News Business & Policy Multinational Insurer Aims for Net-Zero, But What Does Net-Zero Really Mean? Insurance giant Aviva has pledged to hit net-zero by 2030. By Sami Grover Sami Grover Twitter Writer University of Hull University of Copenhagen Sami Grover is a writer and self-described “environmental do-gooder,” now advising community organizations. Learn about our editorial process Fact checked by Haley Mast Fact checked by Haley Mast on March 02, 2021 LinkedIn Harvard University Extension School Haley Mast is a writer, fact checker, and conservationist with a certification in sustainability. Learn about our fact checking process on March 2, 2021 05:58PM EST Mischa Keijser / Getty Images Share Twitter Pinterest Email News Environment Business & Policy Science Animals Home & Design Current Events Treehugger Voices Last month, former Bank of England governor Mark Carney kicked off somewhat of a firestorm by suggesting his employer’s investments were net-zero emissions, even though the company continued to invest in coal. The theory Carney was pushing was that because Brookfield, where he serves as vice-chair, invests massively in renewables, the emissions that those technologies avoid could be considered to "cancel out" emissions from the fossil fuels it owns. It did not go down well with many climate scientists and activists, who argued that giving companies credit for "avoided emissions" is a slippery slope that would allow fossil-fueled business as usual, just as long as we throw enough dollars at renewables too. It’s a debate that’s likely to continue, as net-zero emissions pledges are coming thick and fast from all corners of the economy. What Is Net-Zero? Net-zero is a scenario in which human-caused greenhouse gas emissions are reduced as much as possible, with those that remain being balanced out by the removal of greenhouse gas emissions from the atmosphere. Insurance Giant Aviva Makes a Pledge The latest one of note is offered by UK insurance giant Aviva, which has pledged to hit net-zero in its own supply chain and operations by 2030, and then to reach net-zero across its investment portfolio a decade later. Given how far off 2040 is though, and in how much trouble we’ll be if we wait until then to make progress, Aviva is also announcing more immediate decarbonization steps. These include: Investing $14 billion of assets into low carbon strategies by 2022. Investing $8.4 billion in green assets, including $2 billion of policyholder monies into climate transition funds, by 2025. Investing $3.5 billion in low carbon and renewable energy infrastructure, and delivering $1.4 billion of carbon transition loans, by 2025. Achieving a 100% electric/hybrid company fleet by 2025. Achieving 100% renewable energy by 2030. The company also included some important pledges about coal, which included: Divesting from all companies which make more than 5% of their revenue from coal by 2022. Stopping underwriting insurance for companies making more than 5% of their revenue from coal or unconventional fossil fuels. These last two pledges, however, come with a fairly important caveat – they won’t apply to businesses that have signed up to the Science-Based Targets Initiative. That’s because Aviva believes that engaged ownership, through its Climate Engagement Escalation Program, can help incentivize carbon-intensive industries to do the right thing. It’s all very interesting. A few years ago, before the term net-zero became so commonly and diversely used, the commitments that Aviva is making would have looked like a pretty robust and ambitious climate strategy. Perhaps not the most ambitious in the world, but at least one of those plans that is moving – substantively – in the right direction. Whether and how exactly they reach something that’s truly net-zero, however, is more debatable. And that’s because net-zero is becoming increasingly hard to pin down. The Value of Net-Zero The basic idea behind net-zero does have some logical merit. After all, in the complex, interconnected economy we all operate in, it is extremely difficult – if not impossible – for most companies to achieve anything close to actual zero emissions without essentially shutting down their business. If engaged in genuine good faith, the concept of net-zero offers the potential for business leaders to first cut their own emissions as much as they can, and then to think more broadly about the positive impact they might have. The trouble is, however, that as soon as we open these theoretical floodgates, it inevitably empowers some highly creative accounting. (Remember Shell Oil’s plan to reach net-zero, without stopping production of oil and gas?) I say all this as someone who has recently helped spearhead an effort at my employer, The Redwoods Group, to sign up to the B Corp Climate Collective. This included supporting their pledge for net-zero by 2030. As such, I’ve seen highly credible climate plans from business leaders that come under the banner of net-zero. Increasingly, though, the net-zero element of these commitments is rarely the most important or significant thing. Instead, it’s the specific details about what a company is doing next week, next month, and next year to both drive down its own emissions and move society toward where it needs to be. Ultimately, those of us who care about climate are going to have to do much better than net-zero. And we’ll have to keep an eye on whether the term itself is helping us, or hindering us, in that pursuit. I’ll leave the final word to Dr. Elizabeth Sawin, whose recent insightful quip on Twitter about national pledges, summed up my own thinking on net-zero better than I ever could: Net zero by 2050 is "I want to write a book". Changing investments and incentives today is "I am sitting at my desk and sentences are appearing on the page". All to say it's great so many countries want to write books. What's tomorrow's word count though? — Dr. Elizabeth Sawin (@bethsawin) December 3, 2020 View Article Sources 2040, Aviva. "Aviva Becomes the First Major Insurer Worldwide to Target Net Zero Carbon By 2040." Aviva, 2021. Howley, Victoria, et al. "Aviva Investors Announces Climate Transition Engagement Programme with Commitment to Divest from Non-Responsive Companies." Aviva Investors, 2021.