With four months until COP28, partner organizations of the Mangrove Breakthrough recently met to accelerate efforts to unlock $4 billion USD in funding and secure the future of 15 million hectares of mangrove forests by 2030.
Aviva’s biodiversity efforts continue with £38m pledge to restore lost UK rainforests
In recent years, the urgency of addressing the global environmental crisis has become increasingly clear. As the impact of climate change and biodiversity loss intensifies, businesses and investors are facing growing pressure to take action to protect the planet.
Aviva, the UK’s largest insurance company, has emerged as a leader in this space, demonstrating a strong commitment to addressing environmental issues, particularly deforestation and biodiversity loss. To help the company achieve its commitments to environmental protection and through its Race to Zero membership, Aviva follows the 5Ps framework: Pledge, Plan, Proceed, Publish and Persuade. Here’s how the criteria are helping the company play its part in creating a net zero and nature positive world.
In November 2021, Aviva joined forces with 29 other investors worldwide to sign a pledge to eliminate agricultural commodity-driven deforestation from its portfolio by 2025. Through its involvement in the Financial Sector Deforestation Action (FSDA), Aviva is leading engagements with 5 companies and 5 financial institutions on deforestation risk and is supporting additional engagements alongside other investors. In 2022 the company has also strengthened its voting policy to make deforestation a more formal element, and published a Biodiversity Policy in 2021 outlining its commitments to help reverse biodiversity loss by 2030.
In March 2022, Aviva announced its Net Zero Ambition to support the transition to a low-carbon economy, working with the insurance industry to create new methodologies, engaging with clients to develop and implement transition plans, and supporting decarbonisation through investments and insurance activities.
As part of this commitment, Aviva has developed its initial Climate Transition Plan in line with TCFD, GFANZ, and IIGCC principles and in anticipation of forthcoming UK regulation on Transition Plans and the UK Green Finance Roadmap. The UK government established the Transition Plan Taskforce (TPT) in April 2022 to develop the gold standard for private sector climate transition plans in the UK, and Aviva and WWF were invited to join as a result of their advocacy for nature-based solutions to protect and restore biodiversity and mitigate climate change. Aviva and WWF have also produced four policy papers calling for a transformational shift in the financial sector to meet global commitments under the Paris Agreement.
Aviva’s commitment to achieving net zero by 2040 has led to an initial £100 million in funding for nature-based carbon removals by 2030. Partnering with several leading conservation groups and charities in the UK, Ireland, and Canada, Aviva’s efforts will focus on carbon removal as its primary goal and aims to support biodiversity and habitat benefits where possible.
In October 2022, the company signed off on its first project, the Natural Capital Partnership agreement with The Nature Trust in Ireland, where efforts will be focused on native afforestation. In February 2023, Aviva provided a £38 million donation to help restore Britain’s lost temperate rainforests in the UK, partnering with The Wildlife Trusts. The project aims to re-establish temperate rainforest by planting a combination of native tree species across an area equivalent to around 5,200 acres. Additionally, Aviva has provided a £10 million donation to the Woodland Trust to support its Woodland Carbon Scheme, aiming to deliver carbon removal, boost air quality, and improve biodiversity through woodland creation and peat restoration.
In December 2022, Aviva published its first Biodiversity report detailing progress one year on since releasing its Biodiversity Policy in 2021. The report highlights key achievements made across investment, underwriting, partnerships, communities and risk assessments. With the latter, Aviva published an assessment of deforestation risk across its investment and underwriting portfolios. Earlier this year Aviva has published its Sustainability Report providing a summary of Aviva’s Sustainability Ambition and ESG performance and Aviva Investors has published its Responsible Investment Review detailing activities on ESG activities within investment. Later this year Aviva will publish a biodiversity impact assessment across its investment and underwriting portfolios.
In 2021, Aviva became the first UK insurer to commit to the Finance for Biodiversity Pledge and launched a Biodiversity Policy outlining its principles for decision-making. The company has made progress in its deforestation risk assessment, launched a biodiversity-themed global equity fund, and engaged with various companies on plastic waste, hazardous chemicals, and more.
The company’s efforts have been recognised by The WBA’s Financial System Benchmark, which rated Aviva second out of 400 financial services companies globally in areas such as governance, strategy, and respect for planetary boundaries. In 2023 ShareAction released their Point of No Returns 2023 report and ranked Aviva Investors third out of 77 of the world’s largest asset managers approaches to responsible investment.
Aviva’s commitment to environmental stewardship extends to its annual priorities for engagement with over 1,500 companies across 30 countries. The company’s Asset Management CEO wrote to all these companies to outline Aviva Investor’s priorities for 2023, which were addressing the cost-of-living crisis, transitioning to a low-carbon economy, and reversing nature loss. Aviva Investors expects all companies to begin reporting within a reasonable timeframe against the Taskforce on Nature-related Financial Disclosures (TNFD) framework, due to be finalised in 2023. In preparation for reporting against the framework, companies should undertake the TNFD recommended business model assessment process, referred to as LEAP. This will enable organisations to integrate nature into their decision-making. The latter is particularly important in light of the Post-2020 Global Biodiversity Framework agreed at COP15, where target 15 focusses on companies assessing, monitoring and disclosing impacts and dependencies on nature and where new targets and goals for conserving at least 30 per cent of global land and oceans by 2030 was outlined.
Aviva Investors strengthened its voting policy in 2022 by making deforestation a more formal element. The asset manager now votes against targeted management resolutions at companies with significant exposure to commodity-driven deforestation risk over their lack of robust policies and targets on reducing deforestation. In particular, the poorest performers identified in Global Canopy’s Forest 500 ranking of companies exposed to forest-risk commodities (beef and leather, soy, palm oil, timber and pulp and paper) in their supply chain. Agricultural conversion for these commodities drives over two-thirds of tropical deforestation. In 2022 Aviva Investors voted against 83 companies for weak deforestation policies.
Aviva’s commitment to reducing carbon emissions in its investments has yielded impressive results. By the end of 2022, the company surpassed its target to reduce the carbon intensity of its credit and equity investments, achieving a 39% reduction against its 2019 baseline.
Aviva invested £10 bn of auto-enrolment assets into low carbon strategies and £5.1bn in sustainable assets, including the construction of a net zero carbon school. Additionally, Aviva invested £1.5bn of policyholder money into climate transition funds, exceeding its target two years early. Aviva Investors also invested £2.1 billion in low-carbon and renewable energy infrastructure and exceeded the £1 bn sustainable transition loans target in 2022, achieving £1.1bn. Furthermore, 22% of new savings were put into sustainable impact funds or net zero aligned funds by 2022.
Guided by the 5Ps framework, Aviva’s efforts have led to significant investments in nature-based solutions, carbon removal, and sustainable assets. Aviva’s progress has been recognised globally, and the company is continuing to advocate for change, engage with companies, and establish supportive regulatory regimes to protect and restore biodiversity and mitigate climate change.
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