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Aviva has become the first major insurer to commit to cutting net emissions to zero. The company, which manages around half a trillion pounds, including millions of people’s pension savings, said it aims to reach net-zero by 2040, a decade ahead of the UK government’s target.
Aviva said it will pressure companies it invests in to report regularly on their climate impact and will sell shares in firms that do not meet its environmental standards.
Campaigners welcomed Aviva’s commitment but pointed out that it does not rule out investments in companies that continue to invest in new fossil fuel extraction.
“Aviva should commit to stop investing in any company developing new fossil fuel reserves or supporting the opening of new reserves through the building of transport infrastructure,” said Lucie Pinson, founder and director of Reclaim Finance.
“If Aviva wants its net-zero target to have teeth, it must immediately rule out all investments and coverage in companies developing new coal and fossil fuel projects.”
The insurer said it aims to cut the carbon intensity of its investments by a quarter by 2025 and 60 per cent by 2030.
By the end of 2022, it will have sold its shares in companies that make more than 5 per cent of revenue from coal unless they have signed up to a Science Based Targets pledge, an organisation that monitors companies’ commitments to emissions reduction.
“Aviva is taking bold steps to help tackle the climate crisis,” said chief executive Amanda Blanc.
“As the UK’s leading insurer, we have a huge responsibility to change the way we invest, insure and serve our customers. For the world to reach net-zero, it’s going to take leadership and radical ambition. And it is going to take Aviva to play our part.”
The company also plans to make major green investments. The government decision to auto-enrol people into pension savings programmes has given the company £10bn that it will invest in low-carbon strategies.
Last month it wrote to 30 companies classed as systemically important carbon emitters in the oil, gas, mining and utilities sectors.
Richard Curtis, co-founder at Make My Money Matter, said: “In going above and beyond its peers, this net-zero pledge leads the race to the top we need to see from all financial institutions who recognise the dual role they play in fighting the climate crisis while at the same time working for their customers’ interests.”
Business and Energy Secretary Kwasi Kwarteng said: “Businesses have a huge and vital role to play in tackling climate change. It is fantastic that Aviva is taking radical action across its business, which will help the UK eliminate its contribution to climate change and influence other businesses to move in the same direction.
“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 emissions and support new jobs as the UK builds back greener.”
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