Stewardship investing

Exclusion and investment

The philosophy behind the Sustainable Stewardship Funds has always been, and remains, to guide capital allocation responsibly, and therefore to exclude or to include companies in the Funds based on what they do and how they do it.

The guiding sustainability principles of the Sustainable Stewardship Funds are to:

• Avoid companies that do not meet certain ethical standards, or that harm society or the environment. 
• Support companies that make a positive contribution through investment.
• Encourage leading business practices. 

Alignment of the Funds with the United Nations (UN’s) Sustainable Development Goals

The UN’s 17 Sustainable Development Goals, also referred to as the SDGs, are used as the framework by the investment team to select companies for the Sustainable Stewardship Funds. We believe that this helps to demonstrate that the funds invest in businesses that are helping to contribute to a sustainable future. We believe that this reflects the changing investment landscape since the launch of the Sustainable Stewardship Funds in 1984.

Read more about the UN’s SDGs here.

The funds’ investment objectives also include an explicit sustainability objective, that is the Funds aim to align their investments with the UN’s 17 Sustainable Development Goals or SDGs.

We also apply exclusion screens to the Sustainable Stewardship Funds. The screens enable us to exclude businesses and industries from the Funds that aren't aligned with the Sustainable Stewardship Philosophy. You can explore the details of this criteria in the Sustainable Stewardship Philosophy document.

Engagement

We work closely with companies to help them improve their sustainable business practices.

Here’s how we do it:

1. Aviva Investors' annual chair letter – Every year, Aviva Investors writes a letter to company chairs. Where they talk about the sustainability priorities that we expect companies to take onboard such as the cost of living crisis and climate change. 
2. Exploring Sustainable Stewardship themes – We create themed programmes that help companies improve when they're not meeting our expectations or encourage them to become leaders in specific areas. Right now, we're diving into two important topics with businesses – diversity and inclusion in the workplace and helping businesses to eradicate single-use plastic.
3. Uniting for positive change – we team up with other stakeholders and encourage them to take part in market-leading collaborative initiatives, such as the 30% club which aims for greater female representation on company boards, to help create change.

Monitoring

We keep an eye on how well the Sustainable Stewardship Funds are doing against non-financial targets such as their carbon intensity and the % of businesses in the Funds with a plan to reduce their carbon emissions. We also monitor the alignment of the Funds with the UN's SDGs.