Multinational Insurer Aims for Net-Zero, But What Does Net-Zero Really Mean?

Insurance giant Aviva has pledged to hit net-zero by 2030.

Row of wind turbines in front of sunrise in field landscape, Rilland, Zeeland, the Netherlands

Mischa Keijser / Getty Images

Last month, former Bank of England governor Mark Carney kicked off somewhat of a firestorm by suggesting his employer’s investments were net-zero emissions, even though the company continued to invest in coal. The theory Carney was pushing was that because Brookfield, where he serves as vice-chair, invests massively in renewables, the emissions that those technologies avoid could be considered to "cancel out" emissions from the fossil fuels it owns.

net-zero emissions

Net-zero is a scenario in which human-caused greenhouse gas emissions are reduced as much as possible, with those that remain being balanced out by the removal of greenhouse gas emissions from the atmosphere.

 

Insurance Giant Aviva Makes a Pledge

The latest one of note is offered by UK insurance giant Aviva, which has pledged to hit net-zero in its own supply chain and operations by 2030, and then to reach net-zero across its investment portfolio a decade later.1 Given how far off 2040 is though, and in how much trouble we’ll be if we wait until then to make progress, Aviva is also announcing more immediate decarbonization steps. These include:

  • Investing $8.4 billion in green assets, including $2 billion of policyholder monies into climate transition funds, by 2025.
  • Investing $3.5 billion in low carbon and renewable energy infrastructure, and delivering $1.4 billion of carbon transition loans, by 2025.
  • Achieving a 100% electric/hybrid company fleet by 2025.
  • Achieving 100% renewable energy by 2030.
  • Divesting from all companies which make more than 5% of their revenue from coal by 2022.
  • Stopping underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels.

These last two pledges, however, come with a fairly important caveat – they won’t apply to businesses that have signed up to the Science-Based Targets Initiative. That’s because Aviva believes that engaged ownership, through its Climate Engagement Escalation Program, can help incentivize carbon-intensive industries to do the right thing.2  

It’s all very interesting. A few years ago, before the term net-zero became so commonly and diversely used, the commitments that Aviva is making would have looked like a pretty robust and ambitious climate strategy. Perhaps not the most ambitious in the world, but at least one of those plans that is moving – substantively – in the right direction. Whether and how exactly they reach something that’s truly net-zero, however, is more debatable. And that’s because net-zero is becoming increasingly hard to pin down.