Aviva's Shot Across The Bows Of High CO2 Emitters

 Interesting repost - via Energy in Demand but ultimately from the Times. At the moment Aviva's threat is to withdraw cover and divest from companies "not signing up to science-based targets". One wonders at what time they will change this to measures of actual performance. That will be the real test.

One of Britain’s biggest insurers lets corporate clients know they will lose cover if they fail to meet GHG emissions targets

 Rod Janssen

Aviva is the first global insurer and the first UK financial services company to set a target of reducing carbon emissions to net zero by 2040. Louisa Clarence-Smith discusses latest developments in an article on The Times website.

 

Aviva leads global insurers on climate change plan

One of Britain’s biggest insurers is putting companies worldwide on notice that it will divest any interests and refuse to provide cover if they fail to meet ambitious targets to reduce greenhouse gas emissions.

Aviva is the first global insurer and the first UK financial services company to set a target of reducing carbon emissions to net zero by 2040, a move that will ripple through its operations, supply chain and investments.

The insurer manages £300 billion of investments and has billions of pounds in FTSE 100 companies, including Royal Dutch Shell and BP. It said that it would divest from all companies making more than 5 per cent of their revenue from coal or unconventional fossil fuels by 2022, unless they had signed up to science-based targets in line with the Paris agreement to limit global warming to 1.5C.

By the end of this year, Aviva said, it will have stopped underwriting insurance for companies making more than 5 per cent of their revenue from such fuels unless they have signed up to science-based targets.

Aviva has committed to generating net zero carbon emissions from its own operations and supply chain by 2030. The move will involve procuring 100 per cent renewable electricity for its 2.5 million sq ft office portfolio. Its fleet of 1,540 cars used by employees will comprise electric or hybrid vehicles by 2025.

Amanda Blanc, 53, chief executive, said: “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.”

Aviva Investors, the group’s asset manager, said last month that it could ditch its stock and bond holdings in 30 of the world’s biggest corporate emitters of carbon if their boards failed to take sufficient action over climate change. It now expects the companies to commit to net zero carbon emissions by 2040, rather than 2050, with the target incorporated into their expenditure plans and aligned with management pay and goals.

Aviva expects emissions reductions to make up the vast majority of its shift to net zero. However, it also expects to need to offset emissions with other activities and has committed to investing an initial £100 million towards “nature-based solutions”.

The London-listed Aviva, a member of the FTSE 100 index, is due to announce its full-year results on Thursday. Analysts expect it to report a £2.8 billion operating profit, down from from a record £3.2 billion in 2019.