Our investment approach.
Aviva Investors is our global asset management company, with?￡346 billion (as at 31 December 2019) assets under management in equities, fixed income, property and multi-asset.
Building on Aviva Investors’ 40-year heritage in responsible investment, in 2019 we have continued to:
- Enhance the way we integrate environmental, social and governance (ESG) considerations into our investment decisions.
- Act as responsible stewards of our investments, through our annual general meeting (AGM) voting and engagement activities.
- Use our influence and experience to drive sustainable market-wide capital markets reform.
Integrating ESG considerations into our decisions
We work together with fund managers and analysts, customising ESG integration for each investment process, to deliver better investment?outcomes for our clients.?
We incorporate ESG issues into our investment analysis and decision-making because we believe it?delivers better investment outcomes for our clients,?society and the environment.
In particular, Aviva Investors’ Global?Responsible Investment Team (GRI Team) is a key?component in building Aviva Investors’ House View,?which cascades back through the organisation and?helps guide medium- to long-term investment?positions.
The GRI team make sure material ESG factors,?such as global climate negotiations and social?trends in urbanisation, are considered when?determining the firm-wide macro outlook.
As long-term investors, we see factors such as?corporate culture, good governance, climate?change strategy, and employee and market place?attitudes as core to the success of our investments.
We were also one of the first large asset managers to make the integration of ESG factors part of the pay criteria for investment employees. Through our Global Reward Framework, all investment employees should support responsible investment and integrate ESG issues into their investment processes.
At its simplest, stewardship means taking responsibility for something entrusted into our care.
To us, it means monitoring, engaging, and where appropriate, intervening, on matters that can have a material impact on the long-term value of our investments. Matters such as board diversity, human rights abuses and greenhouse gas emissions.
In practice, this means challenging companies we invest in on topics as varied as their use of antibiotics in industrial agriculture to exercising our rights as shareholders to push back mining in UNESCO World Heritage Sites.
In 2019 we engaged over 4000 times with over 2400 companies and voted on 61,874 resolutions at 5,382 shareholder meetings as part of our stewardship responsibilities.
We also participated in 1276 collaborative-based engagements relating to animal welfare, board diversity, climate change, culture, health & safety, human rights, modern day slavery, quality of life, responsible content management and supply chain labour standards.
Aviva Investors is a founding signatory to the UN Principles for Responsible Investment. We maintained our ranking of A+ in their 2019 assessment.
During 2019 Aviva Investors enhanced their responsible investment processes and embarked on a global, company-wide initiative to fully embed them across all asset classes. We have reached some important milestones. These include:
- Establishing a new responsible investment philosophy, setting out our responsible investment commitments as a business.
- Agreeing and implementing specific ESG integration policies for each of our investment functions: Credit, Equities, Multi-Asset and Macro, Real Assets and Solutions.
- Developing a framework for new products and solutions that meet the specific needs and values of our clients including building a Sustainable Outcomes Funds Range linked to the United Nations Sustainable Development Goals (SDGs). We have already launched the first two products in the range – the Sustainable Income and Growth Fund and the Climate Transition European Equities Fund – and will develop several more in the next three years.
- Working with Aviva UK Life to design funds for customers who want more bespoke solutions. For example, in July 2019 Aviva UK launched the ‘Stewardship lifestyle strategy’ – a workplace pension default investment strategy, marking the first time an investment strategy has been solely based on the Aviva Investors Stewardship Funds. These funds were also then launched onto Aviva UK’s Adviser Platform, providing a new ethical and ESG option for pension customers.
The World Benchmarking Alliance
In September 2018, we launched the World Benchmarking Alliance (WBA) as a founding partner with the Index Initiative and the UN Foundation at the UN General Assembly.
The initiative, also funded by the UK, Dutch and Danish governments, will publish free and transparent benchmarks to the public which rank companies on their contributions towards achieving the UN Sustainable Development Goals (SDGs).
At a time of increasing focus on the role of the private sector in helping to drive greater levels of sustainability, equality and prosperity in society, the WBA will increase transparency and accountability for businesses in relation to the SDGs.
It aims to empower consumers, investors, governments and civil society organisations by providing them with free and publicly available data that shows a company’s SDG performance, which they can use when deciding where to spend their money, allocate their investments or direct their policy and advocacy efforts.
In 2019 the WBA published their first two rankings on sustainable seafood and climate change. In 2020 this will be accelerated with the publication of a suite of rankings addressing food and agriculture, digital inclusion and gender equality and empowerment.
Protecting UNESCO World Heritage sites?
Aviva Investors is working towards steering the oil industry away from marine life in World Heritage sites. Following a number of successful engagements on this topic, including SOCO International and BP, we helped to launch a collaborative project to call on extractive companies to make ‘no go’ commitments in World Heritage sites
Fighting antibiotic resistance?
Our responsible investment priorities mean we want to tackle Anti Microbial Resistance (AMR). We use our role as responsible shareholders to engage our investee companies, predominantly in the pharmaceutical and food sectors, to develop a robust policy on AMR and phase out of antibiotic use across their supply chains.