04 Mar Aviva announces net zero carbon targets for 2040
Asset Manager Aviva has instructed 30 of the biggest carbon dioxide emitters in its portfolio to introduce net-zero goals.
Aviva is the first leading global insurer to announce a target to reduce its carbon footprint to net-zero by 2040, a decade earlier than most other banks. Representing one of the UK’s largest asset management firms with £300 billion of investments stated that it had instructed 30 of the biggest carbon dioxide emitters in its portfolio requesting they commit to the targets aligned in the Paris climate agreement and implement net-zero emissions goals with fixed deadlines. Their portfolio includes some of the leading oil and gas, utilities and mining businesses.
Aviva explained that if these businesses show no signs of action they would be forced to sell their shareholdings with these associated companies. Aviva has emphasises that overall they have had a positive response to the new plan and intends to report on progress towards their targets each year.
Aviva has implemented temporary targets, with a 25% reduction in emissions from its investments by 2025 and a 60% reduction by 2030. The business intends to reduce CO2 emissions from its operations and supply chain to net-zero by 2030, a similar level announced by competing for business Legal and General. Aviva has also announced plans to invest £6 billion in green assets by 2025.
Aviva plans to take more decisive action on the coal industry. By the end of next year, the business will divest from all businesses that make over 5% of their revenue from coal, unless they commit to the science-based targets. Aviva also intends to halt underwriting insurance for all these associated companies by the end of this year. In the last few years, Aviva has been criticised for being one of the main investors in the coal industry in Poland, regarded as one of the most polluting across Europe.
Chief executive Amanda Blanc explains that Aviva has taken big steps in working towards the climate challenge. Being the UK’s leading insurer, Blanc highlights that they have had a massive responsibility in altering the way we invest, insure and look after their customers.
Lindsay Keenan, the European Coordinator of climate campaign organisation Insure Our Future stated that divestments from the coal industry was a positive move but stressed that businesses like Aviva should be divesting from all coal, oil and gas businesses which continue to develop and plan new fossil fuel expansion projects. Keenan believes that Aviva should make it clear that they will not support or insure any new fossil fuel projects and implement a transparent process to monitor progress.
Campaign group ShareAction explained that while pension funds had made more ambitious commitments in terms of targets, all large insurers, banks and asset managers were working towards 2050, focusing on sustainable coalitions. Wolfgang Kuhn, the director of financial strategies at ShareAction believes that Aviva’s announcement disrupts the general feeling that 2050 is the accepted deadline to solve the climate crisis. Kuhn believes that Aviva has made it clear that quicker, decisive action is critical and realistic.
Kwasi Kwarteng, business and energy secretary states that businesses play a vital role in tackling climate change. Kwarteng believes that to be capable of reaching our 2050 climate target, we will need to collaborate with companies like Aviva to harness the ability of the financial sector in the UK and harness the private capital required to reduce emissions, support new job development and build back greener.