Aviva has more than £920 million invested in companies developing new coal projects and operating in the oilsands industry, despite its support for the Paris Climate Agreement, Unfriend Coal campaigners warned. In a briefing released ahead of the insurer’s annual general meeting they said its policy of engaging with companies to drive change had had “no meaningful successes” and that, as of November 2017, Aviva was financing developers planning to build 90 GW of new coal power.
Aviva began engaging with 40 coal companies in 2015, and this included asking whether they had “any plans for new investment in coal generating capacity, as we believe this in particular would go against our approach to helping meet the Paris Agreement of limiting global temperature rise to well below 2°C”, according to the insurer’s climate-related financial disclosure 2017. “Where we don’t see any prospect of movement then we will divest,” it adds. In September 2017, it added two companies to its Investment Stoplist, Japanese Utility J-Power and Poland’s PGE, “and divested our active beneficial holdings wherever possible.” It is in the process of divesting £11 million from 15 more companies.
However, in November 2017 the insurer was the second biggest investor in PGE with £146 million (US$198 million) of shares, including £90 million (US$122 million) through its Polish pension fund OFE. PGE is Europe’s second biggest CO2 emitter and the continent’s largest coal power developer, with plans to build 5.2 GW of new coal plants. Lucie Pinson, Unfriend Coal’s European co-ordinator and author of the briefing, said: “The sums Aviva is divesting are trivial compared with the huge financial support it is giving to coal and oilsands companies undermining the fight against dangerous climate change. This is at odds with Aviva’s commitment to the Paris Agreement and it should prove that it is serious by divesting from companies unless they commit to rapid and meaningful change.”
The briefing from NGOs supporting the Unfriend Coal campaign reveals that:
Aviva has £458 million (US$621 million) invested in 31 coal plant developers, including 11 which plan to build more than 90 GW of new coal power – more than six times the British coal fleet.
Aviva’s Polish pension fund OFE has increased its holdings in Polish coal companies, which plan more than 8 GW of new coal power plants, from £272 million in 2015 to £371 million in 2017 (€310 to €422 million).
Aviva has £19 million (US$26 million) invested in India’s National Thermal Power Corporation, which plans to build 38 GW of new coal power, making it the world’s biggest coal plant developer.
Aviva has over £469 million (US$634 million) invested in companies operating in Canadian oilsands or planning to build major oilsands pipelines.
Steve Waygood, Chief Responsible Investment Officer Aviva Investors, has responded to the report from Unfriend Coal, stating: “Aviva’s commitment to sustainable investment and work on climate change goes back over two decades. In 2006 we became the first carbon neutral insurer and in 2017, we invested £1.27 billion in green bonds and low carbon infrastructure.
“We welcome this report from Unfriend Coal and we agree on a great deal. But we fundamentally believe that, as investors, we can play an active role in driving change and helping these companies move into low carbon and renewable energies. We know that engagement can be a more powerful tool for change than simply walking away.
“As an asset manager we engage with companies and NGOs on environmental, social and corporate governance issues and have done so for over two decades. We actively engage with the coal companies we invest in, encouraging them to meet the standards we expect in climate change. Where those expectations are not met, and where clients have given us the discretion, we will divest. We have already divested from two power companies and are in the process of divesting a further 15 companies from our portfolio. But we do not consider divestment as a badge of honour, but rather a failure of engagement.”