Environmental, Social, and Governance (ESG)

Our approach to responsible investing

With you today, for a better tomorrow

Responsible investment, and caring for the world around us, is not a fad at Aviva. It’s something we’ve been doing for a long time – whether that be as an insurer, as one of the UK's largest financial companies, as an investor or as an employer.

Our achievements in this space reflect our ongoing commitment to investing responsibly. Helping create a better world for our customers, our families and communities in the UK and around the world is part of our lifeblood, part of Aviva’s history and something that we believe should be part of our future.

Aviva has been around for 320 years, taking care of people’s finances and helping people recover from crises. We believe that our 'care more' approach matters more than ever as we face the challenge of climate change, improving how companies operate and treat their staff and an ever-changing global environment, as we have seen since the outbreak of the Covid-19 crisis in March 2020.

ESG, which stands for Environmental, Social and Governance factors, is perhaps better termed 'responsible investment', and it used to describe three key factors that the fund managers, which manage our customers' savings on your behalf, look to assess how businesses behave and treat their employees, and their customers, and the world in which they operate.

Environmental

Concerns about companies' impact on the natural environment, such as climate change, biodiversity, carbon emissions, air and water pollution.

Social

Looks at the impact of company actions on society and communities, including human rights, health and safety issues, labour standards, product liability, privacy and data security.

Governance

Focuses on how companies are governed, including diversity, transparency, ownership, board independence, ethics and executive compensation.

Why Aviva?

We are committed to investing responsibly, with Environmental, Social and Governance (ESG) considerations a central pillar of our investment process. We believe this minimises risk and allows us to spot opportunities for our customers, empowering them to make more informed decisions and have a sense of purpose.

We believe that being a responsible investor can lead to better performance overall for our funds and therefore our customers.

Our achievements

  • We’ve been a leader of responsible investment for nearly 40 years.
  • Aviva Investors was among the first asset managers to publish a Corporate Governance voting policy in 1994.
  • Aviva was the first carbon-neutral international insurer in 2006.

We were awarded the UN Momentum for Change Award in 2017 for our commitment to reducing our environmental impact, and for helping to write the world’s first corporate governance code and the UN Principles for Responsible Investment.

1970 - 1999

1970

  • Voting at company meetings

1994

  • Among first asset managers to publish Corporate Governance Voting Policy

1995

  • Pledge at the UN summit to ‘balance of economic development, the welfare of people and a sound environment, by incorporating these considerations into business activities’

2000 - 2009

2001

  • Founding signatory and first asset manager to formally integrate corporate responsibility to voting policy

2006

  • Founding signatory of the Principles for Responsible Investment

2007

  • Founding signatory of Climate Wise

2010 - 2015

2010

  • In vanguard of signing the UK Stewardship Code

2012

  • Founded Corporate Sustainability Reporting Coalition with call to action at Rio+20 Conference

2014

  • Launched Roadmap for Sustainable Capital Markets & Sustainable Capital Markets Manifesto

2015

  • CEO speaks at UN General
  • Assembly on Sustainable Finance
  • Strategic Response to Climate Change published and actively participated in COP21

2016 - 2019

2016

  • Asked to join European Commission's High Level Expert Group on Sustainable Finance

2016

  • Asked to join European Commission's High Level Expert Group on Sustainable Finance

2017

  • Corporate Human Rights Benchmark launched at Aviva’s offices
  • Responsible Investor Award for Innovation & 

2018

  • UN award for sustainability work
  • The World Benchmark Alliance is launched

2019

  • ESG Manager of the Year, Global Investor Group Investment Excellence Awards
  • Stewardship Disclosure (Asset Manager) award category at the ICGN Global Stewardship Awards 

What does this mean for workplace pensions?

Strength in numbers

Your employees will automatically become investors in businesses both in the UK and overseas when they are invested in a default fund.  This means that if responsible investment is integrated throughout the default, or if there are dedicated ESG funds that they can choose from in the self-select range, there is a real opportunity with your employees' pension contributions and their investments, to bring about positive change in the many businesses they are invested in.  Responsible investment is integrated across all of our default funds, and we also offer the Stewardship lifestyle default. Please see below for more information.

We believe that investing in funds where the fund manager engages with businesses to create positive change is key. In this way, you and your employees' savings can help ensure companies are aware of their risks, such as  how they treat their staff or the risks in their supply chain. We hope that this will encourage your employees to take steps to make the world a better place for themselves, their families and for future generations.

Responsibility built in

With Aviva you can be reassured that ESG factors have been considered across all our default funds.  Responsible investment is integrated across My Future Focus, our default fund, which uses regional tilts to focus on companies that score more highly in ESG terms.  Our My Future default solution invests in the BlackRock World ESG Insights Equity strategy. This strategy has been designed in conjunction with BlackRock, who will manage the strategy and who also oversee the asset allocation of My Future.  We also offer the Stewardship lifestyle default, the first lifestyle default of its kind, which enables customers to invest responsibly throughout their retirement journey.

Long-term performance

Financial performance is still our number one consideration – in our Stewardship, My Future and My Future Focus funds.  We believe investing responsibly or helping firms become better businesses can lead to better financial performance over the long term.

Investment solutions

Aviva offers a range of investment solutions for your occupational pension scheme, you can view our investment proposition guide (PDF 691KB)

Want to find out more about ethical investing? Read our article on investing sustainably through your pension.

Our investment approach

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.

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.

Active stewardship

We want to invest in a way that seeks a good return for our savers and helps create the kind of future they wish to retire into.

Responsible investment is all about encouraging the companies we invest in to take a longer-term view and consider the impact their business decisions might have on the environment and local communities.

We use our influence to encourage other businesses to implement responsible business practices and engage with them on issues such as diversity and climate change.

We encourage change not just among the companies we invest in, but in our industry and economy as a whole.

Managing environmental impacts

Acting now for a better tomorrow matters to our business, our customers, our partners and the communities in which we operate. So, we’re radically reducing the environmental impact of our global business.

We are investing heavily in energy efficiency, generating our own renewable electricity, removing plastic, sending zero waste to landfill and are managing the impacts of our people and operations by carbon offsetting.

Beyond our operational impacts:

  • We’re reducing the environmental impact of our propositions and claims processes.
  • We’re leading the way and influencing other companies to tackle climate change now.

Building resilient communities

We exist to help our customers today, for a better tomorrow. And we have a duty to be a good corporate citizen by helping build strong and resilient communities wherever we operate.

Community investment – in 2020 we invested £43 million to charitable partners in our global markets to support customers and communities to face the impact of the COVID-19 pandemic. 

We committed £11.5 million to other local projects, making total community investment £54.5 million in 2020. Overall, this has helped 5.1 million people around the world.

Our strategic partnership with the British Red Cross – since 2016, we’ve worked together to build community resilience. We’re proud to say that in that time, 3,600 of our people have volunteered their time and expertise to support the Red Cross movement. In 2020, Aviva pledged an extra £10m to support their vital work in response to the coronavirus crisis.

Corporate governance

As a long-term investor, we are convinced that the investments we make on our clients’ behalf will be more successful if we understand how the companies and projects we invest in perform on issues like board diversity, governance, climate change and labour relations.

Engagement is a vital part of our investment process across a range of asset classes. We use our influence through engagement and voting to promote sustainable business practices, gain insight and reduce investment risk. And we’re not afraid to call out bad performance.

Business perspectives

Expert business insight and analysis