Steve Waygood, Chief Responsible Investment Officer at Aviva Investors, tells us that whilst Paris is synonymous with Valentine’s Day, this year he’s thinking about the city in an entirely different context. Here’s why…
In amongst the froth and roses and marriage proposals, the Climate Coalition is asking everyone to ‘show the love’ for something they value that is threatened by global warming. It is particularly poignant as we are approaching the global climate change summit in Paris this December with the hope of a new deal to tackle the issue.
Naturally, the Coalition – forged of over 100 organisations with a common aim to tackle climate change – hopes you will take a moment to consider the future of the world we live in, and show your love for whatever you choose.
In my career, I’ve had the privilege to work in many inspiring places not least as a Climate Coalition member and at WWF-UK. So I and Aviva Investors, where I work now, wholeheartedly support the Coalition’s Show The Love activities around Valentine’s day.
As a company, Aviva’s job on a daily basis is to help protect what we love by helping people understand and manage risk.
We’ve realised that the biggest market failure that we face is climate change, which is already having an effect in the UK and around the world. We also know we have a massive opportunity to make sure that we keep the rise in global temperatures below 2o degrees celsius if we act now.
While the scientific evidence shows that urgent action is needed, world leaders have been slow to reach agreement on how to tackle climate change. In 2015 world leaders have an opportunity to catch up with the scientific community and the general public when they meet in Paris in December to negotiate a new international climate change deal which will come into effect in 2020.
While the world waits for the politicians to catch up with the scientists, our global carbon dioxide (CO2) emissions continue to grow. Rather than wait for what may or may not be agreed in Paris, Aviva, like other forward thinking businesses, understands the science and urgency, and is playing a leading role in driving change within the capital markets. We have published our first report associated with the UN’s drive to generate a sustainable financial system, and have already changed the way we do business.
Industry today, in the main, behaves as if an endless supply of natural resources exists. The damage this inflicts is of course literal, but also it puts us all at huge risk. Left unchecked, climate change will continue to affect the actuarial assumptions underpinning the insurance products that our industry provides. It will make significant proportions of the economy uninsurable. And it could affect the long term success of many of the companies and economies in which we invest.
Over coming decades, climate change presents solvency issues to businesses in many different industries, and increases uncertainty. There is now a clear direction of travel of policy, technology with demand and other pricing drivers that will influence the transition to a lower carbon economy. However, there is a significant gap between the current trajectory of change and the scale and pace of change that the climate science suggests is necessary. This is of profound concern to us.
It is for governments around the world to correct this market failure. We know that 2015 is an important year for the climate negotiations, and we would like to do what we can to help ensure a positive outcome.
This is why Aviva is putting so much effort into engaging with the policy makers who will be at Paris and who are in charge of correcting this market failure in order to ensure that they do their job. We also engage with the companies in which we invest to promote lower carbon business behaviour that respects the living planet that we all love and depend on.
What drives us at Aviva is the creation of a more resilient future, being a good ancestor to future generations. We’ve realised that it is in our interests to manage the effects of climate change so that certain risks can be insured, and opportunities taken.
This helps us show the love to our customers and the planet and enables us to show that as a business we care more. We would encourage everyone together to take this opportunity to reflect on what they value the most this Valentine’s Day.
Watch the Ridley Scott Foundation’s film ‘show the love’ as part of the Climate Coalition’s campaign.
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