Aviva’s CEO letter warns over sustainability targets

Aviva Investors will hold investee companies accountable to a wider definition of sustainability in 2022, with companies set to be judged against expectations on biodiversity and human rights, as much as climate and executive pay.

In his letter, Mark Versey says Aviva Investors will take action against company directors if they do not meet its expectations on sustainability improvements, saying it would hold both boards and individual directors accountable at companies "where the pace of change on climate, biodiversity and human rights does not exhibit sufficient urgency". Versey called on companies to adopt an "integrated approach", adding that "simply cutting emissions but allowing the destruction of the rain forest to continue will do little to reverse global warming" and in cases where companies "consistently fail to meet its requirements", it will divest. In 2021, Aviva Investors voted against the re-election of directors at 137 companies for lack of progress on ethnic diversity, and at 85 companies due to human rights concerns. Aviva Investors also rejected 33% of executive pay proposals in the UK due to concerns over "quantum and structure". Versey said: "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."

Published 26 January, 2022