Big changes at AVIVA - is this another downgrade?
This was received from the CEO of Aviva. To us it looks like another downgrade.
From: Paul Abberley,
Chief Executive Aviva Investors London and Global Investment Solutions
In summary, we are proposing to:
1. Move out of our Sustainable and Responsible Investment (SRI) funds, and potentially look for a new institutional home for the funds, the clients and the majority of the team;
2. Reduce the stand alone resource allocated to corporate governance engagement; and,
3. Establish a new Global Responsible Investment team that will cover Environmental, Social and Governance (ESG) issues across the mainstream business.
Aviva Investors is extremely well recognised in SRI and Corporate Governance, and we have award winning teams in both areas. However, the Business Review is proposing to reduce the scope of active equity management in London, focusing on the core market in each of its four regions. As a result, we have come to the view that there could be better growth opportunities for the actively screened SRI funds in an alternative fund manager with a different business model. Of course, as a responsible asset manager, we recognise our duty of care to our clients and I can assure you that we will continue to fulfill that duty while we explore options for the SRI funds.
The affected individuals in the Corporate Governance and SRI teams have been informed that they are at risk of redundancy, and we are currently consulting them on these proposals.
In addition to the SRI team, we have also announced our intention to close other equity desks, which will result in fewer corporate actions to support. Accordingly we are proposing to reduce the size of the Corporate Governance team in London.
While these are difficult times, I remain committed to our principles of responsible investment. Consequently, I have taken the opportunity presented by the review to rethink and refocus the way we embed Environmental, Social and Governance (ESG) in the business. In future, the plan is that ESG engagement and integration will apply across all our mainstream assets under management. I will work to ensure that ESG will be integrated within all portfolios by all analysts and fund managers. They will be provided with directly relevant investment information by our brokers and our independent research providers. I will expect them to be able to demonstrate engagement with these issues and will be rewarding them accordingly.
Our plans also include the establishment of a new Global Responsible Investment Team. This team will report to me and be responsible for developing our Responsible Investment strategy and policy across all assets under management. It will be headed by Steve Waygood, in the newly created role of Chief Responsible Investment Officer, advised by Anita Skipper who will support corporate governance strategy and policy. The GRI team will include a further four members from the existing SRI and Corporate Governance teams.
The team will be further augmented by a network of Responsible Investment Officers. These individuals will be working throughout the business, and will be asked to and rewarded for working for a few days per month in helping to lead the Responsible Investment issues relevant to their own asset class and product range.
I would also like to reaffirm our strong commitment to our public policy work that is aimed at making capitalism more sustainable. Over the past few years I have seen for myself the power that Aviva Investors has to move markets. I strongly believe we must continue to build on the significant level of work that we have done in recent years.
Finally, I would like to take this opportunity to thank the SRI and Corporate Governance teams for their work. Over the past decade and more they have pioneered many new areas of corporate governance and SRI and have developed an outstanding reputation for their work. This reputation should be of considerable help to them in future. And we will of course work with them to support them in finding new roles elsewhere wherever this becomes necessary.
Paul Abberley
Aviva Investors
No. 1 Poultry, London EC2R 8EJ
