NAPF STEWARDSHIP ACCOUNTABILITY
FORUM
STEWARDSHIP AT AVIVA INVESTORS
November 2014
This document is for Professional Clients only. It is not to be viewed by or used with retail clients.
ABOUT US
OUR STEWARDSHIP HERITAGE
1970s
Active member of ABI (now IMA) investment committee shaping UK governance practice
1994
1996
Aviva Investors among first asset managers to publish Corporate Governance Voting Policy. Founding
member of the Corporate Governance Forum.
Joined International Corporate Governance Network (ICGN) & previously on Board of Governors
1999
2000
2001
2005
2006
2010
2011
2012
Joined Shareholder Voting Working Group to improve the voting process
Founding member of GIGN (Global Investors Governance Network)
Aviva Investors first asset manager to integrate corporate responsibility into voting policy
Active member of NAPF Stewardship Advisory Committee
Aviva Investors is founding signatory of the Principles for Responsible Investment
Aviva Investors signed up to UK Stewardship Code
Founding member of 2020 Investor Stewardship Working Party. Aviva Life signed Stewardship Code
Aviva Investors founded Corporate Sustainability Reporting Coalition at Rio+20 Conference
At the forefront of shaping the industry
ABOUT US
GOVERNANCE IN ACTION
Long-term, engaged, active investors
Source: Aviva Investors, November 2014
INTEGRATING ESG – OUR RIO NETWORK
PRINCIPLE 1
Developing our resources and building a Responsible Investment Officers (RIO) Network
Source: Aviva Investors, July 2014
INTEGRATING ESG – ESG DATA PROVIDERS
PRINCIPLE 1
Sourcing the best environmental, social & governance research
Data as at 15/01/2014
INTEGRATING ESG – ESG LAUNCHPAD IN BLOOMBERG
PRINCIPLE 1
Based on in-house ESG
heatmap which allows us to
monitor fund & index ESG risk
External sources:
- Sustainability profile
- Negative newsflow
- Corporate Governance profile
Internal sources:
- Overview of engagement activities
- Voting record
Source: Aviva Investors, in-house Bloomberg ESG Launchpad, July 2014
Input for investment decisions
The information provided is for illustrative purposes only and the Information about specific securities should not be construed as a recommendation to
buy or sell any securities.
VOTING - SCALE
PRINCIPLE 6
Total
22%
Remuneration
6%
32%
72%
4%
65%
Against
Abstention
Director re-election
24%
Audit report
19%
0%
11%
1%
20%
Support
65%
80%
40%
60%
80%
100%
Voting at over 4000 companies on over 44,000 resolutions annually
Source: Aviva Investors Jan-Dec 2013 data
ENGAGEMENT – CHANGING CORPORATE BEHAVIOUR
PRINCIPLES 3&4
FTSE250 oil & gas company agreed to withdraw from World
Heritage Site, Virunga National Park in the DRC and not to
operate in any World Heritage Sites in the future protecting sensitive habitats & species
FTSE100 mining company appointed Chief Sustainability
Officer and developed comprehensive policies to address
environmental, human rights and stakeholder issues – to
better manage risks and regain license to operate
Catalysed Board overhaul including new CEO and
remuneration structure – ensuring better Board
governance and leadership and a rebound in share price
Driving more sustainable companies – enhancing value & mitigating risk
Source: Aviva Investors, November 2014
COLLABORATION
PRINCIPLE 5
Industry leadership and collaboration
Source: Aviva Investors, November 2014
COLLABORATION - ENGAGEMENT
PRINCIPLE 5
Using collaborative forums, informal networks & developing new models of engagement
Source: Aviva Investors, November 2014
POLICY ACTIVITIES
MARKET REFORM
Aviva hosted the United Nations
Principles of Sustainable Insurance
event on 27 June 2014. Aviva
Group CEO, Mark Wilson,
addressed an audience of insurers,
investors, regulators and UN
agencies, giving his views on how
and why insurers should strive to
be sustainable and unveiling a new
report from Aviva Investors.
www.aviva.com/roadmap
Reforming capital markets
EXTERNAL RECOGNITION
AWARDS
Founder of the Sustainable Stock Exchanges Initiative which was named by Forbes
magazine as one of the “World’s Best Sustainability Ideas” and Finalist for the 2011 &
2013 Katerva Sustainability Award
“These are difficult times for the financial services sector, and the temptation for many
institutions is to batten down the hatches and ride out the public relations storm. Yet
Aviva dared to think big, to raise their head above the parapet and demonstrate true
leadership in gathering like minded institutions into the Corporate Sustainability
Reporting Coalition - an international programme with the potential to transform the
way sustainability is considered by large businesses.” Simon Mills, City of London
February 2013
Aviva Investors has won a Global CSR Excellence & Leadership
Award in the category of Most Innovative CSR Disclosure Policy at
this year’s World Corporate Social Responsibility Congress held in
Mumbai
Recognised and respected by key influencers and stakeholders
Q&A
ANNEX
ABOUT US
OUR COMMITMENTS
– Founding signatories of the UN Principles for Responsible Investment (PRI): we believe that companies
conducting their business in a sustainable and responsible manner are more likely to succeed over time. Our
Global Responsible Investment (GRI) team works with fund managers and analysts globally and across all asset
classes to integrate ESG issues into investment decision-making.
– Over twenty years focus on governance: our Corporate Governance and Corporate Responsibility Voting Policy
has evolved from over twenty years of active ownership. We are committed to the principles of the UK
Stewardship Code and International Corporate Governance Network (ICGN) Global Corporate Governance
Principles.
– Public commitment to international standards: We are signatories to the UN Global Compact and formally
recognise international standards such as the OECD Guidelines for Multinational Enterprises, the Universal
Declaration of Human Rights and the International Labour Organisation core labour standards.
– Ethical principles: Aviva fully supports the Convention on Cluster Munitions. Aviva Group has a policy not to
hold securities linked to companies involved in the manufacture of cluster munitions or anti-personnel mines
in shareholder funds and are working to exclude these from policyholder funds.
ABOUT US
GRI ADVISORY COMMITTEE
Professor Bob Eccles
Harvard Business
School
Chairman of the
Sustainability
Accounting Standards
Board (SASB)
Steering Committee
of the International
Integrated Reporting
Committee
Professor Tim
Jackson
University of Surrey
Professor of
Sustainable
Development
David Pitt-Watson
Jonathon Porritt
Sophia Tickell
London Business
School
Forum for the Future
Meteos
Co-chair of UNEP
Finance Initiative
Treasurer of Oxfam
Director of the
Sustainable Lifestyles
Research Group
Previously UK
Sustainable
Development
Commission
Previously Director of
Hermes
Co-Director of the
Prince of Wales’s
Business &
Sustainability
Programme
Previously Chair of UK
Sustainable
Development
Commission
External advisor to GSK
CR committee
Founder of the
PharmaFutures dialogues
Previously Chair of the
Board at SustainAbility
Respected expert advisors in the field of sustainability and governance
Source Aviva Investors
PUBLIC TRANSPARENCY
PRINCIPLES 1 & 7
1.
Corporate Governance & Corporate
Responsibility Voting Policy: exercise voting
rights in companies in which Aviva Investors
invests
2.
Active stewardship: our Stewardship
Statement is audited by PwC
3.
Integration: over 80% AUM have tailored
responsible investment policies in line with PRI
4.
Transparent disclosure: Policies and voting
record publicly available. Quarterly client
reporting.
Enhancing and protecting value through promoting good management and processes
INTEGRATING ESG – ESG PEER ANALYSIS TRACKER
PRINCIPLE 1
In-house Bloomberg ESG Peer Analysis Tracker
•
Highlights ESG performance and the potential financial implications relative to peers:
Embedded within Aviva Investors Global Research Platform, Aladdin
Source: Aviva Investors
Developing tailor-made solutions for fund managers
The information provided is for illustrative purposes only and the Information about specific securities should not be construed as a recommendation to
buy or sell any securities.
INTEGRATING ESG – BESPOKE RESEARCH
PRINCIPLE 1
Advancing RI Integration in each
asset class by developing tailored
mainstream ESG research projects
– Collaborating with other investors
where we have shared interests
– Engaging with market participants
– Sponsoring thought leading ESG
research
We published a joint report in July 2014 with Standard & Poor’s and Carbon Tracker: Carbon Constraints cast
a shadow over the future of the coal industry.
•
Source: Standard & Poor’s and Aviva Investors, July 23rd 2014
INTEGRATING ESG
PRINCIPLE 1
It is about
 fitting with the existing investment process
 gaining better insight on the risks and opportunities of an investment, educating both analysts and
portfolio managers in helping make better informed investment decisions
 demonstrating appropriate stewardship and oversight of the investments we make on behalf of our
clients.
It is not about
× restricting the investment universe by applying systematic passive or negative ethical screens (we can
apply such policies upon client requests)
× taking investment decisions based only on companies’ corporate responsibility strategy without taking
into account its financial performance and attractiveness.
This stems from our belief that companies which actively consider ESG factors in their strategy will
outperform their peers over
MANAGING CONFLICTS
PRINCIPLE 2
Comprehensive policy, robust process
Source: Aviva Investors
VOTING – MEASURING EFFECTIVENESS
PRINCIPLE 6
Director (re)election
Remuneration
Corporate responsibility
0
50
100
150
200
250
300
Improvements (Against to Abstain or Support and Abstain to Support)
Escalation or deterioration (Support to Against or Abstain and Abstain to
Against)
Robust voting but driving improvements
Source: Aviva Investors Jan-Dec 2013 data
POLICY ACTIVITIES
MARKET REFORM
Founded Corporate Sustainability Reporting Coalition
representing investors with US$ 2 trillion AUM, as well as
financial institutions, professional bodies, NGO and other
relevant stakeholders. Achieved Paragraph 47 in the official
UN Conference outcome document
Founder of the Sustainable Stock Exchanges Initiative which was named by
Forbes magazine as one of the “World’s Best Sustainability Ideas” and Finalist
for the 2011 & 2013 Katerva Sustainability Award
Influencing EU policy to ensure better
investor disclosure and drive more
sustainable companies
Improving the integrity of financial markets
DISCLAIMER
Except where stated as otherwise, the source of all information is Aviva Investors Global Services
Limited (“Aviva Investors”) as at 20 November 2014. Unless stated otherwise any opinions expressed
are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from
an investment managed by Aviva Investors nor as advice of any nature. The value of an investment
and any income from it may go down as well as up and the investor may not get back the original
amount invested.
Issued By Aviva Investors Global Services Limited, registered in England No. 1151805. Registered
Office: No. 1 Poultry, London EC2R 8EJ. Authorised and regulated by the Financial Conduct Authority
and a member of the Investment Management Association. Contact us at Aviva Investors Global
Services Limited, No. 1 Poultry, London EC2R 8EJ. Telephone calls to Aviva Investors may be recorded
for training or monitoring purposes.