Aviva Pension Index Fund Changes - ESG Applied

Sea_Shell

Which listed companies are the "top 10" worst offenders when it comes to being non-ESG compliant?  Anyone know?  

Are these companies shares available via Aviva?  (Or other platforms)

If so, can that last, or will they all be eventually "blacklisted"?   Along with those  who do hold investments with the "wrong" companies?

GazzaBloom

Sea_Shell said:

"Aviva have surveyed employers and suggest that 80% of employers want pensions funds to be ESG compliant."


Probably because the boards of those companies also need to be seen to be compliant...so they themselves can't be accused of being "bad".


Is ESG a worldwide "thing"?   Who's behind it?

At the risk of being "cancelled" and banished to Hell....

It's akin to putting lipstick on a pig for some companies, just window dressing, greenwashing to look good rather than actually changing for the good of the planet or society.

Sea_Shell

Google tells me BAT actually have the 3rd highest ESG score in the FTSE.   Go figure!! 

https://www.hl.co.uk/news/articles/archive/ftse-100-the-5-highest-esg-rated-companies


Hmmmm

jimjames

jim1999 said:

jimjames said:

jim1999 said:

I've not seen anything about Aviva doing this.  Is this an employer pension or a personal one?  I'm wondering if it's something your employer has kicked off?

Good question, it is an employer pension scheme but the letter doesn't say it's been directed from the employer just that all index funds are now excluding firms that don't meet ESG factors. It does mean that these funds are no longer proper index trackers. FTSE100 for example without tobacco, defence or oil gives a very different profile to the fund. There appears to be no option to choose a real tracker that actually includes all the companies in the index.

My instinct would be that it's your employer, although can't imagine why they've decided not to mention that.

I've checked and it isn't the employer but being done by Aviva. Details below. @GazzaBloom you're correct it doesn't mention oil - strange that coal is included but not oil.  

It appears there will be no way to invest in an index tracker with Aviva after November 2023. A FTSE 100 tracker without these companies is not a FTSE tracker anymore so will be interesting to see how Aviva badge it.

I'm going to take this further. I don't think it should be forced on us and remove the option to invest in tracker funds.

“Changes to our Blackrock Tracker fund range

We are making changes to how some of our BlackRock tracker funds are invested by introducing a custom screen on the funds’ existing benchmarks to exclude certain companies. We believe these changes will be in the long-term interest of our customers.

The funds will be excluding certain companies which are involved in activities that do not meet our Aviva Baseline Exclusion Policy. These companies might be involved in coal production, weapons/arms, and tobacco production. The changes are expected to be made by the end of November 2023.”

dunstonh

Are these companies shares available via Aviva?  (Or other platforms)

Aviva platform is whole of market.   So, Aviva are not restricting it on individual plans.

ESG is getting a lot of support from the EU and forms part of a number of EU directives. e.g. the CSRD, EU Taxonomy, and Sustainable Finance Disclosure Regulation (SFDR)

https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en

And companies outside of the EU that do business in the EU are also covered by the rules.    The CSRD is effectively becoming the global disclosure regulation.

So, you have enormous pressure on companies to not only do something but also to be seen to do something.  i.e. if they force their occupational pension to be ESG only, then they can sing about it in their public disclosures.  It's an easy win for the company directors as probably 95% of their employees don't look at the investments in their pension.   Virtue signalling.

Pat38493

Have they attempted to justify why the customers should pay a one off charge for an entirely voluntary decision on their part

jimjames

dunstonh said:

Are these companies shares available via Aviva?  (Or other platforms)

 It's an easy win for the company directors as probably 95% of their employees don't look at the investments in their pension.   Virtue signalling.

I think that is part of the problem. I suspect I'm in the minority of building my own portfolio using tracker funds rather than just accepting the default Aviva managed fund that new starters get signed into. They'll already have this without even knowing.

@dunstonh Any suggestions for the best way to dispute it? Complaint to Aviva then who? FCA/Pension regulator?

GazzaBloom

Pat38493 said:

Have they attempted to justify why the customers should pay a one off charge for an entirely voluntary decision on their part

Nope, I can't imagine that the Aviva ESG bright ideas club gave much care for the customers having to pay for their latest marketing initiative, as they sat around patting themselves on the back and giggling at the smell of their own fanciful farts over another meeting room buffet lunch 

dunstonh

@dunstonh Any suggestions for the best way to dispute it? Complaint to Aviva then who? FCA/Pension regulator?

I don't think the FCA is of much use as they have jumped onto the woke bandwagon.   TPR wont care as they will say providers are free to offer the funds they want and the employer is free to chose the provider.

Aviva and the employer are your places to complain.   You will get fobbed off though.

jimjames

dunstonh said:

@dunstonh Any suggestions for the best way to dispute it? Complaint to Aviva then who? FCA/Pension regulator?

I don't think the FCA is of much use as they have jumped onto the woke bandwagon.   TPR wont care as they will say providers are free to offer the funds they want and the employer is free to chose the provider.

Aviva and the employer are your places to complain.   You will get fobbed off though.

Thanks. Trying the media as well, external pressure might possibly do something if they're saying they won't invest in successful UK companies.