Aviva wants UK to be the most climate-ready large economy in the world by 2030

Aviva wants UK to be the most climate-ready large economy in the world by 2030

New Climate-Ready Index shows UK ranks 3rd among G7 economies

Research shows UK SMEs need support to take climate action in current economic environment

Aviva has launched a campaign (7 November 2022) for the UK to be the most climate-ready large economy by 2030 as it releases its first Climate-Ready Index – a framework to measure how influential countries (G7 nations +Ireland) are progressing on climate mitigation, resilience and adaptation. Aviva is calling for action in a number of areas to combat climate change. It comes as new research highlights the risk that UK SME businesses could pull back from taking climate action to reduce their impact on the climate and to protect their businesses from the effects of climate change, in the current economic environment.

The YouGov research found that 72% of UK businesses know they need to get climate-ready but only one in three have plans to do this. Only 36% of UK companies surveyed say they are taking action to protect their operations against extreme weather events and just 34% say they have a structured plan in place to reduce their carbon footprint.

Aviva believes that getting climate ready will be vital for the future, and an opportunity for long-term green growth in the UK, but in the short term nearly seven out of ten (68%) SMEs agree that “Dealing with the cost of living and business operations is a greater business priority than implementing climate policies”. Nearly half (48%) said “whilst they recognise they should do more to reduce their carbon footprint, the costs of doing so are unaffordable during these uncertain times.” A further one in three (34%) SMEs said they’d “paused any investments in activities to address climate change because of the current economic climate.”

The Climate-Ready Index, created by Aviva in collaboration with Good Business and external climate experts, tracks eleven key measures of climate-readiness including:

reducing emissionssupporting biodiversitybuilding climate-resilient infrastructure, andhelping communities and small businesses prepare for the impact of climate change.

It reveals that the UK is currently ranked third for climate-readiness, with Germany taking the top spot, closely followed by France in second place.

The UK’s third position is primarily based on its strong performance in emissions and mitigation, relating to its national-level net-zero targets, progress towards targets and the ambition of future policies. The UK’s 2050 target combined with a short-term target to fully decarbonise the UK power system by 2035, contribute to the UK’s number three position. Policies to support renewable energy production, carbon capture usage and storage, and electric vehicle use underpin observations made about UK strengths in emissions and mitigation.

However, the UK had weaker scores across all remaining areas of the index, compared to other nations. For example, it scores low on biodiversity (ranking fifth), indicating significant habitat loss, degradation and fragmentation relative to what should naturally exist.​ Also concerning is the low score for ‘business readiness’ (seventh). This indicates British businesses risk falling behind in protecting themselves against climate impact and in helping deliver a more climate-ready country and world.

Amanda Blanc, Group Chief Executive Officer of Aviva said: “I want the UK to be the most climate-ready large economy in the world by 2030, as the country moves towards its net-zero targets. Being climate-ready goes way beyond the critical work of cutting emissions. It’s going to take leadership from government and business so that people and communities can be much better prepared across a range of areas from greener buildings to protecting biodiversity and expanding carbon storage. Current financial pressures are understandably making it harder for many businesses to invest in climate action right now, even though they recognise they need to do more. Government and bigger businesses have a responsibility to help SMEs get climate-ready.”

Aviva is calling on the UK Government and financial institutions to take action to help the UK and the world become more climate-ready by:

Ensuring countries have binding net-zero ambitions and plans – aligned with science and include short, medium and long-term targets​. Plans should cover detailed policy by sector, including for investment. Targets and plans should be independently assessed. Governments should be formally accountable for delivery.​Ensuring regulators incorporate climate risks – regulators’ mandates should be updated to include climate. They should shape and enforce consistent and comparable climate disclosure, including for corporate net-zero transition plans. Regulation and frameworks affecting investment (e.g. Solvency II) should be assessed to ensure they do not discourage but enable climate investments.​Building climate resilience – too many governments prioritise reducing emissions over preparing for climate impacts. Both are essential. Governments should work with the private sector and local authorities to develop national and regional climate resilience plans.Protecting nature and biodiversity – protecting and restoring nature will reduce net emissions, help limit climate impacts and improve our quality of life. For too long it has been an afterthought in government policy in many countries. We want governments to assess nature and biodiversity as part of the net-zero and resilience planning processes above. ​Enhancing international cooperation – no single country can tackle the climate crisis alone. Yet the big  “multilateral organisations” (e.g. the IMF, World Bank, OECD) and standard setters (e.g. Financial Stability Board) haven’t yet updated their roles fully to address climate. We propose countries convene a summit to harness the international financial architecture to the promotion of a global net-zero target.

Emma Howard Boyd, Former Chair of England’s Environment Agency and UN Global Ambassador to Race to Zero and Race to Resilience said: “Every day, all over the world, worsening climate shocks are rewriting people’s expectations for the future. The need to reach net zero and become more resilient is accepted almost everywhere and this means there is an economic race to get ahead of new extremes as well as an environmental and societal imperative. No one should be left behind. Countries can learn a lot from each other about climate preparedness and this index provides a helpful snapshot of where different countries stand. It will provide policymakers everywhere with insights on what’s working and what’s not.

Angela Francis, Director of Policy Solutions at WWF UK said: “Businesses and communities need a transformational shift to a nature-positive net zero economy, and Aviva’s Climate Ready Index shows action on the environment is mission critical for the finance sector. The UK should be the undoubted leader on climate change, with climate readiness the real key to our competitiveness, yet recent policies that increase fossil fuel extraction or remove environmental protections will only send the UK further down the leader board.”

Authored by Aviva