Aviva plans to become net zero by 2040

The company is committing to investments which tackle climate change

Aviva is set to funnel £10billion of workers' pension money into climate-friendly investments by the end of next year as it plans to become net zero by 2040.

The company is committing a 'substantial' part of the money it collects from auto-enrolment pension funds to investments which tackle climate change.

Every employee over the age of 22 who earns more than £10,000 per year pays into an auto-enrolment pension, unless they opt out.

Aviva serves 3.5m of those workers, who will now be helping to fund the UK's green recovery from the pandemic as £10billion of their retirement savings are used to fund wide range of projects such as energy-efficient housing.

Aviva will also ditch its coal investments, taking the cue from other institutions, such as insurance marketplace Lloyds of London and government-backed pension fund Nest.

It will sell off all its shares in companies which make more than 5 per cent of their revenue from coal, by the end of 2022 – unless they have signed up to the Science Based Targets initiative which helps cut emissions. It will also stop offering insurance for any companies making more than 5 per cent of their revenues from coal.

Aviva's chief executive Amanda Blanc said: Aviva is taking bold steps to help tackle the climate crisis. As the UK's leading insurer, we have a huge responsibility to change the way we invest, insure and serve our customers.

For the world to reach net zero, it's going to take leadership and radical ambition. And it is going to take Aviva to play our part.' Under Blanc's plan, the carbon dioxide emissions from Aviva's own operations and supply chain will hit net zero by 2030, Blanc said.

This will involve buying in 100 per cent renewable electricity for all its offices and swapping the leases on its 1,540-strong vehicle fleet from diesel-based cars to all electric and hybrid models. By 2040, Aviva's entire investment portfolio will be net zero on carbon dioxide emissions.