There are many firms saying the right things about climate and sustainability, but relatively few who are turning their words into meaningful actions. Aviva wins this award for its pioneering work to understand and manage the climate risks in its assets and liabilities, pushing forward the sustainability of its business and products, and its international leadership in policymaking around sustainability and climate.

First, the words: Aviva considers climate change to be a significant risk to its strategy and business model. But it goes further than that. The group has a clearly communicated "Sustainability Ambition" that focuses on three areas: acting on climate change; building stronger, more resilient communities; and embedding sustainability in the business. This is all backed up by a commitment to comprehensive reporting.

Coordinating and implementing a group-wide plan of this scale is a major undertaking, and underpinning it is a risk management and risk appetite framework that was developed by a spin-off from Aviva's risk management function.

Paul Mylet, the insurer's group financial and sustainability risk director, says one key to success has been the support from senior level stakeholders. "What really helps is our group CEO Amanda Blanc has championed sustainability as one of our four key strategic priorities. This creates a space for us to help the organisation articulate what we need to do to deliver," he says.

To meet this challenge from above, the group climate and sustainability risk team has brought experts together and developed networks to assist the other teams create the solutions they need.

"No one has the answers to these problems. They're not solvable in traditional accounting or actuarial techniques. You have to spend a lot more time debating things and getting different perspectives," Mylet says.

"We've spent quite a lot of time 'on the pitch' helping them problem solve. That builds good relationships, but it also helps identify actions to be taken."

Loubna Benkirane, head of climate and sustainability risk at Aviva, says the risk team has played a major role in embedding not just the internal strategy, but also external requirements, such as the Prudential Regulation Authority's 2019 supervisory statement on managing the financial risks from climate change.

Much of the early work involved defining those responsibilities and ensuring the various teams understood what role they needed to play in embedding the sustainability ambition, Benkirane explains. This included training sessions on sustainability governance, metrics and reporting.

"As this topic gets more mature, there is more responsibility that goes into the first line. But it's definitely a joint collaboration and engagement across all functions."

The climate and sustainability risk team is relatively small at just six people but, as Mylet emphasises, there are multiple dozens of experts seeded across the organisation who are contributing to building resilience to climate-related transition, physical and liability – including greenwashing – risks.

Aviva has gone as far as disclosing the climate and sustainability responsibilities for 21 areas of activity. To highlight just three: the risk function is responsible for developing climate methodology and risk appetite; the capital management team ensures climate considerations are part of the market and credit risk assessment and performs relevant scenario analysis; and the asset management team is responsible for incorporating ESG considerations into investment management.

"From a risk perspective, what is important is to have clear frameworks in place for risk management and risk appetite, and making sure we translate the sustainability ambition into tangible thresholds and metrics that we can track to demonstrate we can deliver on our ambitions," Benkirane says.

In attempting to measure, manage and explain risks, insurers will use a combination of qualitative and quantitative metrics. Given that some tough decisions will need to be taken, most would like to put numbers in place to support those choices. But the nascent state of development, and the very nature of climate and sustainability, makes it impossible to put numbers on everything.

Mylet says the company will develop additional quantitative information, but in the meantime there is a need to get senior stakeholders comfortable with taking appropriate actions based on narratives, as well as figures, and communicate the present limitations on data and models.

"We have to accept that even when you've got quantitative information, it's going to be imperfect, but it's going to evolve over time. It's about striking a pragmatic balance: not waiting for perfection, but also grounding decisions in data and analysis where possible," he says.

Benkirane adds: "You can't wait until methodologies and data are mature to start thinking about climate and sustainability risks. We need to start as soon as possible and drive the change."

Aviva has helped set the tone for the wider industry, too, making a major contribution to groups such as the Climate Financial Risk Forum, the Net-Zero Insurance Alliance, the Partnership for Carbon Accounting Financials and, more recently, the Transition Plan Taskforce.

"These forums help us understand what is expected from the industry, and support driving best practices and developing methodologies," Benkirane says.

Mylet says he is proud of Aviva's bold and early commitments, and how they integrate with the broader sustainability agenda. "An investment in community is an investment in resilience, as well as climate change mitigation," he says.

As the group's sustainability work expands into areas such as biodiversity, this ability to connect areas of broad focus, and to take decisions and make commitments in complex environments, will no doubt serve it well.