Aviva issues ESG warning

Aviva Investors, the asset management arm of Aviva, has warned some 1,600 companies in which it owns stakes that it will hold them accountable at their annual meetings if they prove too slow to meet climate and sustainability targets.

The company said it could sell out of its equity and bond holdings at companies that consistently fail to meet its requirements.

Aviva Investors manages some £232 billion in assets.

In an annual letter to the chairs of the companies, CEO Mark Versey said it was crucial that boards did not sacrifice longer-term goals because of short-term market risks such as rising inflation and possible recession.

“Potential conflicts could arise in various ways, including securing reliable energy sources by locking in high-carbon capacity, or protecting profit margins by inadvertently damaging the long-term viability of supply chains,” Versey said in a statement.

Ahead of the looming AGM season, he said that the focus would be on how companies respond to a cost of living crisis in the wake of war in Ukraine, the transition to a low-carbon economy, and efforts to reverse nature loss. 

Among specific requests, Aviva Investors said it expected companies to publish “robust and viable” climate transition plans, and to do so in a “just and inclusive manner” that factors in the social upheaval caused by the global shift.

It also said it would look “unfavourably” on attempts by boards to protect profitability and returns through a “disproportionate transfer of costs to employees, suppliers and customers”.

Last year, Aviva Investors voted against 134 companies for not moving quickly enough on climate change, or for not disclosing enough about their efforts.