Aviva Investors has warned companies not to sacrifice long-term sustainability goals in order to combat near-term challenges posed by energy shocks, supply chain disruption, and recession risk.
Mark Versey, CEO, said longer-term sustainability objectives were “critical” and should not be secondary to tactical responses to shorter-term challenges.
Versey made the statement in a letter to around 1,600 companies across 31 countries in which the firm is a shareholder or bondholder.
“Events over the past year have forced us all to revaluate and adjust near-term priorities to navigate the lingering reverberations from the pandemic and the political, social and economic turmoil caused by the war in Ukraine,” he wrote. “However, as we develop strategies to counter energy shocks, supply chain disruptions, elevated inflation, and recession risks, tactical responses today must not undermine the delivery of critical longer-term sustainability objectives.”
He added: “There can be no wavering from our collective commitment to building a sustainable future, recognising the inextricable link between long-term success of companies and a thriving planet and society.”
The firm laid down guidelines to help companies develop climate transition plans to support decarbonisation this year and to protect long-term assets through “ethical financial decision-making” amid challenges such as the cost of living crisis, transition to a low carbon economy and reversing nature loss.
The asset manager disapproves of attempts to protect profitability through a disproportionate transfer of costs to employees, suppliers and customers. It also expects companies to begin reporting – within a reasonable timeframe – against the Taskforce on Nature-related Financial Disclosures, which is a global initiative to deliver a framework for nature-related risk, opportunity management and disclosures.
Aviva Investors said it would divest in companies failing to meet the requirements of its stewardship process and that it had voted against 134 companies in 2022 for insufficient progress or disclosure on climate change, compared to 165 companies the previous year.
The firm further said it had voted against the re-election of directors at 107 companies for lack of progress on ethnic diversity, directors at 71 companies for insufficient policies and targets on biodiversity, and opposed directors at 51 companies for human rights violations based on last year’s data.
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