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AIA accelerates ESG strategy after leaving coal behind

AIA, Asia's largest life and health insurer, has five priorities, or pillars, in its ESG strategy.
AIA accelerates ESG strategy after leaving coal behind

AIA Group has highlighted how it accelerated its Environmental, Social and Governance (ESG) strategy in 2021 in a report  titled “Sustaining Healthier, Longer, Better Lives”.  

“AIA has a responsibility to address material ESG challenges including climate change, access to healthcare, and inequality. With that in mind, our ambition is to take a leading role in contributing to the sustainable development of the region,” said Lee Yuan Siong, AIA Group chief executive and president.

In 2021, Sustainalytics, a firm that produces industry-standard ESG risk ratings for companies, gave AIA a rating that ranked it as one of the top five insurers globally.  AIA’s ESG rating from MSCI, a firm similar to Sustainalytics, also improved from A to AA.

The insurer breaks down its ESG strategy into five pillars — health and wellness; sustainable operations, sustainable investment, people and culture, and effective governance. Each pillar creates a clear separation of AIA’s ESG goals to deliver on its commitments and actionable initiatives.  

INVESTING SUSTAINABLY

Long-term ESG considerations are central to AIA's internal and external investment strategy.

“AIA is committed to embedding ESG best practices across the organisation and within our investment processes,” wrote Mark Konyn, group chief investment officer, in the report.

Like many asset owners and managers, in 2021 AIA committed to achieving net-zero greenhouse gas emissions by 2050, in line with the Paris agreement on climate change.

The sustainable investment pillar of the insurer's ESG strategy aims to deliver long-term value to its members by investing in companies that commit to sustainable outcomes, lowering its exposure to the risk of stranded assets in a future low-carbon economy.

As of October 2021, AIA has no equity or fixed income investments in listed coal mining and coal-fired power businesses, seven years ahead of its original divestment strategy.

The insurer has also cut the carbon footprint of its directly-managed, listed-equity portfolio by 31.4% since 2018.

The company's proprietary ESG rating scorecard enhances its sustainable-investment research process, better guides companies that are aiming to make a real impact and reflects the increasing importance of ESG scores, representing best practice and the insights that these can provide.

In addition, AIA has made investments of $8.6 billion in healthcare bonds and $3.6 billion in ESG bonds, representing a 100% increase year-on-year. It plans to grow these materially in the years ahead.

PEOPLE AND CULTURE

The report highlights that AIA views supporting a diverse and inclusive culture as crucial to embedding ESG fully into its operations. Currently, people from more than 70 nationalities are represented across its global operations

“Our culture brings us together and sets us apart. Our operating philosophy and leadership essentials provide a compass that guides each of us, regardless of where we are and what we do,” said Cara Ang, group chief human resources officer, in the report.

As part of the people and culture pillar in its ESG Strategy, AIA implements fair processes for employment and progression.

Source: AIA Group Limited ESG Report 2021

In 2021, women comprised 58% of AIA’s workforce and 42% of its senior leadership. In addition, more than 25% of the women who work at AIA are enrolled in leadership development programmes. The firm wants this to grow to 45% by the end of 2026.

AIA’s ESG efforts saw the insurer’s inclusion in Forbes’ “World’s Best Employers” list for the third consecutive year in 2021.

¬ Haymarket Media Limited. All rights reserved.
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