LONDON: Aviva Plc says it will eliminate carbon emissions across all its activities by 2040, the first insurer to make such a commitment.
The UK company said in a statement that it aims to cut the net emissions from its operations and supply chain to zero by 2030 and achieve the same for its investments within 10 additional years.
Aviva, which manages £522bil (US$729bil) of assets, will report annually on its progress and also announced a series of interim targets, including an ambition to reduce the carbon intensity of its investments by 60% by 2030.
Banks, insurers and other financial-services firms are under growing pressure to demonstrate to investors, regulators and the public how they’re playing their part to address the threat of climate change and preparing their businesses for a future economy that’s much less dependent on fossil fuels.
Many have responded by pledging to reach net-zero emissions several decades into the future, typically by 2050.
While that gives them plenty of time to achieve the targets, reducing emissions across a diversified portfolio is no small undertaking.
“We have a huge responsibility to change the way we invest, insure and serve our customers, ” Aviva chief executive officer Amanda Blanc said in the statement. “For the world to reach net zero, it’s going to take leadership and radical ambition.”
Aviva said its net-zero goal includes shareholder and policyholder assets where it has decision-making control.
It also covers the company’s holdings of corporate credit, equities, direct real estate and sovereign debt.
The insurer said it will increase its green investments and allocate a further 10 billion pounds from its auto-enrollment default funds and other policyholder funds into low-carbon strategies by the end of next year.
By the end of 2021, Aviva said it will stop underwriting companies that make more than 5% of their revenue from coal unless they have signed up to the Science Based Targets initiative, widely regarded as the gold standard for climate plans. And it will divest from companies that fail to meet this criteria by the end of 2022.
Aviva is a member of the Net-Zero Asset Owner Alliance, which was convened by the United Nations and counts many of the world’s biggest pension and insurance funds among it members.
The Alliance has set a minimum net-zero target for no later than 2050. — Bloomberg