Obligations to consider climate risk in relation to the investments of the Aviva Staff Pension Scheme

ClientEarth warns the Aviva Staff Pension Scheme trustees that treating climate change as a general ESG issue rather than a specific material financial risk may expose them to legal challenges for breach of fiduciary duty. The letter outlines the financial risks of high-carbon assets, the opportunities in the low-carbon transition, and emerging market standards among OECD asset owners. It provides a detailed set of recommended actions, including reallocating capital away from coal and risky fossil fuels, adopting TCFD-aligned reporting, and implementing active stewardship policies to ensure the long-term security of members' retirement outcomes.

• Trustees have a legal obligation to act in the best interests of members, which includes considering climate change as a "potentially material investment risk" and assessing the exposure of both scheme assets and the scheme sponsor to such risks.
• Financial risks from climate change are already manifesting, with European power utilities seeing rapid share price declines and the Bank of England warning of "systemic financial risks" if the energy transition is not approached proactively.
• Fossil fuel assets, particularly coal, are highly exposed to risk; 54% of EU coal power assets already have negative cash flow, a figure expected to reach 97% by 2030.
• Climate-aware investing does not necessarily reduce returns or limit diversification; analysis of the S&P 500 from 1926 to 2017 showed the impact of excluding any of the 10 main market sectors was "negligible", and some low-carbon indices outperformed the MSCI ACWI benchmark up to 2016.
• A review of 30 asset owners in OECD countries (excluding the US) indicates that 67% have divestment policies in place, and investors representing USD 6 trillion in assets have committed to divesting from fossil fuels, with pension funds accounting for half of that amount.
• ClientEarth recommends specific actions for the scheme, including ceasing new investment in coal and risky fossil fuels (such as tar sands and arctic exploration), moving passive investments to low-carbon indices, and requiring portfolio companies to align strategies with the Paris agreement.

APA

ClientEarth (2018). Obligations to consider climate risk in relation to the investments of the Aviva Staff Pension Scheme. https://www.clientearth.org/media/urpnnoks/aviva-staff-pension-fund-legal-letter-ce-en.pdf

Chicago

ClientEarth. Obligations to consider climate risk in relation to the investments of the Aviva Staff Pension Scheme. 2018. https://www.clientearth.org/media/urpnnoks/aviva-staff-pension-fund-legal-letter-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Obligations to consider climate risk in relation to the investments of the Aviva Staff Pension Scheme |date=10 August 2018 |url=https://www.clientearth.org/media/urpnnoks/aviva-staff-pension-fund-legal-letter-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018obligations, author = {{ClientEarth}}, title = {{Obligations to consider climate risk in relation to the investments of the Aviva Staff Pension Scheme}}, publisher = {ClientEarth}, year = {2018}, month = aug, url = {https://www.clientearth.org/media/urpnnoks/aviva-staff-pension-fund-legal-letter-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }