AVIVA PLC

From Lauraibm

Current revision as of 10:02, 31 July 2007

MI Summary

AVIVA present a detailed description of their commitment towards climate change, their aims are to adapt their products to encourage people to be more environmentally responsible, to use their power as an investor to encourage other organisations to be more responsible and finally to minimise their own carbon emissions.

In 2004 the corporation established the climate change forum, this forum co-ordinates activity to mitigate the impacts of climate change. AVIVA have a number of points to be proud of, for example 55% of global electricity comes from renewable sources (an increase from 2005) they also use low energy lighting, encourage employees to use shuttle buses to cut down on business travel and as a group recycle 59% of their waste.

However, despite these efforts their overall energy consumption has increased between 2005 and 2006, in this time period international air travel has also risen by 4% and paper consumption increased by 323 tonnes. In addition to this some of their businesses are unable to recycle due to lack of storage space. These factors all question the company’s ability to become the first insurer to be carbon neutral, a target set for themselves in 2006. The company also mention plans to offset their emissions that cannot be reduced, they may be lagging in this area as many organisations already have offsetting plans in place and are well on their way to becoming carbon neutral.

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AVIVA PLC and the Environment

We are actively committed to managing and reducing our impact on the environment. In 2006, climate change moved up everyone’s agenda. In the hottest year on record, the Stern Report, commissioned by the UK Government, spelled out the economic and social costs of inertia, but also outlined the immediate benefits the world would see if we all took steps now to reduce our carbon footprint.

Of course, our business is all about helping customers to prepare for the future, including a future affected by climate change, and we think we can help society to respond to climate change in four ways. First, by creating or adapting products that encourage people to be more environmentally responsible. Second, by using our power as investors to encourage other organisations to be more responsible. Third, by making sure we take steps to reduce our own carbon emissions and to minimise the impact we have on the environment. Finally, by being the first insurer to go carbon neutral for our worldwide operations.

The focus for all this is our climate change forum, where we are looking at how to minimise the effects of bad weather on our customers and our business. We are also keen supporters of the United Nations Environment Programme Finance Initiative, the Association of British Insurers’ lobbying on flood defences, and the CBI’s Climate Change task force. We also work with our financial services colleagues on various climate change projects.

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We are committed to a programme of management, continuous improvement and reporting of our direct and indirect environmental impacts, which marks our contribution to improving the world in which we live.

Indirect impacts These arise in the way we conceive, design and deliver our core business products and services, for example, in fund management, underwriting, claims handling and purchasing.

View the Human Rights, Customer and Supplier sections of this site for details of our performance in this area.

Direct impacts Direct impacts arise in the following activities: property management, energy and water use, paper use, waste management and travel and transport. Within each impact area, businesses are responsible for the gathering and monitoring of environmental performance data, which is then incorporated within the annual CSR report.

Programme highlights for year ending December 2005

• Increased use in renewable-sourced electricity - 100% in the UK, 20% in Ireland, and 20% in Aviva Czech Republic.
• 61% of waste is now recycled across the group.
• 11% global reduction in total CO2 emissions in 2005.
• Paper consumption has reduced group-wide by 967 tonnes, an 11% reduction on the previous year.
• Total business travel has reduced by 22 million kilometres and the combined car fleet has reduced by 679 vehicles.

Tackling climate change Aviva recognises that climate change is a significant environmental impact both for our business and society at large.

The establishment of the climate change forum at the end of 2004 is a clear sign of the importance of this issue for Aviva. The forum co-ordinates activity to mitigate the impacts of climate change, with a focus on initiatives that seek to minimise the impacts of weather events on our customers and businesses in a range of time horizons. Its primary focus is on general insurance activity, but it will in future also cover our other core business activities.

This forum:

• Brings together those people in Aviva with expertise in the field of insurance and climate change and determines how this issue affects our business;
• Identifies the impacts of climate risks, and where these affect our customers and our business now and in the future and discusses mechanisms to minimise these impacts;
• Develops an ongoing strategy to address climate risks and provides a focus for lobbying key stakeholders via industry bodies (such as the CII, ABI and UNEP).

The forum has co-ordinated contributions to the Association of British Insurers (ABI), input to the UK government’s Stern review of the Financial Costs of Climate Change, advice to government on the insurance implications of the forthcoming Home Information packs and membership of the steering group on the ABI report on the Financial Risks of Climate Change published in 2005. In addition, we continue to lobby governments on climate-related building and planning issues. Further, at an international level, we support and work with the United Nations Environment Programme Finance Initiative.

We also continue to develop products and services which provide a positive link between climate impact and premium paid.

2005 initiatives in this area include our Irish business, Hibernian, being the first company to undertake geographical identification of the areas most likely to flood in Ireland. This will allow us to offer cover to additional customers in areas currently often uninsurable in view of flood risk. This follows the digital flood mapping activity undertaken by Norwich Union in the UK.

Norwich Union is also sponsoring Project Flows, a pan European project looking at the issue of flooding. As part of the project we have developed the Norwich Union flood resilient home model, which is estimated to dramatically reduce the average cost of a flood claim from £50,000 to £10,000, through flood proofing and flood.

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Environmental Policy

The Aviva group, as a successful member of the international business community, recognises its corporate responsibilities towards both the environment and the community in its various roles as insurer, investor, employer and consumer. We believe in the importance of environmental protection and improvement. We believe that the pursuit of best environmental practice makes sound commercial sense.

We recognise that our business activities have direct and indirect environmental impacts, and endeavour to manage these in a responsible manner. We are committed to a programme of continuous improvement to minimise our impacts on the environment and will also encourage our business partners and members of the wider community, of which we are a part, to reduce theirs.

Our business units throughout the world will seek to apply best practice in environmental management. Through its environmental programme, we will strive to:

• Integrate environmental considerations into
• Development and implementation of corporate policy,
• Business decision making,
• Development and delivery of insurance/investment products and services,
• Purchasing and supplier management;
• Exploit opportunities to maximise efficiency and minimise environmental impact through our working practices, in areas such as energy management, paper usage, waste reduction and recycling, and communications;
• Manage our buildings and facilities by integrating measurable, monitored environmental actions into our business plans;
• Develop human resources policies which will raise awareness, encourage and enable staff to make an effective contribution to environmental improvement, both in work and within the local community;
• Promote environmental best practice amongst our clients and the broader community, as appropriate;
• Participate in external initiatives designed to improve environmental awareness and performance.

We will periodically review our performance worldwide to ensure that we are meeting our policy goals and we will publish reports regularly.

In Aviva, we fully recognise that we each have our part to play in contributing to environmental improvement. We readily accept our corporate commitments and will continuously work to demonstrate responsibility in all environmental, social and community issues.

Purpose The policy statement makes clear to the widest internal and external audience Aviva's recognition of the significance of the environmental challenge for its business and for society and shows how it will engage to meet the various challenges and opportunities.

Scope The policy statement applies to every business unit in the group. Fulfilment of the policy depends upon each member of staff playing their part as appropriate, from the group chief executive to each individual in the business units.

Responsibilities

• The group chief executive is the sponsor of the group's environmental programme.
• The group company secretary reports to him on the environmental programme.
• The director of environmental management directs the programme and reports to the group company secretary.
• Each business unit is responsible for the development of a local programme under the guidance of the director of environmental management in order to ensure that it fulfils the objectives of this policy.

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Managing CO2 Emissions

In 2006 our overall energy consumption increased by 28%. One of the main reasons for this is that we have included more businesses in the assessment, including our RAC and Auto Windscreens fleets and buildings, as well as some of our businesses in Asia and Delta Lloyd in Belgium. In our existing businesses, emissions went up slightly due to a requirement for more business travel and the increased use of air-conditioning in our managed properties.

To make people more aware of the impact our offices are having on the environment, most of our businesses run ‘switch off’ campaigns, using posters and screen savers to encourage people to do just that, especially the security guards when everyone has gone home.

CO2 Emissions

Zero Emissions are on the up Although energy consumption increased, we are pleased to report that our use of zero emissions electricity has also increased and has surpassed the halfway mark, in that 55% of our electricity globally now comes from such sources. This includes wind, mirco-hydro and biomass power. Zero emissions electricity is now used in our businesses in the Czech Republic (17%), the Netherlands (34%), the UK (78%), Ireland (89%) and Germany (100%).

Energy-efficient property management Around the world, we took advantage of both new and refurbishment projects to make environmental savings in our buildings. In Australia, our sustainable practices included re-using materials, recycling waste, using natural heat and light and installing light sensors in our meeting rooms and offices. In the UK, we made environmental savings through the design and management of our new and refurbished buildings in Norwich, in partnership with our landlords.

Hibernian’s new head office brought all businesses in Dublin into one environmentally efficient building in 2006. Features include low energy lighting, recyclable furniture and carpets and plenty of natural light. New print stations have replaced 400 printers and copiers with just 46 multi-functional devices, saving paper and power and helping people to interact more.

In our business in Boston, USA, new offices were acquired with the environment in mind. The improved working environment offers more energy efficient lighting systems, improved heating ventilation and air conditioning and new ergonomic workstations.

We are also taking steps to reduce the environmental impact of our investment properties. The Morley property team, which is part of our UK-based fund management business, has worked with managing agents to find ways of using less energy, improving recycling and using fewer resources. The team has also learnt more about environmentally-responsible property management, including how to rate properties using the Building Research Establishment’s Environmental Assessment Method and how to use hazardous and sustainable materials responsibly in property management.

Cutting down on travel We try to cut down on business travel wherever we can and also take steps to encourage our people to find responsible ways of commuting to work.

In 2006, we did do more international air travel – it was up by 4% overall on 2005 and short-haul journeys raised emissions by 10%. This was mainly because we were integrating our new acquisitions, such as AmerUs in the USA, and building up our operations in Russia and India. To help us cut down in the future, we are trialling a telepresence project, which is being sponsored by our CEO.

We have also found more immediate ways to cut down on travel and emissions. Due to the improved rail service in the Czech Republic, our people now prefer to go on business trips by train rather than driving. So, train journeys are up four-fold and we have saved 1.2 tonnes of carbon emissions.

Australia has focused on cutting the number of car commuters, with real success. Since 2004, the number of employees walking or cycling to work is up 41% and public transport use is up 13%. They also have an in-house car pooling scheme, added 40 new bike spaces and introduced a walk-to-work group. So, it is no surprise that in 2006, the number of employees driving to work fell by 28%, with car park demand down by 16%.

Some of our businesses continue to offer shuttle bus services for employees, for example between public transport and the office buildings in the UK. Norwich Union’s shuttle buses, which make 3,200 trips a week, saved people driving to the office and cut carbon emissions by 27 tonnes a year. It is envisaged that savings will be even higher in 2007 when people switch to the Park and Ride scheme. In India, Aviva Global Services provides free “pick-up and drop-off” transport facilities for all employees. (4)

Waste & Paper Management

Waste Management

Across the group we recycle 59% of our waste, a slight decrease on last year’s total, but this is because we now include new businesses and businesses reporting for the first time. For existing business, recycling increased from 61% in 2005 to 73% in 2006. Some of our businesses are still not able to recycle, either because they haven’t got the storage space or because they are in countries that do not yet support recycling.

Our businesses are still making good progress. The binless office concept has been such a success at Norwich Union and Aviva head office that other businesses are now trying it out. As a result, Morley increased its recycling figures in 2006 and Aviva Australia piloted the binless office concept on one of its head office floors. The pilot was a success with over 86% of respondents believing it was a good idea. It will be rolled out to all head office staff in 2007.

Aviva France has maintained its near 100% recycling rate. This was helped by the continued use of dual bins for each desk which allowed it to sort paper and cardboard desk waste. An external recycling company manages and treats company waste – separating waste into canteen waste, neon, battery, paper and cardboards, pallets, etc In addition, the use of recycled printer cartridges is being tested in the business with the intention of implementation across the company.

AutoWindscreen, the only UK windscreen replacement company to manufacture windscreens, produce 250,000 windscreens per year and recycled 7,018 tonnes of glass in 2006. But, to avoid unnecessary replacements when a simple repair would stop the damage spreading, they encourage drivers to repair any stone chips as soon as the damage is done. Forty damaged windscreens would fill a skip, but the equivalent waste from windscreen repairs would fit in the palm of your hand.

In India, Aviva has found several ways to improve waste management. Apart from collecting newspapers for recycling, they sent around 880 used printer cartridges back to the supplier, so they can eventually be turned into items like pens and clips. They also ask contractors doing interior work to turn waste wood into furniture items which can be donated to places like schools for underprivileged children.

For the third consecutive year, Aviva head office received the City of London’s Platinum award in its Clean City Awards for its responsible waste management practices. Also, for the first time, Morley received the same prestigious Platinum award in the same scheme.

Paper use Paper is a big part of our business and, although paper consumption increased to 8,132 tonnes in 2006 from 7,809 tonnes in 2005, we are constantly looking for ways to use less – and to use paper with recycled content.

In France, our life insurance business is changing the way it does business to cut paper out all together. The ‘starification’ scheme, or paperless office, now allows business to be done online instead. The sales force get most of their information via an intranet portal. They communicate with customers via email and transfers and payments are done online as well. It seems to be a success all round – it has not only cut out paper and faxes, but it is more accurate and efficient and will be extended to other parts of the business during the year.

In Australia, Aviva achieved its target of reducing paper use per person to below 10,000 pages, cutting it to 9,568 in 2006. Many of our businesses, including those in Spain, the Czech Republic and Poland, find that the easiest way to cut down on paper is to encourage double-sided printing. Some offices, such as Delta Lloyd in Germany and the Netherlands and Aviva’s head office, have set their printers to double-sided printing as standard.

Where we still use paper, we try to make sure it includes recycled content. In 2006 our use of recycled paper went up by 46%. Recycled photocopier paper is used in both Australia and the UK, while Italy uses recycled paper for all its product literature.

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The World's First Carbon Neutral Insurance Company

To show just how much we want to limit our impact on the environment, in December 2006 we committed to becoming the first insurer to be carbon neutral worldwide. It is a big step, and we will not pretend it will be easy. We have already made a good start by becoming more energy efficient and using more zero emissions electricity. In fact, 55% of the electricity we use globally already comes from zero emissions sources.

Essential business travel and buildings that have to be powered by non-renewable sources mean that we still generate about 125,000 tonnes worldwide. We cannot bring that down to zero, so we are going to offset it. How? By investing in projects that generate carbon credits, such as energy efficiency, fuel displacement and carbon-free energy sources such as wind power.

This is a big challenge, but we believe that climate change is the most important environmental issue that the world faces. As a forward-thinking company, we are doing our bit to address this issue and encourage other businesses to follow suit.

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Sources

• 1. AVIVA and the Environment
• 2. The Environment
• 3. Environmental Policy
• 4. Managing CO2 Emissions
• 5. Waste & Paper Management
• 6. Carbon Neutral Case Study