Aviva Investors pledges to hold boards to account on ESG

27 January 2022

Aviva Investors has pledged to hold boards and company directors accountable if they fail to meet its expectations on sustainability.

In an annual letter to chairs, chief executive Mark Versey said the firm would judge companies this year against expectations on biodiversity and human rights as much as climate and executive pay.

The letter, which will be sent to 1,500 companies across 30 countries, stated: “We want to encourage companies to consider the whole picture of sustainability because this is how they will create the greatest return for shareholders while helping to build a better future for society.

“Companies must now turn their pledges into concrete and measurable plans of delivery. Our letter sets out clear expectations as to how they should do this and what those plans must address across climate impact, biodiversity and human rights.”

Versey warned that addressing just one area would be a less effective approach because it could trigger negative impacts that would undermine another aspect of the transition to a sustainable economy. He cited the example of companies developing climate action plans, which Aviva believes must also manage dependencies and impacts on nature, as well as supporting a just social transition for workers, customers and communities.

Versey added: “Simply cutting emissions but allowing the destruction of the rain forest to continue will do little to reverse global warming. Companies need to adopt an integrated approach for maximum benefit.”

The firm has used its stewardship programme to help shape change at investee companies. In 2021, Aviva voted against the re-election of directors at 137 companies for lack of progress on ethnic diversity and opposed directors at 85 companies due to human rights concerns. It has vowed to divest in cases where companies consistently fail to meet its requirements.

Professional Paraplanner