caused by parasites, viruses and bacteria that are transmitted by vectors.
Water Stewardship Programme
A Water Stewardship Programme promotes responsible water use by businesses, communities, and governments, aiming to protect freshwater resources.
Wildfowl and Wetlands Trust
The Wildfowl and Wetlands Trust is a UK-based conservation organisation dedicated to protecting wetlands and the wildlife that depend on them. It manages nature reserves, conducts research.
Woodland Carbon Code
The Woodland Carbon Code (WCC) is the quality assurance standard for woodland creation projects in the UK, and generates high integrity, independently verified carbon units. Backed by the Government, the forest industry and carbon market experts.
World Wildlife Fund (WWF)
The World Wildlife Fund is one of the world’s leading conservation organisations, working to protect nature and combat climate change. It focuses on preserving biodiversity, reducing ecological footprints, and promoting sustainable development.