Aviva PLC

Moreover, we know the economy-wide shift to Net Zero emissions will require a greater and deeper level of engagement between companies and their investors. Our climate engagement escalation programme includes 30 'systemically important carbon emitters' that contribute towards 30 per cent of global Scope 3 emissions. Here, our focus is on long-term Net Zero targets, clear roadmaps for change, strong governance and reporting to enable accountability for delivery, and the alignment of corporate lobbying with the commitments of the Paris Agreement. [...] To ensure the delivery of our targets we'll constantly monitor and track the progress achieved through our actions. This will provide us with key insights on the effectiveness of the levers we employ to reduce our emissions and their impacts on our business and broader society so that we can adequately steer the process. To monitor and oversee the execution of our plan we defined a governance structure (see section 3.6) and ensured that climate considerations are integrated in the Long Term Incentive Plan of our Senior Management and built into the performance and pay criteria of certain areas of our business (e.g. investments). [...] The overseeing and steering of the Climate Transition Plan are performed by our Aviva Sustainability Ambition (ASA) Steering Committee to ensure executive accountability and senior supervision on the delivery of the Climate Transition Plan. The ASA Steering Committee is composed of executive members from all the involved functions and has delegated authority from the Executive Committee to lead Aviva's Climate Transition Plan. It provides oversight and challenge in meeting our key Net Zero objectives, as well as quarterly updates to the CEO and Board Customer, Conduct and Reputation Committee. [...] To this end, we recently set up a Climate Action Working Group responsible for the finalisation of the Net Zero programme setup, plan execution and monitoring of foreseen levers. The Climate Action Working Group will coordinate the activities of four functional workstreams: investments, operations (including internal operations and supply chain), insurance (including underwriting and claims management) and risk management, ensuring we meet the challenging roadmap ahead of us.

Sustainability issues influence every aspect of our leadership decisions and day-to-day business activities. To ensure this remains the case, we have a clear and robust governance structure in place. In 2021 we established the executive level Aviva Sustainability Ambition Steering Committee to drive and monitor the delivery of our plan and targets. The Aviva Sustainability Ambition Steering Committee has delegated authority from the Group Executive Committee. The Sustainability function, which reports to the Aviva Executive, provides sustainability expertise to enable delivery and coordination of local activity across Aviva's markets and functions. Crucially, there is clear individual executive accountability for all the sustainability KPIs. ESG factors are included in senior executive long term incentive plans. Our progress and key performance metrics are reviewed regularly and overseen by the Aviva Group's Customer, Conduct and Reputation Committee.

The Customer and Sustainability Committee is responsible for assisting the Board in its oversight of Aviva's Sustainability Ambition (ASA). [...] The oversight of the delivery of all climate and sustainability ambitions and strategy is the responsibility of the UK IWR Chief Investments Officer (CIO). The CIO reports directly into the CEO and is a 'IWR ExCo' member. In addition, UK IWR Managing Directors (MDs) and the Chief Operating Officer (COO) are accountable for the delivery and the management of climate and sustainability strategy, risk management and climate-related impacts on their respective operations (including supply chain and underwriting).

We follow strict guidelines on how we work with governments and trade associations which commit us to acting with integrity in all our engagement with policymakers worldwide. We have an in-house Public Affairs team that is responsible for managing our approach and has clear accountabilities up to executive level. [...] Oversight of these activities and principles is the responsibility of the Customer and Sustainability Committee (previously the Customer, Conduct and Reputation Committee), which reports to the Aviva plc Board and publishes a summary of its activities in our Annual Report (available here). Our executive level Brand and Corporate Affairs Director, Stephen Doherty, is responsible for oversight of our public policy activities. [...] Our approach and processes related to climate advocacy are managed by the Group Public Affairs team. The trade associations that we are members of should be aligned with our values and policies, including in regard to the environment and wider sustainability. In the absence of this alignment, we would seek to engage the organisation to understand their position and to challenge and influence their position, and if necessary, distance ourselves from them.

The Trustee continues to be supportive of this ambition and, via its Investment Committee ("IC"), is engaged in productive dialogue where it regularly challenges Aviva Investors (as the manager of the Scheme's Standard default arrangement) around Aviva's progress. [...] The Trustee has adopted Aviva's ambition as its target for My Future Focus, My Future Focus (Pre 2024), My Future and the Stewardship Lifestyle, the Scheme's Standard and Alternative default strategies. [...] The Trustee has reviewed ESG impact assessments for the My Future Focus, My Future and Stewardship Lifestyle default investment solutions prepared by the Scheme Investment Adviser within the Scheme Year ended 31/03/2024, which evaluate the investment manager's approach to integrating ESG factors against the Trustee's ESG Policy. The Trustee has also assessed climate-related risks and opportunities for the sections with bespoke defaults using responses prepared by the relevant investment advisers. Through this approach the Trustee has been able to consider how the Scheme's investment managers for all the Scheme's popular arrangements take account of climate risk when making investment decisions. The Trustee is comfortable with the progress that has been made in this regard and remains committed to continued engagement on this matter with all investment advisers to the Scheme. [...] The Trustee has requested an Assurance Paper from Aviva to support their review of this Report detailing how the data contained within it has been sourced and modelled and the checks that have been performed. This allows the Trustee to scrutinise the Aviva personnel and processes involved in the production of the Report data. [...] The Trustee is assisted with various scheme governance activities by a dedicated Aviva Master Trust Governance team within Aviva. This team is led by the Head of Master Trust who reports into the Managing Director of Aviva's Workplace business. Within this team, an Aviva Master Trust Governance Manager is assigned specifically to supporting the IC in completing all of the relevant activities within the Climate Change Governance Framework including the production of this Report. [...] The Scheme's Climate Change Governance Framework is reviewed annually by the Trustee, taking advice from their investment and legal advisers (when required) to ensure this continues to reflect the latest regulatory requirements. [...] The Climate Change Governance Framework: - clarifies that the Trustee has ultimate responsibility for ensuring effective governance of climate-related risks and opportunities for the Scheme. - confirms which Committee (i.e., the Scheme's IC or Trustee Board) has responsibility for each element of the governance of climate-related risks and opportunities. - confirms the roles & responsibilities that have been established to enable the climate risk reporting for the Scheme and where responsibilities and accountabilities have been allocated or delegated to the Trustee Board, the IC, Individual Trustee Directors, Aviva, Isio, investment advisers for the bespoke default investment arrangements and/or the Scheme Secretariat. When appropriate, advice is also sought from Sackers (as legal adviser to the Trustee). - sets out how the Trustee will: – define and review climate change governance – review, maintain oversight, and record climate change risks & opportunities – determine, review, monitor and report key management Information relating to climate change – assess the Trustee Director's skills relating to climate change and develop a training plan – review climate change development activity – produce and communicate the Scheme's annual climate-related financial disclosure Report (this document). [...] Many accountabilities and responsibilities of the Trustee are delegated to the IC of the Scheme with the Climate Change Governance Framework providing a record of this. The IC reports to the Board on, at minimum, a quarterly basis and, where applicable seeks Board approval in respect of delegated activity as per the Climate Change Governance Framework. Where Board approval is being sought in respect of governance activity delegated to the IC, the Board will typically be provided with the same information as the IC, with confirmation of any decisions taken by the IC in respect of it and the IC's recommendation to the Board, if applicable. A summary of where Board and IC agenda time has been devoted to the discussion of matters pertaining to this Report within the Scheme Year ended 31/03/2024 is included within the appendix to this Report. [...] The IC meets (at minimum) once per quarter, providing the opportunity for the committee to conduct any necessary oversight of climate-related risks and opportunities in respect of the Scheme's popular arrangements. Within the risk register for the Scheme there is a risk assigned to the IC concerning 'Climate' and at each meeting an assessment is made on whether this assigned 'Climate Risk' remains inside tolerance. This assessment specifically considers if the performance of investments within any of the Scheme's popular arrangements is impacted by any physical and/or transition impacts from climate change. The status of this risk is subsequently reported to the Trustee Board (again on a quarterly basis) with escalations made as appropriate. As illustrated by the Framework below the scope of the activity under the remit of the IC in respect of the oversight of climate related risks and opportunities is significantly wider than just the review of this risk.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Please review the attached documents which go into detail on this and specifically describe our alignment with the Paris Agreement. All our engagement activities are focused on meeting our Net Zero commitments which go beyond the Paris Agreement goals. For example, we publicly commit to a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030. This is ahead of the 50% cut required by the Paris Agreement.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]As detailed in the attached documents, 'We are committed to using our influence to advocate for the systemic change needed to reach Net Zero before 2050 and ensuring alignment with this across all political activity. Our approach and processes are reviewed and monitored by the Public Policy team. Further information on this can be found in our Climate Transition Plan. The trade associations that we are members of should be aligned with our values and policies, including in regards to the environment and wider sustainability. In the absence of this alignment, we would seek to engage the organisation to understand their position and to challenge and influence their position, and if necessary distance ourselves from them.'