Aviva expands sustainability expectations for companies

Aviva Investors, the global asset management arm of Aviva PLC, has raised expectations of companies it invests in to provide tangible and transparent progress in 2022 with a broader definition of sustainability.

Mark Versey, Chief Executive Officer of the asset manager, said in his Annual Letter to Chairs that Aviva will begin to evaluate companies based on a criteria of expectations on biodiversity, human rights, climate and executive pay.

Versey said the firm will target multiple areas to avoid triggering other negative impacts that may destabilise other aspects of a sustainable economy. The letter will be distributed to 1,500 companies based in approximately 30 countries around the world.

“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,” Versey said.

“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 also said that companies must do more than develop climate action plans to support broader impacts on the environment and society, allowing for a fair transition for workers, customers and communities.

“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,” he said.

The letter confirmed Aviva will hold boards and individual directors accountable for not taking on sufficient change with climate, biodiversity and human rights in a certain amount of time. Executive compensation structures and performance targets will also have to reflect sustainability goals implemented by the firm.

The asset manager will divest in circumstances where companies consistently fail to meet the requirements.