UK Insurer Aviva Plans to Become Net-Zero Carbon Emissions Company by 2040

British insurer Aviva plans to become a net zero carbon emissions company by 2040, it said on Monday, claiming this was the most demanding target set by any major insurer worldwide.

Following the 2015 Paris Agreement on climate change, many countries and companies are aiming for net zero carbon emissions by 2050, to limit global warming to 1.5 degrees Celsius above pre-industrial norms.

The insurer plans to reach net zero carbon emissions from its investments by 2040 and net zero from its own operations and supply chain by 2030.

“For the world to reach net zero, it’s going to take leadership and radical ambition,” Aviva Chief Executive Amanda Blanc said in a statement.

Aviva’s plans include expanding green investments and switching to renewable electricity in its offices and to electric or hybrid vehicles in its motor fleet.

Aviva will by the end of this year stop underwriting insurance for companies making more than 5% of their revenue from coal or “unconventional” fossil fuels such as shale gas, unless they have signed up to the Science Based Targets initiative, an NGO-led group that signs off on corporate climate plans.

Aviva also plans to divest from such companies by the end of 2022, unless they sign up to the initiative.

However, Lucie Pinson, director of NGO group Reclaim Finance, said the proposals did not go far enough.

“If Aviva wants its net zero target to have teeth, it must immediately rule out all investments and coverage in companies developing new coal and fossil fuel projects.”

Investors are stepping up their efforts ahead of COP26 climate talks in Scotland later this year, where countries will look to accelerate the fight against global warming.

Aviva is one of more than 30 members of the United Nations-convened Net-Zero Asset Owner Alliance, which also includes European insurers Allianz, AXA, Generali and Zurich.

The group’s members last year committed to setting tougher carbon limits on their portfolios.

Elsewhere, the New York state pension fund also committed in December to transition its investments to net zero by 2040, making it the first U.S. pension fund to set the goal by that date.

(Additional reporting by Simon Jessop; editing by Susan Fenton, Kirsten Donovan)