What are the Aviva Stewardship Funds?
Launched in 1984, the Stewardship Funds have a proud history as the first ethical funds of their kind in the UK. The funds have been reviewed regularly since then to ensure they remain suitable for the changing investment landscape.
The approach used in the funds is aligned with Aviva Investors' three sustainability pillars — Climate, Earth, and People. Each pillar is underpinned by Aviva Investors' investment themes. These pillars and themes reflect what we believe to be the most important sustainability issues of our time. They are rooted in the UN's 17 Sustainable Development Goals (SDGs), which offer a global view of the world’s most pressing challenges and what “sustainable” investing looks like.
The Climate, Earth and People pillars serve as the foundation for how Aviva Investors assesses which companies are suitable for investment in the Stewardship Funds.
There's five Stewardship Funds, covering international company shares, UK company shares and bonds.
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Strict exclusion criteria
The Stewardship funds exclude companies that could be deemed harmful to the world and its people. Please see the Stewardship Philosophy below for details of exclusions from the Funds and the criteria.
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Investing in businesses with sustainable practices
Companies are assessed for investment by a review of their products and services and operations. This review helps the team identify companies that either generate revenue from sustainable products and services or operate in an environmentally and socially responsible manner.
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Strength in numbers
Aviva Investors work with businesses, other financial companies, governments and non-profit organisations (NGOs) to push for better business practices.
Remember the value of your investments can always go down as well as up, so there’s a chance you’ll get back less than what you originally paid in.
The Stewardship Philosophy
We describe the three stages of the Stewardship philosophy below:
1. Avoid significant harm
The philosophy behind the Stewardship Funds has always been, and remains, to guide capital allocation responsibly, and therefore to exclude or to include companies in the Funds based on what they do and how they do it.
The guiding sustainability principles of the Stewardship Funds are to:
- Avoid companies that do not meet certain ethical standards, or that harm society or the environment.
- Support companies that make a positive contribution through investment.
- Encourage leading business practices.
Exclusion screens are applied to the Stewardship Funds. The screens enable the team to exclude businesses and industries from the Funds that could be deemed harmful and which are therefore not aligned with our sustainability approach and the Stewardship Philosophy. You can explore the details of this criteria in the Stewardship Philosophy document.
2. Investment framework
After excluding companies from the investment universe, the team carries out a detailed qualitative review of a company. The aim is to check that a business is contributing to at least one of Aviva Investors' sustainability pillars - Earth, Climate and People, and is therefore suitable for investment.
To identify companies that either generate revenue from sustainable products and services or operate in an environmentally and socially responsible manner, companies are assessed though two lenses – products or services and operations.
- Products or Services: A company’s revenue is analysed to see how much is derived from products or services that contribute to one or more of the sustainability pillars – Climate, Earth and People.
- Operations: this involves an assessment of how sustainably a company runs it business and therefore how it manages its operations. The following factors are reviewed: governance commitments, policies, and actions the company takes to address environmental and social issues, as well as how its performance compares to peers. This allows for an understanding of how well the company contributes to one or more of the Climate, Earth and People pillars.
In addition, there must be no evidence which suggests that a company is involved in serious controversies related to the environment, human rights, or labour-related issues. If any concerns are identified, the company may still be considered for investment if there is credible evidence that these issues are either not material or are being effectively addressed.
A company may qualify for investment if it contributes to the sustainability pillars – Climate, Earth, or People – either through the products and services it provides, or through the way it operates, and by extension supports the related UN SDGs.
The fixed income sleeves of the Stewardship Range also invest in bonds recognised by the Climate Bonds Initiative (CBI) as "Green," "Social," or "Sustainability" bonds. These bonds support projects that have positive environmental and social impacts.
The CBI is a global organisation that helps direct investments towards climate-friendly and sustainable projects by identifying eligible assets and activities. Each bond in the CBI database meets specific criteria and has been thoroughly assessed. For more details on our commitment to sustainability, please refer to our prospectus here.
3. Engagment and monitoring
The team works closely with companies to help them improve their sustainable business practices.
We explain this below:
The Stewardship Funds are monitored against non-financial targets such as their carbon intensity and the % of businesses in the Funds with a plan to reduce their carbon emissions. The alignment of the Funds with the UN's SDGs is also monitored.
The Stewardship Philosophy and investment policies
Discover the philosophy behind the Stewardship range of funds, how the funds are managed and how you can invest, by downloading the full guide.
Your choice of Stewardship Funds
Below we show the full list of Stewardship Funds available to invest in.
- Stewardship UK Equity
- Stewardship UK Equity Income
- Stewardship Managed
- Stewardship International Equity
- Stewardship Bond
- MyM Stewardship UK Equity
- MyM Stewardship UK Equity Income
- MyM Stewardship Managed
- MyM Stewardship International Equity
- MyM Stewardship Bond
- Stewardship UK Equity S6
- Stewardship UK Equity Income S6
- Stewardship Managed S6
- Stewardship International Equity S6
- Stewardship Bond S6
Stewardship Default Investment Programme
For pension customers who don't want to choose their own funds, we've created the Stewardship default investment programme. In this programme, customer money will be invested in the Stewardship International Equity, Stewardship Managed and Stewardship Bond Funds. We created this investment programme in 2019 to enable our customers to invest in the Stewardship Funds throughout their journey to retirement.
If you have a pension with Aviva and would like to find out more about which funds might be available, have a chat with us.
Take the next step with Stewardship
You can choose to invest in Stewardship Funds with some of our pensions. You can view the latest information on available funds in our Fund Centre.
If you’re a group pension scheme member you can check your Stewardship Fund options there.
If you're unsure about where to start, you might find it useful to speak to an independent financial adviser. They can give you more tailored advice that is based on your situation.
You can get tailored financial advice from one of our advisers or find an independent financial adviser on Unbiased. Remember you might be charged for any financial advice you receive.
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