Aviva commits £2.5bn to green investments following climate risk report
Insurance giant Aviva has announced a target to invest £500m every year for five years in renewable energy and energy efficiency.
Today’s (24 July) announcement of £2.5bn worth of investment will give the insurance giant carbon savings of 100,000 for these investments.
Aviva’s plans were announced in a speech by chief executive Mark Wilson at the launch of an Aviva-commissioned report by The Economist Intelligence Unit, which investigates the economic risks of climate change.
Aviva chief executive Mark Wilson said: “As an investor, we’re going to challenge fossil fuel companies to look longer term and to the low carbon economy. We will divest where we think a company is not making sufficient progress towards the engagement goals set."
The report by The Economist Intelligence Unit estimates that asset managers could expect losses of up to $7trn with global warming of five degrees. The report added losses of $13.8trn, or 10% of the world’s total manageable assets, could be expected if global warming was allowed to reach six degrees.
The report says the asset management industry is at severe risk of losses from climate change risks such as floods, droughts and extreme weather as well as economic problems and long-term instability. It adds that carbon pricing is crucial to addressing the threat of climate change, with the inaction of governments a significant failure to address the importance of global warming.
The report claims the result of six-degree global warming would be "catastrophic" and regulators should look to require asset managers to disclose the climate risks in their investments.
'Hard economic sense'
The launch of the report coincided with Energy Secretary Amber Rudd’s speech on climate change at the Aviva event this morning. The Aviva chief executive praised Rudd’s attitude to climate change.
Wilson addressed Rudd, saying: “You’ve said that a low-carbon future isn’t ‘fluffy’ or ‘indulgent’. On the contrary, you’ve said it makes ‘cold, hard economic and business sense’. That’s the language we understand at Aviva.”
Wilson also considered the upcoming Paris climate change talks in December and called on the Energy Secretary to get an agreement at the negotiations. “Paris cannot be a talkfest,” said Wilson, “with lots of haggling, huge compromises and a lovely, fluffy statement at the end. It is our big opportunity to sort this out.”
While Rudd’s words reiterated the Government’s pledge to tackling global warming, policy changes announced this week has left many in the renewable energy industry concerned about its commitment to the issue.
In her speech today, Amber Rudd said: “The bottom line is this - if we are acting on climate change to preserve our economic prosperity, we have to make sure that climate change action is pro-growth and pro-business.”
However, her speech was slammed as “gross hypocrisy” by Friends of the Earth’s Craig Bennett, following Government moves to cut financial support for solar and biomass conversion plants, scrap tax exemptions for renewable energy and shut down the home energy efficiency Green Deal scheme.