What is sustainable investing?
When you invest sustainably, you can help try and change the world for the better - while also potentially making a positive return.
At Aviva, we define sustainable investing as ‘an approach to investing that incorporates environmental, social and governance (ESG) factors into investment decisions, to better manage risk and with the aim to generate sustainable, long-term returns’.
Investing sustainably means investing in companies that are aware of the environment, their employees and their customers. That could mean businesses which have a positive work culture and treat their employees well, or those creating clean, sustainable energy using wind farms or solar panels.
If you want, you can also invest in line with your values. For example, by excluding industries like tobacco and gambling. Investing in this way is referred to as ethical investing. Making a profit isn't the priority with ethical investing.
Remember, as with other funds, the value of your investment can go down as well as up and you could get back less than invested.
To help people identify funds which invest sustainably, the FCA and other regulators are introducing sustainable labels for funds. These are intended to help you choose investments that suit your priorities.
The three 'ESG' measures we use to help us invest sustainably
Sustainable investing looks at business credentials across three measures: the environment, societal issues and how businesses are run (their governance). We describe these factors in detail below.
Environmental issues
This includes things like:
- a company’s carbon footprint
- using renewable energy
- a firm's waste management policies
Social issues
This includes things like:
- labour standards among the businesses in a company's supply chain
- secure data protection
- health and safety of employees
Governance
This includes things like:
- conflicts of interest and who's on a company's board of directors
- political lobbying
- bribery and corruption
Our fund choices
Universal Retirement Fund
Our Universal Retirement Fund is designed to give you a simple way to save for retirement, with pension investments you don’t have to manage.
- Your mix of investments will be based on the time left until you retire.
- We’ll change the investments for you so they’re typically less risky as retirement approaches.
- How you take your pension benefits is up to you.
- Look at whether funds take ESG factors into consideration.
Ready-made funds
Ready-made funds are a good option if you're new to investing because they do the hard work for you. All you have to do is choose how risky you want your investments to be.
- Select a portfolio of funds managed by Aviva Investors, our dedicated asset manager.
- While ready-made funds don't necessarily target specific ESG outcomes, looking at how the investments in the funds might impact the climate and society is certainly something we take into consideration when selecting funds for our ready-made list.
Experts’ shortlist
You can pick your funds from our experts' shortlist, which is a list of hand-picked funds that our team think could perform well.
- A list of funds that stand out from the crowd, according to our experts at Aviva Investors.
- Built using a tried-and-tested process with ESG considerations at every step.
- There is also other criteria (not just ESG) that we think about when we choose investments.
Select your own funds
You can build your own customised portfolio by choosing your own funds from the range we have to offer. This is for confident investors.
- Research and pick your own investments.
- Use filters to fine-tune the credentials of the funds you’ve chosen.
- Choose funds that our experts have rated the best for managing the biggest ESG risks and opportunities.
Review your investments and the funds you are invested in regularly.
Common investment strategies
Beyond ESG investing, there are other strategies you can consider when investing. Here are some of the common ones.
Ethical investing
Investing that's driven by your ethics, and aims to drive personal social and environmental outcomes, and avoid controversial industries, like alcohol or tobacco. This is based on your personal views. Please note that financial performance is not priority of ethical investing.
Impact investing
Investing in funds that aim to deliver positive social or environmental outcomes, such as tackling climate change.
Thematic investing
Investing into companies that support a particular theme for example Shariah Law and Cybersecurity.
Sustainable investing
ESG fund managers consider and integrate environmental, social and governance issues as part of their wider research, as they think managing ESG risks is key to the long-term performance of a company.
Sustainability labelling
As well as considering ESG factors, there are other strategies and information you can use like sustainability labelling and consumer-facing disclosures (they're are provided to outline the sustainability features of an investment) which are there to help you compare different funds.
Investment preference tool
Use our investment preference tool to find funds that match your values across environmental, social and governance (ESG) issues. Capital at risk.
Frequently asked questions
Are returns from sustainable investments lower?
Open an account
Invest directly through our three investment products.
Aviva Stocks & Shares ISA
Keep your investments tax-efficient with our ISA. Tax treatment depends on your individual circumstances and may be subject to change in the future.
Aviva Investment Account
Used up your ISA allowance? Keep investing with our general investment account.
Aviva Pension
Plan for your retirement your way with our self-invested pension.
Learn more about investments
Not sure if you should invest? Our educational articles will help you learn more.
Top up your knowledge
Keen to understand more about funds and investment risk, or learn all about ISAs? Our articles can help beginners and keen investors understand more about the world of investing.
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