Aviva will become a net zero carbon emissions company by 2040, the multinational insurance firm has announced.
The ambitious target will inform every aspect of operations and investment decisions, and forms part of Aviva’s strategy to be the UK’s leading insurer, contributing to a sustainable economic recovery.
Its net zero plan will see a 25 percent reduction in the carbon intensity of Aviva’s investments by 2025 which will reach 60 percent by 2030. It will also aim to reach net zero carbon emissions from its own operations and supply chain by 2030.
The move will cover Aviva’s scope 1, 2 and 3 emissions, and include shareholder assets and policy holder assets where Aviva has decision-making control.
It will sign up to the internationally recognised Science Based Targets (SBTs) initiative to validate its work and will track its progress in meeting the set target through public reporting annually.
The company’s action on coal will be immediate and by the end of next year, it will divest from all firms which make more than five percent of their revenue from coal, unless they have signed up to the SBTs initiative. It has also pledged to stop underwriting insurance for such companies.
Aviva will also be the first insurer to put its Taskforce for Climate-related Financial Disclosure (TCFD) to an advisory vote at its Annual General Meeting of Shareholders this May.
Emissions reductions will make up the vast majority of Aviva’s shift towards net zero but in addition, it will invest in nature-based solutions and other options to do this, with a first step committing £100m to nature-based solutions by 2030.
Amanda Blanc, Aviva Group Chief Executive Officer, said: “Aviva is taking bold steps to help tackle the climate crisis. As the UK’s leading insurer, we have a huge responsibility to change the way we invest, insure and serve our customers. For the world to reach Net Zero, it’s going to take leadership and radical ambition. And it is going to take Aviva to play our part.”
Kwasi Kwarteng, Business and Energy Secretary said: “Businesses have a huge and vital role to play in tackling climate change. It is fantastic that Aviva is taking radical action across its business, which will help the UK eliminate its contribution to climate change and influence other businesses to move in the same direction.
“In order to reach our 2050 climate target, we must work with companies like Aviva to harness the strength of the UK’s world leading financial sector to unleash the private capital necessary to reduce carbon emissions and support new jobs as the UK builds back greener.”
Aviva’s strategies to reach net zero carbon emissions by 2040 includes increasing green investments (such as investing £2.5bn in low carbon and renewable energy infrastructure and investing £6bn in green assets).
It will also expand the main asset classes of its core markets (credit, equities, direct real estate and sovereign debt) and aims for 100 percent renewable electricity for all offices by 2030.
Last month, Aviva Investors announced its climate engagement escalation programme, starting with 30 systemically important carbon emitters in the oil and gas, metals and mining, and utilities sectors. It will ask them to sign up to Science Based Targets aligned to the Paris Agreement and set fixed deadlines of between 12 and 36 months. Failure to do this will see Aviva divesting from the assets.