Aviva Investors has warned companies not to sacrifice their sustainability goals in response to energy shocks, supply chain disruption, inflation and recession.

Mark Versey, Chief Executive of Aviva Investors, has set out the expectation in his annual letter to the chairpersons of companies where Aviva Investors is a shareholder or bondholder. He said the firm’s stewardship priorities this year will focus on how companies tackle the cost of living crisis, the transition to a low carbon economy and reversing nature loss. The letter, was sent to around 1,600 companies in 31 countries, outlined clear ways in which businesses can address these issues.

Aviva Investors sets out 2023 stewardship priorities:

• Expects companies to develop and publish robust and viable climate transition plans to support decarbonisation in just and inclusive manner

• Will look unfavourably on attempts to protect profitability and returns through disproportionate transfer of costs to employees, suppliers and customers

• Expects all companies to begin reporting within a reasonable timeframe against the Taskforce on Nature-related Financial Disclosures (TNFD)

• Voted against the re-election of directors at 107 companies for lack of progress on ethnic diversity in 2022

• Voted against directors at 71 companies for insufficient policies and targets on biodiversity in 2022

Aviva Investors says it will hold boards and individual directors accountable at companies where the pace of change against these priorities is too slow.

The firm undertook 1425 substantive engagements in 2022 and voted at 6732 (2021: 6648) shareholder meetings – rejecting 26.2 per cent (2021: 26.6 per cent) of management proposals tabled. ShareAction ranked Aviva Investors ninth globally for its voting record on the most significant environmental (88 per cent) and social (96 per cent) shareholder resolutions of last year.

Aviva Investors voted against 134 companies in 2022 for insufficient progress or disclosure on climate change, compared to 165 companies the previous year.

In 2022, Aviva Investors voted against the re-election of directors at 107 companies (2021: 137) for lack of progress on ethnic diversity and opposed directors at 51 companies due to human rights concerns (2021: 85). The firm also rejected 35 per cent (2021: 33 per cent) and 73 per cent (2021: 68 per cent) of executive pay proposals in the UK and US, respectively, on concerns over quantum and structure. Aviva Investors voted against directors at 71 companies for insufficient policies and targets on biodiversity.