Aviva CEO: renewable investments at risk as UK’s net zero progress is ‘stalling’

After years of being seen as a leader in climate action, the UK’s position in climate change mitigation is starting to slip.

That is the stark warning from Amanda Blanc, the group chief executive officer of British insurance giant Aviva, who is calling for more investments in clean energy and the phasing out of fossil fuels.

Whilst UK climate policy has been relatively slow and many believe it lacks comprehensive detail, it has continued to develop over the past year, including new details on the Carbon Budget Delivery Plan, Net Zero Growth Plan and the Energy Security Plan. 

"However, the recent dilution in the government's net zero commitments means meeting future targets is an even bigger challenge and creates uncertainty, potentially risking the opportunity for UK businesses to capitalise on green growth," Blanc said.

Blanc, who has been Aviva's chief executive since July 2020, thinks "that the UK’s international leadership in tackling climate change may be at risk as the government increasingly focuses on short-term energy security over long-term sustainability."

For example, the Britain's decision to proactively expand domestic oil and gas production is a worrying shift. 

"If the UK’s performance is to improve, a greater focus is required on phasing out fossil fuel extraction, improving buildings’ energy efficiency and expanding renewables," Blanc noted.

The UK is Europe’s second-largest oil and gas producer, and the country’s lack of a policy framework to phase out oil and gas extraction is an area of concern.

"The UK’s ambitious climate goals are under threat due to a lack of practical and detailed plans. This puts at risk additional investments the UK requires to become more climate ready," Blanc warned.

“I am worried that UK climate action has stalled this year," she said, referring to an index of the world's largest economies, compiled by Aviva, whose investment arm has around £221 billion in assets under management in equities, fixed income, property and multi-asset.

The Index assesses how climate-ready a country is across four key areas, namely emissions and mitigations, environment and adaptation, economy & business as well as society and community.

Across the four pillars the Index tracks 11 measures on how each country is doing in areas such as reducing emissions, supporting biodiversity, building climate-resilient infrastructure, helping communities and small businesses prepare, and helping other countries in the world adapt, Aviva said in an explainer.

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Despite the complex net zero ecosystem in Britain, Blanc can see UK businesses trying to address the climate challenge in greater numbers and putting action plans in place.

"We urgently need a UK, whole economy, transition plan which allows us to compete more effectively with the US Inflation Reduction Act and help the UK become the most climate-ready major economy by 2030," she stressed.

Blanc is urging the UK government to accelerate the transformation of the UK economy, and wider financial system, so that the UK can be the most climate-ready large economy by 2030. 

In particular, she is calling the UK government to create an environment of widespread net zero transition planning across the UK economy. 

She is convinced this should be achieved by releasing a comprehensive national Climate Transition Plan and reporting against delivery annually to provide businesses with greater policy certainty and confidence to invest in UK green industries.

Moreover, Blanc calls for expanding existing sustainability reporting requirements to ensure robust and credible transition planning by listed businesses, financial institutions and large corporates, in line with the Transition Plan Taskforce’s gold standard framework.

"Being ‘climate-ready’ means reducing our carbon emissions to limit further damage to the climate and adapting how we live and work to protect ourselves from the negative effects of climate change, both at a local level and as part of the global community," she continued.

"Therefore we will track the progress the UK makes, alongside the other large economies in the G7, plus Ireland as the only country with whom we share a land border, through our Climate-Ready Index."

Moreover, Blanc concluded that "over coming months and years, we will announce a range of actions it will take and support it will give to help enable the UK to be more climate-ready as we seek to help make the UK the most climate-ready large economy in the G7 by 2030."

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