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SUSTAINABILITY 2030 PARTNER CONTENT FROM AVIVA
Business has a duty of care
This October brought the news that many
already knew. Ireland had missed their
target to reduce Green House Gas (GHG)
emissions and the pledge to reduce emissions
to 20% below 2005 levels by 2020 would not be
met. Significant financial penalties, estimated
at between €100‐150 million by the Minister
for Communications, Climate Action and the
Environment, will start to be imposed upon the
Emerald Isle from 2020 as a result of this failure.
While promising steps are being made globally
towards reaching the Sustainable Development
Goals (SDGs) and the Paris Accord, there are still
some very worrying statistics. The International
Energy Agency global energy and CO2 status report
2019 shows global energy consumption increased
by 2.3% in 2018, with fossil fuels supplying around
70% of this need. Global energy related CO2
emissions also grew by 1.7%, up 0.3% on 2018
figures. The World Economic Forum’s 2018 Global
Risk Report highlights growing concern with
eight of the top 10 risks facing the global economy
identified as environmental or societal, with climate
change a key driver linked to many of these risks.
While the finance industry may not be prime
polluters, there is a desperate need for all sectors
to work together on a solution. We have a duty
to assess the impact that business activities have
on the environment, to scrutinise entire value
chains and identify gaps or where we can align our
business activities closer to the SDGs.
For those of us in the insurance industry,
climate change is a very real threat. There have
been warnings that a warming of four degrees
would make modelling climate risk impossible
and ultimately uninsurable, demonstrable in
that extreme weather in Ireland in 2018 led to
€84 million in insurance pay-outs.
At Aviva, we recognise the need to move
beyond the niche of ‘green’ finance and ensure
We have a duty to
assess the impact
that business
activities have on the
environment, writes
Caitlín Flanagan.
Caitlín Flanagan, Corporate
Responsibility Executive,
Aviva Ireland
mainstream finance is more sustainable. In 2006
we were the first global insurance group to offset its
entire operational emissions. Through our carbon
offsetting projects, we have helped over a million
people in the developing world while promoting
the SDGs. We were recognised in 2017 for our work
in this area, being awarded the UN Framework
Convention on Climate Change’s Momentum for
Change Lighthouse Activity Status.
Businesses can no longer treat sustainability as an
externality and must internalise it into all processes.
ESG considerations can yield benefits for customers
too and sustainability is something that customers are
becoming more aware of when choosing products.
For example, Aviva focus on restoring, where possible,
rather than replacing during the claims process. This
means reaching our customers within 24-48 hours
after they instigate a claim so that the damaged
property can often be restored rather replaced. This
reduces cost, waste as well as reducing inconvenience
for our customers.
In 2018 Aviva were awarded the UN Foundation
Leadership Award for our work towards helping to
achieve the SDGs. This is reflective of the fact that
ESG is integral to all our business and investment
decisions. In Ireland we aim for all our commercial
redevelopments to obtain LEED gold status and Aviva
Investors have signed up to the UN Principles for
Responsible Investment.
The world of business and finance has traditionally
been muddied by a view of short‐termism and
finance flowing toward projects that offer short
term profitability. With the integration of ESG
considerations into all financial flows, it has
been stated that companies with a reputation
for sustainability attract and retain employees,
customers, B2B customers and investors as well as
lower operational costs, a convincing business case
indeed and one that will help Ireland move toward a
more sustainable future. n
Quarterly Review Q4 2019 Business & Finance
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