Embed ESG into your business model - advice from Aviva Investors

Nathan Adams is a Senior HR Director with specialism in capability development, HR leadership, and large-scale change management. As People Director at Aviva Investors, he and his team play a key role in embedding the company’s ESG philosophy both internally and externally.

Nathan brings almost 20 years’ experience in the sector, including seven years at Aviva, to his ESG discussion with BIE. Here, he speaks about Aviva’s ESG approach, ambitions and its benefits, as well as sharing key learnings about how to strengthen both ESG and diversity and inclusion (D&I) in organisations.

What role does ESG play in your business?

ESG is at the heart of our business model. Wherever we invest, we want to ensure that the businesses we invest in are sustainable. There are lots of ways we can achieve this, from using our voting rights as a major shareholder in companies to the areas where we allocate capital on our clients’ behalf. D&I plays a huge role in that.

We don’t just look at financial returns from our investments, although clearly that remains a key factor. But we look to take a broader view – and this has a ripple effect. If you say to an investee company that they will be assessed on their ESG credentials, their board and executive team will start to think differently about their carbon footprint and D&I record. 

This goes both ways. We also have to exemplify the behaviours and philosophy we want in the businesses we invest in – and businesses are keen to engage with us on this basis. Increasingly, our clients – which range from large pension schemes to major financial institutions – ask us questions about the diversity mix of our business, including of our investment teams who will manage their assets.

Our approach is to integrate ESG in everything we do, from investments and recruitment to how we think and deliver. Responsible investment is a key part of our heritage, stretching back to the early 1970s, but we continually strive to make improvements across our organisation and to make sure we’ve got the right capabilities and focus to deliver it.

What are the benefits of driving an ESG agenda?

We deeply embed both ESG and D&I into our organisation because we want our business to be sustainable. This isn’t simply the right thing to do from an ethical perspective; research shows in a range of sectors that having greater diversity has a positive impact on performance.

As I mentioned, it helps us win business; ESG and D&I are important criteria for consideration to companies looking for asset managers.

It helps us win business and is a key factor in our ability to attract and retain talent. The generation that’s coming up, for example, is more likely to pick a socially and environmentally conscious organisation over one that’s lacking in these areas.

How does D&I fit in? Is it about policy or proactivity?

D&I is driven through policy and regulation at the top level, but at an organisation level it is imperative that we take the initiative and drive it further.

We want to create a culture of inclusion. To achieve that, we look at D&I across three main areas: internal talent, recruitment, and inclusion from a cultural perspective; ESG and clients; and corporate social responsibility.  

Ultimately, we’re driving ESG – and D&I fits into that. But it works the other way around as well. It’s all intertwined.

What’s your advice for strengthening ESG and D&I within organisations?

It takes investment in time and resources. My advice boils down to this: make strong commitments, get the buy-in from your key stakeholders, and start the work. There are four main elements to this.

1. Bring people together: Create a group to identify and address the issue, ensuring you’ve got representatives across the business - and think big. Yes, you need HR and governance, but you also want the involvement and engagement from many other people who will have expertise or genuine interest in the issues. Get that group together and have conversations about how to drive sustainability and D&I. Make more connections across the organisation. Learn from each other. Ask questions of what you want to achieve, how you are going to achieve it, and then turn that talk into action. Many small steps can help you make a lot of progress.
   
   
2. Use data, but focus on culture: Data helps you measure, evaluate, and understand your organisation. It’s important, and can help us improve. But there’s a limit on its usefulness. There’s data you simply won’t be able to get – you can’t ask people to volunteer it or, worse still, demand it. What’s going to make a difference is how people feel. It comes down to culture.
   
   
3. Set targets, but keep your eye on the bigger picture: You will spend a lot of time aiming for specific targets. But remember the numbers aren’t the aim, they just get you started. You might want to see a 30% increase in female hires, for example – but the drive behind that aim is what you’re really trying to achieve, which is a gender-balanced organisation. So set commitments and work out what that means in terms of action. Embed that aim in micro discussions, but always keep thinking about the big picture and moving towards it.
   
   
4. Constantly map your progress and stay flexible: If you’re lucky, then, like us, you have a real internal appetite for ESG and D&I. There might even be a wealth of initiatives you’re pursuing, all of which take time, investment, and effort. Just make sure you constantly examine them – that they’re doing what you want them to. And be willing to scale some programmes up, and some down if necessary. In short: stay agile and be willing to rebalance things to achieve the outcomes you want.

Any final thoughts?

It’s critical to help people be the best they can be. Embrace training. Everyone can benefit from additional learning – from the C-suite down. There is a lot of truth in the old adage that the tone is set from the top – setting the right example is important in developing a great culture.

Across the sector, ESG and D&I are becoming a key focus. Some companies are doing things better than others. But there’s no one right solution. Each approach needs a certain amount of tailoring to fit your organisation and meet its particular needs. It comes down to inclusion, the culture you create, and the buy-in you get from the organisation to make the changes stick. It’s not just about meeting targets and doing things. It’s about doing the right things.