Business

Aviva sets target for net zero carbon footprint by 2040

Aviva has become the first leading insurer worldwide to set a target to shrink its carbon footprint to net zero by 2040, a decade earlier than most banks.

The firm, one of the UK’s top asset managers with £300bn of investments under management, said it had written to the 30 biggest CO2 emitters in its portfolio, comprising companies in the oil and gas, utilities and mining sectors, asking them to sign up to the science-based targets aligned to the Paris climate agreement and to set net zero emission goals with fixed deadlines of 12 to 36 months.

If they do not take action, Aviva said it would sell its shareholdings in those companies, but added that it had been getting some good responses. It will report on progress towards its target every year.

The firm has set interim targets, of a 25% cut in emissions from its investments by 2025 and a 60% reduction by 2030. It also plans to shrink CO2 emissions from its own operations and supply chain to net zero by 2030, similar to rival Legal and General. In addition, Aviva will invest £6bn in green assets by 2025.

Aviva is taking more drastic action on coal. By the end of next year, it will divest from all companies which make more than 5% of their revenue from coal, unless they have signed up to the science based targets, and it will stop underwriting insurance for these firms by the end of 2021. In recent years Aviva had come under fire for being the second-biggest investor in the Polish coal industry, the most polluting in Europe.

Amanda Blanc, the chief executive, 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.”

Lindsay Keenan, European coordinator of the climate campaign group Insure Our Future, said that while she welcomed divestments from the coal sector, the company should “unambiguously divest from all coal, oil and gas companies which are still developing and planning new fossil fuel expansion projects”. She said: “Aviva should also make it clear that it will not insure any new fossil fuel projects. And Aviva should install a process for transparent third-party monitoring of its progress.”

The campaign group ShareAction noted that while there were pension funds that had committed to more ambitious targets, all big insurers, banks and asset managers were focused on 2050, including sustainable coalitions such as the investor-led initiative Climate Action 100+.

Wolfgang Kuhn, director of financial sector strategies at the campaign group ShareAction, said Aviva’s commitment “disturbs the convenient consensus that treats 2050 as a God-given deadline that, if met, will solve the climate crisis … Aviva makes clear that swifter action is both necessary and possible.”

Kwasi Kwarteng, the business and energy secretary, said: “Business have a huge and vital role to play in tackling climate change … 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 [dioxide] emissions and support new jobs as the UK builds back greener.”