At Aviva Investors, we've always believed that companies conducting their business in a responsible and sustainable manner are more likely to succeed over time, benefiting our customers and society as a whole.
We engaged with SOCO International, a FTSE 250 oil and gas company, regarding its operations in Virunga National Park, a designated world heritage site in the Democratic Republic of Congo (DRC). We felt its operations in this protected area and the associated reputational impact was damaging for SOCO and, consequently, a concern for shareholders.
In the second quarter of 2014, our engagement intensified. We commissioned research providers, EIRIS, to produce an independent report into SOCO’s activities in the area. It set out six recommendations relating to better governance, transparency and the management of human rights issues, as well as the publication of a biodiversity policy with a commitment not to carry out exploration or production within world heritage sites. We presented this to the board of SOCO, which welcomed the report and its recommendations, and we shared it with other interested investors at a round-table discussion we hosted in May.
Our aim is to work with companies to achieve outcomes that are beneficial to them, its investors and our clients. On 11th June, SOCO announced it would not drill in the Virunga National Park nor conduct any future operations in any other world heritage sites. This breakthrough led to the withdrawal of the World Wildlife Fund’s (WWF) complaint lodged at the OECD National Contact Point. SOCO has not yet addressed all the recommendations and there continue to be ESG risks associated with operating in the DRC. Consequently, we remain actively engaged with SOCO to resolve these outstanding concerns.
Protecting World Heritage sites
World Heritage Sites are irreplaceable, iconic landscapes and include sites such as the Grand Canyon and Great Barrier Reef. While they are protected under the UNESCO World Heritage Convention because of their ‘Outstanding Universal Value’, these sites are increasingly under threat.
To better understand the scale of the threat, Aviva Investors, together with Investec Asset Management and the WWF, collaborated on a report, which provides new evidence of the threat to natural World Heritage Sites from extractive mining. The research indicates that nearly 31% of natural World Heritage Sites are currently subject to some form of extractive activity – either with active operations or through concessions that have been granted.
Aviva Investors launched a collaborative investor engagement project to engage with extractive companies, and call for ‘no go’ commitments on World Heritage Sites and continued this work through our engagements in 2016. Find out more and read the report.
Our commitment to invest in lower carbon infrastructure
In July 2015, Aviva plc announced an investment target of £500 million annually for the next five years in low carbon infrastructure, a fifth of which was pledged by Aviva France. We also set an associated carbon savings target for this investment of 100,000 tonnes CO2 annually. This target was set in recognition of the scale of investment required in renewables-based power generation and energy efficiency. In the first year (1st July 2015 – 30th June 2016) we signed £509 million of new investment in wind, solar, biomass and energy efficiency.
Mobilising finance to support the global goals for sustainable development
On 25 September 2015, 193 world leaders committed to 17 UN Sustainable Development Goals (SDGs) to achieve three critical objectives in the next 15 years: end extreme poverty, fight inequality and injustice, and fix climate change.
Speaking at the United Nations President of the General Assembly meeting in New York on 21 September 2015, Aviva CEO, Mark Wilson, called for businesses and governments to work in partnership to successfully deliver the SDGs.
We are reshaping capital markets so that they are sustainable.
Group Chief Executive Officer, Aviva plc
A year later since the global commitment to the SDGs, Mark Wilson, joined international leaders to discuss the acceleration of capital investment into the goals, towards sustainable capital markets.
It is enlightened self-interest that determines why business will act sustainably. If business isn’t sustainable then society is at risk. And if society isn’t sustainable then business is at risk.
Group Chief Executive Officer, Aviva plc
Responding to a report by the Brookings Institution that identifies policy strategies to achieve the SDGs, Mark Wilson sets out Aviva’s practical recommendations, outlined in this report: Money Talks: How Finance Can Further the Sustainable Development Goals
Being responsible investors is one of our five investment pillars, and there is a clear business rationale for this approach. Experience tells us that by incorporating environmental, social and governance (ESG) considerations into our investment process, we can deliver better outcomes for our clients.
CEO, Aviva Investors