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Aviva throws its weight behind new ESG targets threatening to hold directors accountable

Aviva throws its weight behind ESG targets
Aviva throws its weight behind ESG targets - Photo: Pexels

Life insurance firm Aviva will bring in new ESG targets to deliver “tangible and transparent” improvements in sustainability and social responsibility, writes Fiona Keating

Mark Versey, Aviva’s CEO said in his annual letter to company chairpersons that the 1,500 businesses with the asset management’s portfolio will focus on ESG. The aim, he said, was to support Aviva becoming a net-zero company by 2040.

“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,” Versey said.

“We will hold boards and individual directors accountable where the pace of change does not reflect the urgency required,” he added.

Versey outlined Aviva’s four key priorities: climate change, biodiversity, human rights and executive pay.

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The investment giant, which has more than £260 billion of assets, came under fire last year for a lack of progress in ethnic diversity and human rights issues.

At an AGM in 2021, Aviva investors challenged board members at 85 companies with human rights concerns. Another 137 firms were questioned over a lack of diversity at company board level.

There were also moves on executive pay, usually one of the most contentious topics for shareholders. Aviva has said it will call for C-suite remuneration to be linked with achievements in climate-related objectives.

Furthermore, existing bonus and long-term targets which were at odds with sustainability commitments should be retired.

The board recently rejected 33% and 68% of executive pay proposals in the UK and US.

The company also said it was engaging in a 1.5-Celsius-aligned engagement program aimed at 30 of the world’s biggest carbon emitters. The investment company said it would carry out an “ultimate sanction of divestment if expectations are not met over one to three years.”

Aviva has built up its social responsibility strategy for community development. During the Covid-19 pandemic, the investment firm donated £43m in charitable funds.

What are your views on Aviva’s new ESG targets? Get in touch.

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