Aviva Investors has £236 billion funds under management

 

Challenge: Maximising financial benefit for clients and avoiding climate change risks
Aviva Investor’s sees its primary role as ensuring that its clients’ portfolios benefit from the financial opportunities associated with climate change and avoid, as far as possible, the financial risks. Having supported CDP since its inception in 2001, Chairman of the Aviva Group, Lord Sharman of Redlynch, seeks an advance from disclosure to mitigation, a realisation of Paul Dickinson’s vision when he founded CDP ten years ago.

Lord Sharman sees investors playing a key role in taking action on addressing the climate challenge; “Private capital is essential to achieving the transformation to a low carbon economy and for contributing to the delivery of mitigation and adaptation measures. Through the allocation of capital, and by engaging with companies in our portfolios, investors can influence how companies respond to climate change.”

Solution: To catalyse company action
Aviva Investors recognises that companies’ disclosure to CDP shows transparency, efficiency levels, and reveals business issues which deliver financial impact. Stephanie Maier, Corporate Responsibility Manager, acknowledges that a company’s disclosure to CDP, along with the annual report and accounts, is considered in Aviva Investors’ investment decisions and that the quality of carbon management revealed through the CDP response is an influence.

Stephanie Maier asserts; “Companies who think about carbon management commit and do it. Aviva Investors’ role is to catalyse company action, not simply to meet targets but to look at the bigger picture.”

Aviva Investors has been forthright in demanding that companies raise carbon management on their agenda. They look at whether companies show active engagement on disclosure and performance and if they make their CDP report public. They write to request that companies respond to CDP.

Lord Sharman emphasises; “The CDP data helps us to determine the quality of an individual company’s management response and is a factor in our overall buy, sell and hold decisions. When necessary we make specific recommendations for change. At Aviva Investors we take this very seriously as the average length of time we hold a stock is for six years, which is longer than most companies long term strategy. At one extreme, if such a company had not even bothered to respond to the CDP, then we tell them that unless this changes, we may vote against the report and accounts at the company’s next AGM. This is proving quite a successful sanction.”

As a founding signatory and provider of seed funding to Carbon Action, Aviva is supporting the active use of CDP data to influence companies and accelerate action.

Benefit: Illuminating for companies and a signal to policymakers
Maier sums up the advantages that reporting to CDP offers companies; “Measurement allows management. It provides a framework to consider options, shows investor transparency and benchmarking; all in turn impacting energy efficiency, costs and reputation.” At a more detailed level disclosure can reveal what barriers exist and why some industries show resistance to adopting more carbon friendly technology.

As a large institutional investor Aviva recognises it has an ability to help shape policy debate on climate change. Lord Sharman, “We seek to use this influence carefully and strategically, and the body of information now generated by the CDP enables us to determine at the macro level just how far the majority of companies have to go until we are collectively managing the key risks and opportunities associated with climate change. I believe this helps to confirm that climate change represents a profound market failure. In so doing, this demonstrates the need for much tougher policy both on the international stage, as well as at the national level.”

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  © 2014 CARBON DISCLOSURE PROJECT, Registered Charity no. 1122330.
A company limited by guarantee registered in England no. 05013650