Aviva becomes the first major insurer worldwide to set Net Zero carbon by 2040 target

Aviva has become the first major insurance company globally to announce its plan to become a Net Zero carbon emissions company by 2040.

Amanda Blanc, Aviva Group Chief Executive Officer, has 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.”

Aviva’s 2040 Net Zero plan includes:

• Net Zero carbon emissions from its investments by 2040
• A clear pathway to Net Zero: a cut of 25% in the carbon intensity of its investments by 2025 and of 60% by 2030 – ahead of the 50% cut agreed by the Paris Agreement
• Net Zero carbon emissions from its own operations and supply chain by 2030

Aviva is setting out a clear pathway to achieve its goal, with immediate actions and targets for 2025, 2030 and 2040 which will be tracked through annual, public reporting. It will also sign up the internationally recognised Science Based Targets initiative, so its work can be validated.

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.”

Aviva also plans on increasing its green investments:

• By the end of 2022, Aviva expects to invest a further £10 billion of assets from its auto enrolment default funds and other policyholder funds into low carbon strategies (of which £5 billion has already been announced)
• By 2025, it will invest £6 billion in green assets, including £1.5 billion of policyholder monies into climate transition funds
• By 2025, Aviva investors will invest £2.5 billion in low carbon and renewable energy infrastructure and deliver £1 billion of carbon transition loans

It is critical for engaging companies to make the transition. In January 2021, Aviva Investors announces it is intensifying active ownership of investments through its ‘climate engagement escalation programme’. Starting with 30 important carbon emitters in the oil and gas, metals and mining, and utilities sectors, Aviva Investors is making specific asks of these companies, including to sign up to Science Based Targets which is aligned to the Paris Agreement, and setting fixed deadlines. If Aviva Investors do not see evidence of serious engagement with these companies to meet the climate challenge, it will put them on its stop-list and divest itself from any assets it holds.

Additionally, by the end of 2022, Aviva will divest from all companies which make more than 5% of their revenue from coal and by end of 2021, stop underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels, unless they have signed up to the Science Based Targets initiative.

Business and Energy Secretary Kwasi Kwarteng 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.”

Richard Curtis, co-founder at Make My Money Matter, said: “Now is the moment for the rest of the industry to step up and join the movement. The UK finance industry has the opportunity and responsibility to harness our economic system for the good of people and planet. They need to be the heroes of the hour. Aviva’s pledge should push others to outline their own ambitions to tackle the climate crisis head on and build a better world for our children.”