Aviva plc Corporate social responsibility report 2005 – a summary

The full report is available at www.aviva.com/csr05

CSR is part of Aviva’s DNA Group corporate social responsibility policy

Aviva, as a member of the international community, recognises its corporate social responsibility commitments in its various roles, which include insurer, investor, employer and consumer.

Contents We reflect these commitments in a family We recognise that our business activities 01 Chairman’s introduction of eight policies, which relate to: have direct and indirect impacts on the 02 Foreword by group chief executive societies in which we operate. We Standards of business conduct 04 CEO statements from the businesses endeavour to manage these in a We are committed to ensuring that our 05 Aviva and CSR responsible manner, believing that sound business is conducted in all respects 07 CSR governance and demonstrable performance in relation according to rigorous ethical, professional 09 CSR programme developments to corporate social responsibility policies and legal standards. and outcomes and practices is a fundamental part of 10 CSR issues Customers business success. 11 Promoting global responsibility We seek to provide our customers with a 12 External engagements We are committed to continuous service hallmarked by integrity, quality and 13 Views on Aviva’s performance improvement in our corporate social care. 14 CSR in practice responsibility programme and encourage 14 Standards of business conduct Human rights our business partners to strive for matching 16 Customers performance. 19 Human rights We respect the Universal Declaration of 21 Workforce Human Rights and seek to be guided by its Our business units throughout the world 24 Health and safety provisions in the conduct of our business. are committed to achievement of our policy 26 Suppliers objectives. Our performance will be 28 Community Workforce 30 Environment periodically reviewed and externally verified We are guided by our aim to be the 33 Independent review statement to help us meet our policy goals. At a local employer of choice in all countries in which level, the heads of our businesses will we operate. review progress at least annually. We will Health and safety publish reports regularly. We are committed to providing a working environment which is both safe and fit for the intended purpose and ensures that Approved by the board of Aviva plc health and safety issues are a priority for all January 2005 business operations.

Suppliers We regard suppliers as our partners and work with them to help us achieve our policy aspirations in the delivery of our products and services.

Community We strive to be a good corporate citizen around the world, recognising our responsibility to work in partnership with the communities in which we operate.

Environment We are committed to a programme of management, continuous improvement and reporting of our direct and indirect impacts, which marks our contribution to improving the world in which we live.

Aviva plc Corporate social responsibility report 2005 Chairman’s introduction

That meeting provides the most important Aviva, like any other business, needs to of several review opportunities throughout have policies, codes and review processes. the year. It is an enquiry into our progress However, the only truly effective way of and plans and also an examination of the embedding any form of behaviour is by major CSR issues, which face our business. consistently presenting good personal This enquiry is conducted in the light of examples at all levels. Every single member principles of fairness, equity and a spirit of of Aviva staff is a potential ambassador for absolute openness. It influences the good CSR practice. It is our aim to make subsequent course of the CSR programme them so. throughout the year. At the recent board review of the CSR My message to the review group was programme, we found that good progress simple. Good behaviour produces good is being made both by the group as a results. CSR puts the right focus on good whole and by the individual businesses. In behaviour. It should be at the core of our confirming our total support and approval responsibility and part of business as normal. for the CSR programme, we called for Last year I was invited to address the further progress in respect of CSR annual meeting of Aviva’s CSR review There is no book of right answers on CSR, integration within the business over the group. It brings together representatives unless it is within ourselves. The one coming year. We also committed to further from our businesses around the world, reliable approach is to pursue the guiding external engagement in promoting the from central functions in the head office as principles of fairness, equity and openness understanding and practice of CSR. well as external participants. I was struck by in our dealings with all our stakeholders. the energy, enthusiasm, degree of This is something we must seek to do at all I see a particular connection between the involvement and immersion in the times, both as individuals and as office of chairman and the CSR practicalities of CSR management and representatives of our company. I will be programme. A chairman is ultimately reporting in our businesses. attending the meeting of the CSR review responsible for how a business conducts group again this year. itself. CSR provides a code of good practice. It is my intention that we shall be This report details the progress we have regarded as good practitioners, while made over 2004. It is, as ever, a record of aiming to be the best. incremental growth. The marketplace and CSR priorities of our businesses are necessarily different. They are all moving in the same direction, but have different starting points and routes. Pehr Gyllenhammar Chairman

01 Foreword by group chief executive

CSR is a sound investment in the Development in performance sustainability of our business. It is an During the year Aviva has made further indispensable and integral part of doing progress in environmental management. business in the 21st century. It also For example, we have increased the use of demonstrates our integrity – one of Aviva’s renewables-sourced electricity and reduced core values – and is fundamental in earning our overall energy use in some businesses the trust of our shareholders, customers, by more than 10%. Paper use has reduced staff, suppliers and the community at large, and the sourcing of recycled paper has both now and in the long term. increased. We have also reduced waste output and expanded the types of waste Over the past year, we have achieved further we recycle. progress in both our internal and external activities. This gradual, year-on-year In addition to managing our own impacts improvement, has now become the hallmark we try to encourage others to practise of our groupwide CSR programme. good CSR. In selecting suppliers, most of our larger businesses now ask questions Changes in governance regarding human rights and social issues as As the commitment and development in well as the environment. We also continue CSR percolates throughout our businesses, to develop the practice of responsible there is a greater need for each business to investment in fund management. Morley drive forward and take ownership of the Fund Management, for example, engages CSR programme within the framework and with companies where it believes improved support set by the group CSR team. management of social, environmental, Most of our larger businesses have set up ethical or governance issues will enhance or CSR committees and those in Europe have protect shareholder value. set up their own steering group to exchange ideas and plan developments.

02

Aviva plc Corporate social responsibility report 2005 Focusing on customers Managing change responsibly Working with others Listening to the voice of the customer The relocation of some of the group’s Aviva continues to remain engaged in remains high on our agenda. Last year, it business activities to India and Sri Lanka has external activities. We are proud to chair was the main theme of our senior been a major test of our CSR credentials. the UK forum of the United Nations Global management conference where I bring I am pleased to say that the issue has been Compact and are committed to working to together Aviva’s business leaders from carefully managed with minimal impact on help ensure both its success and that of the across the world. Each business has affected UK staff, for whom we set aside a Global Compact as a whole in meeting invested significantly in reviewing systems sum of money specifically for the purpose challenges in the spheres of the and practices to improve our offer to our of re-skilling and redeployment. We environment, human rights, labour customers. At group level, we continued to continue to invest in the UK, for example, relations and anti-corruption. The United survey attitudes of people towards savings with the creation of some 200 new jobs in Nations alone offers a sufficiently neutral across most of our markets. This comes in our UK general insurance business in Perth. and global multi-stakeholder network addition to the specific customer research Members of Parliament and journalists, through which to attempt to meet those undertaken by our business units, helping who have visited our operations in India, challenges. us to spot global changes in attitudes and report positively on the working We participate in the Global Responsibility introduce solutions to their needs in a more environment, skill levels and benefits to the Initiative, an offshoot activity of the Global timely way. local economy and people’s quality of life. Compact, which brings together business These businesses already subscribed to the A focus on customers has been at the heart schools and businesses from around the group’s CSR programme and therefore we of my chairmanship of the Association of world to develop a global responsibility are beginning to expand our spheres of British Insurers (ABI). I set out to listen to model to shape the training of future influence in respect of CSR good practice others and to help the industry hear what business leaders. into these countries. they had to say. Some key outcomes of this I continue to refer to CSR as being part of process include commitments on: best Last year we endowed a Chair in Aviva’s DNA. It is a demonstration to the practice guidance on financial advertising; a Leadership and Responsibility at INSEAD, a communities in which we work and live review of the Raising Standards scheme; the leading international business school, to that we share their short and long-term development with the Financial Services promote understanding of CSR. The first interests. It shows that they can rely on us Authority of short summaries about report of the Aviva Chaired Professor in to serve those interests to the best of our products and the risks they carry; Leadership and Responsibility will contain ability – both now and in the future. consultation about how financial advice is original research on the subject of what is paid for and introduction of a benchmarking often termed “offshoring”. In addition, the service on complaint handling. professor will contribute material for inclusion in courses offered by the Aviva Leadership Academy, thereby ensuring that Richard Harvey CSR is an ingredient in the training of all Group Chief Executive our future senior business managers.

Climate change Climate change is perceived, quite rightly, as one of the biggest global challenges of all. Aviva has formed a climate change forum, which brings together all the hitherto separate activities across the group on climate change to promote synergies, to grow and promote awareness of the challenge and to enhance our own response to it. 03 CEO statements from the businesses

A theme in this report has been how The CSR programme in Aviva India has Delta Lloyd group wants to contribute to CSR is becoming more and more firmly developed at a rapid pace. Whether it is a the growing demand for more rooted in the Aviva group. One clear large-scale tragedy like the Tsunami or transparency. Our first CSR report is our illustration of this can be found in the helping out children in orphanages and the answer to this movement for more separate statements of the local CEOs elderly in their homes, the CSR volunteers transparency. For the Dutch industry and of our businesses. We provide several have been highly committed and the financial sector it’s very important to of them in this CSR summary report: passionate in their approach. I am very give clearness about our policy and the keen to see CSR become an intrinsic part of performance of our company. the Aviva India work culture. Niek Hoek Our aim is to create both market leading Stuart Purdy Chairman of the Managing Board levels of customer care and a wider range Managing Director Delta Lloyd of solutions to help our customers solve Aviva Life Insurance India their problems. I believe it has never been more important to my business that we As the Czech life insurance market is still in demonstrate leadership in the principles of Aviva Hayat ve Emeklilik aims to be one of its infancy, it is an excellent opportunity for care, not just for our customers, employees the most respected companies in the sector us to become the first insurance company and partners, but for the communities in in relation to corporate social responsibility. that addresses its customers not just by which we operate. For example the extra We believe that our commitment to our quality products and services but also by help we gave people in Cornwall in the CSR programme will make us one of the placing more stress on its social responsibility aftermath of the severe floods in Boscastle most respected companies in the market towards customers and society. in 2004. and will help attract prospective employees, Austin Kimm Our business and our industry is customers and business partners as well as General Manager increasingly being judged by its conduct as consolidating existing relationships. Aviva in the Czech Republic well as its results, and it is vital that our CSR Bert Paterson programme remains part of the blood Managing Director stream of our organisation, if we are to Aviva Hayat ve Emeklilik As a market leader and major financial continue to have motivated staff, satisfied services brand, it is vitally important that customers and ultimately deliver superior we take our corporate social responsibility business performance. As a fund management business we exert seriously. our influence by demanding ethical and Patrick Snowball There is a strong emphasis on financial sustainable practices from companies we Chief Executive performance measurement within our invest in. We are committed to applying Norwich Union Insurance business and some people question how these same high standards to our own CSR fits with this. I believe it is also business – to ensure that we continue to important for companies to be respected During 2004, we continued the operate in a responsible and ethical manner for the way in which they conduct their development of CSR policies and practices and meet the expectations of all our business. Following a path of CSR is an across our businesses. We will continue stakeholder groups. essential part of doing business today. with this commitment in 2005 as we seek Keith Jones further to embed Aviva policies in Our CSR programme is the engine of Chief Executive Hibernian. delivery for many of our aspirations and Morley Fund Management corporate targets. I am wholly committed to Bryan Jenkins the programme and believe in its value both Chief Executive to the business and all our stakeholders. Hibernian Group Gary Withers Chief Executive Norwich Union Life 04

Aviva plc Corporate social responsibility report 2005 Aviva and CSR

Group CSR team

Company profile Why we practise CSR Anthony Sampson Director of CSR Aviva is the world’s fifth largest insurance We practise CSR because we believe that it is group and the biggest in the UK. We are the right way to go about business. In our one of the leading providers of life and opinion, you do not put a price or a cost on pensions products to Europe and have good ethics. You practise it simply because it substantial businesses elsewhere around is the right thing to do. For us, the same the world. Our 49,000 employees serve applies self-evidently to the rest of the CSR some 30 million customers worldwide. programme. We regard it as an investment in Nathalie De Geus building organisational strength for today Head of CSR Aviva’s principal business activities are long- and durability for tomorrow. We believe that term savings, fund management and it strengthens the fibre that builds both general insurance, with worldwide internal and external trust and makes us premium income (before reinsurance) and stronger. In all senses, it builds value. retail investment sales from continuing operations of £33 billion and assets under In our view, the practice of CSR enhances management of £273 billion. our business performance both in the short Michelle Wolfe and the long term. We believe that it CSR Communications Manager Our CSR programme covers all Aviva increasingly engages our employees, our businesses worldwide. Due to the investors and our customers. Firstly, CSR announced sale of our general insurance provides an additional route through which business in Asia during 2004, we did not existing employees can identify with and report on that business’s performance. live out the Aviva Values of integrity, progressiveness, performance and What we mean by CSR teamwork. It also attracts potential new Annette Pendrey CSR Management Consultant employees. Secondly, it reflects the internal Aviva’s CSR policy governs performance in focus and practice of the company, which is eight related elements. These are the special interest of the growing number management of our relations with our of socially responsible investors (SRI). customers, workforce, suppliers and the Thirdly, it helps us meet the criteria of the community; of our performance in respect increasing numbers of customers who seek of the environment, human rights and evidence of good CSR performance. These health and safety and of our adherence to Zelda Bentham are three important streams of value. Environment Manager rigorous standards of business conduct. Without doubt, the beneficial impacts arising The CSR policy sets out how we approach from these streams of value add to better our business and how we deal with people “bottom line” performance. In drawing on in pursuing our business. It contains brief this value, we also meet our responsibilities summaries of fuller policy statements, to our shareholders, who have a right to which can be viewed on expect that we grow value for them. www.aviva.com/csr. The exception is in Megan Crockford CSR Assistant the case of customers, where there is not yet one detailed statement to cover the diversity of the business activities in which we are engaged. However, the standards of business conduct policy does contain some minimum explicit undertakings in respect of customers. Richard Whitaker Group Company Secretary 05 Aviva and CSR continued

How we practise CSR Life assurance This involves talking to companies about issues such as environment, human rights, Understanding customers‘ needs Integrating CSR into our business means health and safety and corporate governance One of the responsibility challenges in life factoring it into our core general insurance, and encouraging them to improve their assurance is to help customers secure their fund management and life assurance management of these issues. Thirdly, Morley financial futures and to differentiate businesses as well as into our internal has a pro-active voting policy, voting against ourselves by the level and quality of support operations. companies that have poor corporate we provide to them. To achieve this in the governance practices or do not provide UK, Norwich Union Life has initiated a General insurance adequate disclosure of their management of process excellence programme focused Setting fair prices key social, environmental and ethical issues. around understanding its customers’ needs In general insurance, we recognise that and then refining the processes to deliver Internal operations responsibility means setting the most accurate what they require. Last year it engaged over price for our customers. One means of Keeping our own house in order 1,000 of its employees to deliver significant ensuring this is via our revolutionary digital As a major purchaser, we can – and do – improvements to the customer experience. flood map in the UK, which started to be use our leverage to encourage improved rolled out in 2004 and which models the risk Responsible selling CSR performance amongst our suppliers. of flooding for individual addresses. This could Norwich Union Life has procedures to An example, practised by some of our lead to as many as 600,000 more homes and ensure that pension sales made by its businesses, is the inclusion of CSR questions businesses in the UK qualifying for insurance representatives are subject to checking by in the supplier tendering process. Further, through Norwich Union Insurance. its quality assurance unit. This mandatory our internal operations also play a leading checking is carried out on "higher risk" role in minimising the direct environmental Moving beyond financial recompense contracts, while "lower risk" contracts are impacts of our business. This is done in a In some of our markets, such as Canada and checked on a random basis. In addition, the number of ways, including increasing our the UK, rehabilitation has become central to sales compliance guide and sales training use of renewables-sourced energy. the motor claims handling process. The manuals explain the correct methodology claims process is no longer purely about for the sale of pension products. This backs financial recompense but also aimed at How we develop CSR up the training given to all representatives helping road traffic accident victims who on training courses. Finally, certain types of We have a clearly incremental approach have sustained injuries to return to all their pension sales, such as opt outs from to building our CSR programme for normal activities of daily living in the shortest employer sponsored pension arrangements, several reasons. Firstly, the capacity of any time. We aim to provide injured parties with are not permitted. business to absorb change is limited. Firm high quality injury assessment, diagnosis, roots take time to grow and time must be and the provision of optimum evidence- Extending the reach of insurance allowed for the embedding of CSR, which based treatment devised by an expert panel. Another challenge is to extend the reach of is underpinned by communication and insurance and, in India, for example, we Helping younger drivers training. This is a gradual process and achieve this by offering a variety of low In the UK, Norwich Union Insurance is also must be driven by each business at a pace premium products for those from providing more affordable insurance for with which it is comfortable. Secondly, economically underprivileged backgrounds. young drivers in return for driving at safer our businesses around the world operate in very different circumstances. For times of the day through piloting a new and Fund management instance, they vary in size from 45 innovative product using telematics black Responsible investment employees to 13,000. Further, local box technology. This usage-based product In our fund management business, we understanding of CSR varies greatly from discourages using the vehicle between practise responsible investment in three country to country. So whilst all our 11pm and 6am when statistics prove that principal ways. Firstly, we offer specialist SRI businesses are headed in the same young drivers are 10 times more likely to funds, administered by an experienced team. direction in respect of CSR, they start at have a serious accident. Secondly, the SRI team has a mandate to different points and move at different engage with all of Morley Fund speeds, determined by size and local 06 Management’s assets under management. circumstance.

Aviva plc Corporate social responsibility report 2005 CSR governance

CSR governance at group CSR MANAGEMENT CYCLE level

Aviva CSR* Executive CSR# European Board-level review board review group commitee steering CSR steering The Aviva board reviews the policy, group group programme, progress and plans annually.

At the last review in January 2005, it February approved a small amendment to the CSR June policy, requiring all local CEOs to review January June August September January November CSR progress, at least annually.

The group chief executive is the executive *Representatives from head office, businesses and external parties sponsor of the CSR programme. The #Representatives from head office and businesses director of CSR reports to him via the group company secretary. The chairman takes regular reports on CSR during the year. CSR MANAGEMENT STRUCTURE Both he and the executive directors have maintained their strong support for the programme. The group chief executive has Aviva Group further required the director of CSR to board company secretary challenge, when necessary, any group matter from a CSR perspective. Review functions Nominated Director Group CSR review group* Each CSR policy has a primary “owner” managers of CSR policy owners CSR steering groups# responsible for promoting, co-ordinating in the business External assurers and monitoring progress across the group. Direction of the programme is steered by a Policy owners Policy owners number of different influences. in the business in the business CSR review group The CSR review group, which meets annually, is the group’s primary review mechanism. It brings together representatives from the businesses, head office, external advisers and our external assurers. It examines strategy, policy, progress and plans. Primary outcomes from the meeting in June 2004 were a call for mechanisms to counter- balance a perceived UK-centricity in our programme and a greater focus on the key CSR-related issues.

This call has been answered in three ways: by the creation of a European CSR steering group, which met for the first time in January 2005 in Istanbul; by much closer support for overseas units from the group CSR team and through our input to a high-level issues group, which identifies key business issues Members of Aviva’s CSR review group at the June 2004 meeting. 07 for Aviva, now and in the future. CSR governance continued

CSR steering group The nominated manager is responsible for • In the UK, Norwich Union Life set up The Aviva CSR steering group meets promoting and reporting on the a board-level committee to review the quarterly. Involving representatives from the programme, both to the local CEO and to service it gives to its customers, which head office and the larger businesses, it the group CSR team. reflects a heightened customer focus provides for more frequent review of Effective local governance structures are throughout the business. internal progress and consideration of best determined at local level. The group In the UK, Morley Fund Management relevant external issues. Many of the • CSR team only looks to see that adequate encourages its CSR committee businesses have formed their own progress is being made in CSR and is not members to attend external workshops committees to similarly oversee the concerned with the local structures, which and conferences to improve their programme at local level. deliver that progress. knowledge of CSR. Further, Managing risks Clear evidence of strengthening governance compulsory and voluntary training In terms of managing CSR risks, the Aviva structures can be found in the individual packages are available to all staff on group has an established risk management business unit reports. Some examples are: various aspects of CSR. system which is embedded into its business • In Turkey, our two Aviva businesses planning and performance monitoring • In addition to the close oversight to the have both set up CSR committees processes. This system includes the CSR programme given by the CEO, which work together closely to develop identification of risks to the business there is a further executive sponsor in internal CSR understanding and including social, environmental and ethical Norwich Union Insurance in the UK. practice and to project this focus matters. There are also three separate steering committees on environment, externally. Whilst a clear internal focus is paramount community and on CSR as a whole. Increasingly, our businesses network with for a successful CSR programme, it is also The latter is made up of individual one another to share and develop ideas critically important to obtain external inputs policy owners who meet quarterly and and practice on CSR without necessarily and to track external views. All members of whose activities are co-ordinated by involving the group CSR team directly. This the group CSR team – and other staff – the nominated manager. Norwich extremely positive development is further belong to external networks (see page 12), Union Insurance has also adopted the testimony to the fact that CSR is becoming which provide an invaluable “radar” on group CSR team’s practice of inviting more embedded. For instance, Norwich CSR thought and practice at UK, European external representatives to provide Union Central Services (NUCS) has been and global levels. input to CSR meetings. A member of sharing good practice on its “binless WWF-UK has been invited to critique office” rollout programme, which is being CSR governance at business its CSR programme and report. considered by Aviva Australia. It also shared unit level • In Aviva India, the governance a UK staff environmental awareness raising structure has further developed since leaflet with all businesses. Hibernian, in In each business the CEO is the local sponsor programme inception in 2003 and is Ireland, has since issued a leaflet to staff, and an appointed nominated manager for firmly supported by the CEO. The while our businesses in the USA and Turkey CSR is responsible for programme nominated manager works with a are seeking to produce a similar document. development. The CEO signs off a corporate team, which meets once a Further, Aviva France linked up with NUCS compliance statement to the effect that the fortnight to review progress. to discuss environmental features for its business is in line with the CSR policies. The Additionally, CSR team leaders have new headquarters, building on UK business unit report details progress over the been appointed in 25 locations across experience. past year and plans for the coming year. The the country. new CSR policy now provides for CEO programme review outside of this exercise. • In Delta Lloyd, in the Netherlands, the Each CSR policy has an “owner” in each directors of all CSR policies meet business and the nominated manager quarterly to review progress and to set co-ordinates the implementation work, targets. The executive board reviews 08 usually through a committee. the CSR programme twice-yearly.

Aviva plc Corporate social responsibility report 2005 CSR programme developments and outcomes

Integration of CSR has deepened • Staff volunteering is growing steadily Developments at business throughout our business practice and this around the group and has increased to unit level can best be seen by reviewing a variety of 19,000 hours compared with 11,500 sample developments and outcomes of the hours in the previous year. • Four of our businesses – Morley Fund CSR programme over the past year: Management, Aviva Australia, Delta • Groupwide electricity consumption is Lloyd and Norwich Union Life – now down from 188 GWh to 157.9 GWh Developments at group level produce their own separate CSR with CO2 emissions down from 59,767 reports, which is one visible aspect of tonnes to 23,024 tonnes. In the UK, • Following a review of the CSR policy at the heightened CSR communications electricity in the Norwich Union- executive level, we have amended the activity. managed properties is now 100% CSR policy to provide for mandatory from renewable resources. • All business units have reported, where annual programme review by local appropriate, according to Aviva’s key chief executives. • Groupwide gas consumption is down performance indicators. These are from 135.7 GWh to 109 GWh and • In November, the executive directors contained within the business unit CO emissions down from 27,417 approved the establishment of an 2 reports on www.aviva.com/csr05. tonnes to 21,934 tonnes. Aviva climate change forum. Further • Morley Fund Management has been information on the climate change • Whilst celebrating success, we must able to celebrate attracting a further forum is contained overleaf. also report a less welcome figure, £140 million to its SRI funds over the which is that car fleet kilometres are up • CSR is being firmly embedded in our year, taking the total to £700 million. from 86 million kms to 97 million kms senior management training and therefore CO emissions are up • Our Indian business has established programmes. This presence has been 2 from 13,724 tonnes to 17,417 tonnes. relationships with a variety of further strengthened by the While the car remains one of the institutions to provide micro-insurance appointment of the Aviva Chaired timely and practicable means of to economically deprived women and Professor in Leadership and reaching many customers around the other disadvantaged groups. So far, Responsibility at INSEAD (see page 11), world, we will be closely investigating around 315,500 lives have been who contributes at various levels to the the cause of this increase during the covered. entrenchment of CSR through coming year. learning. • In 2004 we appointed a group diversity director and established the group’s diversity steering group of senior executives from around the world to manage the embedding of diversity in Aviva. • Integration continues to be a major focus for the group CSR team. To support the businesses the CSR team produces a regular newsletter for all those responsible for CSR across the group, makes support visits to businesses and promotes best practice. Its active communications programme is both internal and external and makes use of all available media within the group. Aviva Australia’s CSR report. 09 CSR issues

Numerous CSR-related issues confront both We have now set up a climate change Norwich Union Life's senior executive team business as a whole and financial services in forum within Aviva. This brings together has taken full responsibility for practical particular. We review these on a regular people from our different businesses who delivery of TCF across all levels of the basis, both at our annual CSR review group are tackling aspects of climate change in business. A new formal governance meeting and also as part of a high-level different ways. It brings separate activities structure introduced in fourth quarter 2004 Aviva issues group which was set up in under one focus and allows us to promote emphasises its commitment to ensuring the February 2005. synergies, to enhance organisational focus principles of TCF sit at the heart of its on the challenge and to identify potential strategic thinking and operations. It is also The three CSR issues reported on last year new responses. It will include representatives assessing how it can best introduce remain the three principal issues facing our from the academic and NGO communities. effective measurement systems to evidence business, namely climate change, offshoring its successes in relation to fair treatment of and improving customer relationships, Aviva also continues to participate actively customers. which we deal with this year under the title in the climate change working group as of treating customers fairly. part of the United Nations Environment Programme Finance Initiative. Managing structural change

Climate change In almost all large businesses, structural Treating customers fairly change is a fact of life, marked by Over the past year, the body of evidence acquisitions and disposals, relocations and suggesting that climate change is one of Putting the customer at the centre of our restructuring, all occasioned by the the principal challenges facing society in business focus is a key theme for all our changing circumstances of business. What this century continues to grow in the eyes businesses. An example of this approach is is critical is how such change is effected. A of the overwhelming majority of the global given by Norwich Union Life in the UK. significant example of this is the move of a scientific community. Its effects are Norwich Union Life takes the views of its number of operational support functions to discernible today in the natural world, customers very seriously and carries out an parts of Asia to support the group’s which sends out constant stress warnings extensive range of regular customer strategy to improve efficiency and and the only imponderable is just how research to ensure it understands them. It is competitive advantage. significant its impacts will grow later this very aware that service to its customers is As reported in last year’s CSR report, Aviva century. not always where they, nor it, would want has established a self-sustaining, low-cost it to be and that the business is not Along with other responsible businesses, operation in Asia providing operational currently meeting the expectations of all its Aviva seeks to contain its own direct support to businesses in the group. We customers. Norwich Union Life is using the contributions to global warming, by both findings of research, together with analysis continue to invest in our offshoring activities cutting energy use and switching to of complaints, to inform an aggressive and to date have some 4,000 people in Asia renewable energy sources, where this is a programme of improvements to service supporting our UK and Canadian practical option (see page 31). We also delivery. This involves short term businesses. An Aviva corporate team, Aviva seek through our fund management (see improvements as well as a longer term Offshore Services (AOS), was set up in June page 19) and purchasing (see page 26) programme of investment in fundamental 2004 to manage the operations and now activity to encourage others to improve improvements to the overall customer comprises a 40 member team across India, their own direct environmental experience. Sri Lanka and UK. AOS is integrated into performance. We also keep a focus on Aviva’s governance structure and reporting environmental impact in the design and As a Raising Standards accredited brand, processes and is overseen by the Aviva Norwich Union Life is fully supportive of delivery of our products and services. offshore advisory committee and group initiatives which deliver clarity and simplicity executive committee. for its customers in the UK. It is also supportive of efforts to raise confidence in We believe that we have effected the the industry and, as such, has been working necessary changes with minimal impact with the regulator, the Financial Services on UK staff and with all due consideration Authority, as it develops thinking around its for the well-being of staff and 10 Treating Customers Fairly (TCF) project. communities in Asia.

Aviva plc Corporate social responsibility report 2005 Promoting global responsibility

Aviva Chair in Leadership and of the insurance sector leveraging Responsibility globalisation to cope with competitive pressures (often termed “offshoring”). The A contribution from the Aviva Chair holder Chair will also bring contributions to the Henri-Claude de Bettignies, Professor of Aviva Leadership Academy, through lectures Comparative Management at INSEAD (since on the two dimensions of its research 1967) and Visiting Professor of International activity. Business at Stanford University (since 1988).

To enhance the production and sharing of knowledge in Leadership and Responsibility Global Compact (or CSR) – two areas of critical importance in Aviva is proud to continue to chair the today’s society – the Aviva Chair has been United Nations Global Compact UK forum. created at INSEAD (The European Institute in The Global Compact offers 10 principles for Business Administration), the leading global signatory companies to follow, covering the business school with campuses in Europe environment, labour relations, human (Fontainebleau) and Asia (Singapore). rights and anti-corruption. We are happy to In addition, our subsidiary in Lithuania contributed to raising the profile of the Over many years Aviva has benefited from subscribe to these and the principles are Global Compact by participating and the management education experience already reflected in our existing company presenting at a meeting in November to accumulated on the Fontainebleau campus, policies on standards of business conduct, help raise awareness of CSR in Lithuania. and the creation of the Chair will contribute human rights, environment and our suite of The invitation to our business was made in to strengthen the research capability of the workforce policies. recognition of Aviva’s leading CSR position. institution. The general focus of the research The aforementioned relevant sections of In Turkey, our businesses have also been will be to explore how business leaders and this CSR report demonstrate our conformity invited to participate in establishing a local organisations, particularly in the insurance with both our internal policies and the Global Compact forum in 2005, to help and finance sectors, can handle more principles of the Global Compact. promote the principles of the Global effectively the responsibilities associated with However, our support of the Global Compact amongst the Turkish business their position of influence in society. Compact goes beyond underpinning community. Among its activities, the Chair will explore internal policies in an international context. how the development of integrity, at the Many of the CSR challenges we all face are Global Responsibility individual and corporate levels contributes international in reach and complexity. Initiative to build the trust necessary to perform Initiatives at a one-company or one-country effectively in a multi-stakeholder and global level, while welcome contributions, will The Global Responsibility Initiative is jointly environment. always fall far short of the scale of response sponsored by the Global Compact and the The Chair will produce academic papers that is required to tackle challenges such as European Foundation for Management furthering knowledge in two dimensions of climate change. Effective international Development. It brings together 20 corporate performance: leadership and alliances are the only way of combating representatives from leading businesses and responsibility (or CSR), and it will prepare such problems. The Global Compact seeks business schools from around the world in documents intended for large management to bring together the worlds of a project to update the current model audiences. government, big business, small businesses, being taught in most business schools so NGOs, trade unions and academics in that it takes full account of business In its initial research activity, the Chair is alliances at both national and international responsibilities in the 21st century. exploring the responsibility of global level to combat global problems. Aviva Aviva and the Aviva Chaired Professor in corporations and the relevance for them of remains firmly committed to doing its best Leadership and Responsibility both “common good”, taking examples from to help this initiative succeed. participate in this project, which is expected different industrial sectors. Another project to present its findings to the United Nations will assess the positive and negative impacts in September of this year. 11 External engagements

FORGE III With WWF, we have had a long-standing Aviva’s executive participating relationship, which has operated at different in international affairs Aviva has chaired the FORGE group of levels. WWF has been represented on our insurers and banks since 1998. The group CSR review group for some years and we are CSR does not only call for the exercise of has not only produced useful guidance on represented on the WWF-UK programmes responsibility at corporate level, it also environmental and CSR management and committee. We consider WWF to be the supports and encourages the practice of reporting, but also remains a valuable leading global NGO on the environment and individual responsibility. Aviva’s group information exchange for group members we greatly value the environmental insights strategy and development director, Tidjane on matters of best practice. we gain from this relationship, which Thiam, is a member of the Commission for Africa, set up in early 2004 by UK Prime The FORGE group has recently concluded its influence and inform our own CSR Minister Tony Blair to take an independent work on CSR key performance indicators for programme. look at the challenges facing the continent the financial services sector. These will be The United Nations Environment and make recommendations for its future. applied within Aviva during the coming year. Programme’s Finance Initiative continues to The commissioners, 17 in total, are people be a key grouping for Aviva. We are who have significant and relevant Developing Aviva’s represented on its climate change and asset experience to contribute to this initiative to programme through management working groups and are help deliver real change. partnerships helping to establish a new group on general insurance. We also continue to The Commission’s work is divided into six Aviva continues to have close relations with benefit from our membership of the areas. Tidjane co-leads the Peace and chosen partners. These include BTCV, Institute of Business Ethics. Security theme, with the aim of achieving a Earthwatch, BITC, WWF and UNEP. Each of lasting reduction and ultimately elimination these relationships adds something During the coming year, we look forward of violent conflict in Africa. to forming a relationship with a different to the success of Aviva’s CSR In March 2005, the Commission published a programme. development NGO. Our initial point of contact is in respect of a tranche of funds report on its recommendations. The In the case of BTCV, these benefits range raised by our UK staff for Tsunami victims, Commission carefully studied all the evidence from the opportunity to send our staff on which, following matching from the available to find out what is working and conservation breaks to gaining fresh company, amounts to some £260,000. what is not. It also consulted extensively, insights into social policy from one of the Further details can be found in the inside and outside Africa, with governments, most practically engaged NGOs working in community section. civil society, the academic world and with its field. those in the public and private sector. The report will be discussed by the leaders of the In respect of Earthwatch, the benefits G8 countries at the Gleneagles summit in range from an opportunity to support July 2005 and it is widely expected that its climate change related research to key recommendations will shape the accessing a unique set of companies in the dialogue on Africa’s development in the next Corporate Environmental Responsibility five years. Group, all engaged on reducing their environmental footprint. Aviva supports its senior executives and management in playing their individual part We value BITC for its practical expertise in a within society. number of fields of CSR. We also appreciate having one of its most experienced employees on our CSR review group.

Tidjane Thiam, Aviva's group strategy and development director, is a member of the 12 Commission for Africa.

Aviva plc Corporate social responsibility report 2005 Views on Aviva’s performance

How others view Aviva’s CSR Aviva’s annual review group External stakeholders are also encouraged performance meeting – a stakeholder to challenge and stretch Aviva’s thinking, to perspective ask questions that cannot be answered We value feedback and assessment of our simply and to push Aviva’s understanding performance as we continue to develop and A range of external parties or stakeholders, of the complexity and contradictions of manage our CSR programme across all our primarily NGOs representing interests such what CSR means for a global insurance and businesses. We are pleased with the as the environment, human rights, corporate investment company. recognition we have received during the year. responsibility and sustainability have been Key specific areas raised by external parties at invited by Aviva to take part in Aviva’s CSR Aviva was pleased to be included in a new the 2004 CSR review group meeting were: development process, mainly through global ranking by Corporate Knights, called attendance at Aviva’s annual CSR review Consideration of the adoption of the the Global 100 Most Sustainable • group meeting, for more than five years. draft UN Norms on the human rights Corporations in the World, which based its responsibilities of companies. ranking on analytical data provided by We have been asked, by Aviva, to comment Innovest Strategic Value Advisors, an upon our experiences, and to give a flavour • Tackling social exclusion. internationally recognised ratings agency. of our perceptions of Aviva’s approach and • Increasing CSR focus upon the indirect progress in developing its CSR programme. Following the annual Dow Jones impacts of Aviva’s business, specifically; Sustainability World and STOXX indices Aviva is not always a fast mover, but it has to further explore the ramifications of what it means to be a responsible review, Aviva continues to be the only UK moved seriously and steadily towards an investor, with a specific focus upon insurer included in both sets of indices. We increasingly comprehensive management of mainstream investment within the are also a member of the relevant CSR, and involvement with its programme Aviva group. FTSE4Good Index Series. over the years has indicated an expansion in both the geographical spread of its CSR • Continue to explore and investigate In Business in the Community’s (BITC) CR activity, and in the scope of its CSR interrelationships between different Index results, published in April 2005, we challenges. Aviva business activities. were ranked joint 1st in our sector and joint 22nd overall in the top 100 companies. We Fundamental CSR challenges still exist, of a In essence, stakeholders look for a range of were also placed 1st in our sector and 26th larger scale than those which have been things when they engage with a company, overall in Business in the Environment’s Index tackled so far, but Aviva has taken a but the principles that inform Aviva’s of Corporate Environmental Engagement. realistic and sensible approach towards approach, those of; inclusiveness, equipping itself to start to explore and openness, mutual exploration, understand those challenges. collaboration and trust, are consistent with its belief in CSR as a fundamental priority Why do we engage with Aviva? In simple for businesses of the future and indicate to terms, most stakeholders will develop long- the external parties involved in this journey term relationships with a company that can that Aviva is committed to corporate social demonstrate that it really understands the responsibility over the long term. implications of the stakeholders’ areas of interest and concern and is committed to It should be noted this statement is not meaningful change in business priority and intended to represent any form of assurance process. or verification statement, this is an informal statement to give some contextual Aviva’s annual CSR review group includes information from external parties that have nominated Aviva senior managers from been involved in Aviva’s continuing journey. business units around the world side-by- side with representatives of NGOs and Oliver Greenfield, Joss Tantram, external parties. All participants in this WWF-UK Terra Consult A review of implementation progress in process are treated equally; no discussions Patrick Mallon, each CSR element follows overleaf. are conducted without the inclusion of all. Business in the Community 13 Standards of business conduct

As a financial services company, we Communicating to staff at the start During the year, Norwich Union Life in the recognise that much of what governs our of their career with us UK published a booklet “Security – it’s relationship with our customers is based on At the outset of their employment, Delta everyone’s business”. The guide was sent trust. We have a responsibility to uphold Lloyd’s internal codes of conduct are to every employee and contained a number this trust in all that we do – be it in our communicated to staff by their inclusion in of practical “do and don’t” reminders. It investment capacity, our general insurance staff contracts. Across our worldwide also included a section on key aspects of or our life assurance activities. It is with this businesses, it is common practice for new the standards and how they relate to other in mind that we consider the standards of staff to be introduced to CSR issues, ethics parts of the CSR programme in its CSR business conduct policy to lie at the heart and/or the Aviva Values as part of their report for staff. of the entire Aviva policy framework. induction programmes. A multitude of In our continental European businesses, a different methods are employed, including The revised standards of business conduct guide was distributed in early 2005 to staff mandatory computer-based training in policy was signed off by the Aviva board in in Aviva France on the proper use of IT. Norwich Union Insurance in the UK and a January 2004. In essence, the revised policy In Italy, all staff were informed about anti- core values game in Delta Lloyd, based on provides a clear ethical compass to turn to money laundering procedures and internal real life ethical dilemmas. when making business decisions. It serves regulations were revised in line with the as a clear guide on how we wish to Communicating to staff during policy and the new Italian law. Aviva in conduct business. their careers Romania is embedding the standards of During 2004, Aviva’s CEO in Australia business conduct within employment Embedding the standards of reinforced adherence to the standards of contracts, in induction programmes, in business conduct policy into business conduct in emails to all staff and sales training courses, staff handbooks, our businesses via the internal electronic magazine. The quarterly staff updates and within its daily Australian business also conducted a values activities. The spirit and guidance embodied in the programme over 2003 and 2004 with all Incorporating ethical behaviour staff participating in workshops relating to standards of business conduct policy must into staff appraisals the Aviva Values. be followed by all our staff, in particular by Apart from raising awareness among staff our senior managers across our businesses, Our Indian business has a programme in and intermediaries, a key means of to set an example for others to follow. All place to help staff live the Aviva Values in embedding the standards of business CEOs must provide annual assurance that their everyday lives. The Aviva Values in conduct is by including it in staff appraisals. the policy is adhered to within their Action award was introduced in 2003. This takes place in a number of our business. Compliance with the standards is It aims to showcase real life examples of businesses, including Morley Fund also required as part of Aviva’s senior role model behaviour by nominating five Management, Delta Lloyd and Aviva in India. management contract. employees as “value ambassadors” in each Over the course of the past year, the focus quarter of the year. Apart from a personal has been on rolling out the revised policy to thank you note from the managing director, our employees. This has taken shape in a their actions and stories are publicly shared variety of different ways, reflecting the in the staff newsletter, Buzz, “Town Halls”, different cultures and sizes of our meetings between management and staff, businesses around the world. and various other forums.

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Aviva plc Corporate social responsibility report 2005 Full CSR Report on aviva.com/csr05

Customer-facing ethical behaviour Monitoring our standards of In response to the rapid growth in new A concerted effort has been placed on the business conduct business volume and the ensuing sales standards of business conduct in our force growth, Aviva in Hungary businesses in eastern Europe. In Poland and Our businesses employ a number of strengthened its compliance function by Lithuania, ethical behaviour is included in mechanisms to monitor the various strands appointing a dedicated compliance officer. the professional training given to agents. of the standards of business conduct policy. It recruited more staff into its quality Relevant aspects of the standards of The “Safecall” hotline operates in the UK, control function and reinforced its existing business conduct policy are translated into allowing staff to report suspected cases of controls. It also focuses on ensuring quality Lithuanian and are included in the workplace fraud and malpractice via an of service and reviewing internal contracts of the direct sales force. In independent, confidential 24-hour procedures and regulations relating to the Hungary, ethics are embedded into the telephone service. Work is currently standards of business conduct. Similarly, contracts of sales force staff. underway to expand this service to business Aviva’s business in the Czech Republic is focused on customer care and standards of In Spain, ethics training is included in the units outside of the UK. The group financial business conduct. courses prepared for intermediaries. crime unit published a booklet “Fraud – What is it? and what you can do to prevent During the year, Commercial Union Polska In Norwich Union Insurance, the learning it”. This was distributed to staff around the created an email address for staff to use in and competence scheme is designed to UK as part of ongoing fraud awareness and order to report their concerns. The address enable the business to provide its prevention training. is administered by the internal audit customers with the highest level of service manager. Agents’ behaviour is monitored and professionalism through highly skilled, In Norwich Union Life, following the release on a regular basis. During 2004, cases of qualified, competent and motivated of the revised standards of business agent misconduct were discovered. The employees. The scheme lays down the conduct policy, work commenced to public prosecutor’s office was informed and standards and procedures to ensure that all develop a compliance matrix, to give the agents in question were immediately staff achieve and maintain competence. practical guidelines as to “what policy dismissed, thereby sending a clear message This has been put in place to ensure that compliance looks like” in the various on the business’s strong stance on ethical Norwich Union Insurance complies with the business areas of the business. The policy is behaviour. Financial Services Authority’s training & also part of a twice-yearly formal self- competence commitments and rules. It also certification process which is undertaken to supports its Leadership and Care customer- reinforce the overall governance framework focused programme. within the business.

In India, a financial health check for In Ireland, the special investigation unit customers is administered by its financial which Hibernian had set up in 2003 planning advisers, who offer free advice to fulfilled its objectives by delivering all customers who purchase Aviva Life 5million in savings in 2004 as a result of Insurance plans. The business not only tackling insurance fraud. focuses on meeting its sales targets but also believes in guiding customers to the best solutions regarding their financial position and protection needs, thereby engendering greater customer trust.

A booklet was distributed to UK staff as part of ongoing fraud awareness and prevention training. 15 Customers

Fair treatment of customers is, Embedding CSR in our core Similarly in the UK, Norwich Union’s Pay As fundamentally, good business practice and products You Drive™ Insurance pilot is a is key to securing customer confidence in revolutionary new way to calculate car financial services. All our businesses are Focus on rehabilitation in Norwich insurance premiums, whilst helping to focused on that goal. Union Insurance reduce impact on the environment by offering lower premiums to those who As the world’s fifth largest insurer and one In Norwich Union in the UK, rehabilitation drive less and who drive carefully. It also of Europe’s leading providers of life and has become an integral part of the claims allows the vehicles to be located, which will pensions products, Aviva is committed to handling process so that this becomes help to combat car crime and also to ensuring open and transparent priority as opposed to simply paying support vulnerable drivers if they have relationships with our customers, while compensation. The aim is to get the injured broken down. Phase one of the pilot is making our products accessible to a variety party as close as possible to their pre- finished with 5,000 volunteers having the of audiences to help secure their financial accident lifestyle as quickly as possible with telematics devices fitted in their cars. futures. We also seek to provide peace of early help. In January 2005, Norwich Union mind for our customers at every stage of opened its pilot treatment centre for Improving transparency of our their lives. customers who sustain whiplash injuries as core products a result of motor accidents. In Delta Lloyd, high standards of integrity Although we have yet to introduce one are incorporated in product development overarching customer policy to support our Aviva India broadens reach of processes. For example, new information diverse business activities, the standards of insurance leaflets have been produced for customers business conduct policy does provide Aviva India continues to offer low premium who purchase life insurance and minimum standards for the Aviva products for the rural areas as well as for investment products to help ensure open businesses to follow in seeking to provide people from economically underprivileged and clear explanation of the products our customers with a service hallmarked by backgrounds. The products; Amar available to customers. integrity, quality and care. Suraksha, Anmol Suraksha and Jana Suraksha are distributed both through the In Lithuania, our business has developed a Businesses throughout Aviva are also direct sales agent channel as well as new client manual disclosing major features committed to managing service levels through Aviva’s bancassurance partners. and charges applied by the company to help offered to customers and are continually customers understand its products better. seeking new and improved ways of Aviva India also has tie-ups with micro providing better customer service. finance institutions, like Basix, to distribute Being flexible to our customers’ its products to sections of society who The examples below highlight how our needs otherwise would not have access to businesses are putting customers at the Aviva Hungary developed an additional insurance. heart of business decision making, how we flexible rider (Portfolio Plus) to its existing unit-linked products, enabling clients to strive for optimum performance in service Promoting responsible driving make cash withdrawals from the standards and how we seek to integrate Aviva Canada launched a new motor policy accumulated fund at favourable terms. CSR into our core products. in February 2005, called Autograph. This innovative product is based on the principle Socially responsible investment that an individual’s driving behaviour (SRI) should affect how much he or she pays for Morley Fund Management’s SRI portfolios insurance. It also promotes environmental continue to grow consistently. During consciousness, by rewarding those who 2004, Morley added around £140 million drive less and hence contribute less to of new business to its SRI funds, taking the environmental pollution. Autograph total funds under management in SRI to enables the individual to have more control approximately £700 million. 16 over their insurance costs.

Aviva plc Corporate social responsibility report 2005 In addition to the products and services Improving the service delivery Measuring and monitoring offered by Morley’s SRI team, it also process in Aviva USA customer satisfaction manages the Igloo regeneration fund – an Aviva USA’s call centre has worked innovative urban regeneration programme, throughout 2004 to improve the service Positive survey trends across Delta delivering social and environmental benefits provided to customers. Part of this was the Lloyd Group whilst achieving strong financial returns. creation of four teams to help improve the The annual results from the performance service delivery process focusing on: Hibernian Investment Managers, now part of research of Delta Lloyd Verzekeringen leadership, quality, process and the Morley group, continue to promote SRI (business channelled through independent measurement. funds in Ireland, while Portfolio Partners, financial advisers) showed improvements Morley’s fund management company in The business also has a quality control for both the life and general insurance Australia, continues to align its practices with department which reviews samples of businesses. Morley. View the section on human rights for completed transactions to ensure accuracy Satisfactory customer survey details of Morley’s engagement practices. and professionalism of materials released to results in Aviva Romania producers and consumers. It also provides In June 2004, Aviva’s marketing Responsible customer service regular management reports illustrating department in Romania carried out a survey initiatives their findings and recommendations. to determine customer satisfaction during Building responsible partnerships their transactions with Aviva, any reasons A “welcome experience” in Aviva with our agents for dissatisfaction and also to begin Australia In France, Aviva launched an extranet, profiling Aviva clients. The results were Our business in Australia has implemented online communication tool, for its general satisfactory with more than 94% of an “Aviva Welcome Experience” which insurance agents. The extranet is designed respondents being “satisfied” with the introduces and welcomes new advisers to to provide agents with better knowledge relationship they have with Aviva. Aviva. This new initiative helps advisers to and understanding of customer’s needs, Ongoing monitoring and understand the company’s processes and which in turn will result in enhanced measuring in Norwich Union systems when writing new business. In provision of customer service. Insurance 2005, the business aims to implement a In Aviva Italy, regular meetings are held Norwich Union Insurance has a variety of “Navigator Welcome Experience” for with intermediaries in order to monitor means by which it monitors and measures Navigator advisers, supporting one of the their satisfaction levels of Aviva’s service. customer satisfaction across its product largest investment portfolio administration Specific activities are in place to consider range. An internal claims satisfaction businesses in Australia. This will provide an the requests/suggestions raised by programme provides an overview of the opportunity to demonstrate the company’s intermediaries with a focus on improving entire claims service, tracking all aspects of values in action and to make brand the existing levels of service. the claim and providing quarterly reports advocates of the new advisers. The success on performance. Research continually of these initiatives will be monitored, with Being closer to our end customer highlights that a key driver of claimants‘ some initial feedback on the “Aviva in Italy satisfaction is the repair/replacement of Welcome Experience” being very positive. In 2005, Aviva Italy will implement a new damaged property. A supplier-wide study is system to enable more direct contact with The business also established a claims undertaken providing monthly the end customer, via the company’s working party to review processes and measurement and to pinpoint areas of website. This will enable customers to both identify ways to improve the claims improvement for its suppliers. obtain information regarding life insurance experience. It also produced market leading products and to make/register claims. claims brochures and medical guides to help clients understand its claims processes and the actual medical conditions its policies cover. 17 Customers continued

Full CSR Report on aviva.com/csr05

Grant Barrans, Director, Aviva Life International (left) and Bryan Jenkins, CEO, Hibernian with the Irish Quality & Excellence Awards.

Measuring call centre performance Norwich Union Life received several awards For the second consecutive year, the life in Norwich Union Life at the Financial Adviser Life and Pensions company in Poland received the Fair Play Norwich Union Life has a comprehensive Awards in July 2004, including: Award granted by insurance brokers to the tracking programme, measuring friendliest insurance company. • Long-Term Care Insurance Company of satisfaction with its call centres on a the Year In 2004, Aviva Czech Republic’s Flexible continuous basis and satisfaction with Protection Plan was awarded 2nd place for complaints handling. During the course of • A Gold rated Pensions Company of the the most popular financial product on the 2004, the business has made significant Year market. improvements in access to its call centres • A Gold rated Critical Illness Company cutting the time to get through from 65 of the Year Fund management seconds to 22 seconds. Morley Fund Management received the • A Gold rated Term Assurance following awards in the Standard & Poor’s Company of the Year Awards and recognition Fund Awards 2004: It was also awarded Best Life Protection • Morley Sustainable Future Corporate Below are some examples of key industry Provider and Best Healthcare Provider at the Bond Fund – awarded 1st place over awards received for performance excellence Money Marketing Financial Services Awards One Year, UK Marketed Funds class, during 2004. They provide a measure of in April 2004. Fixed Income GBP-Corporate sector, the success of our products and services. In Spain, one of the Aviva Vida y Pensiones out of 88 funds. General insurance pension plan products was awarded second • Norwich UK Ethical Fund – awarded In 2004, Norwich Union Insurance was position in Morningstar and Intereconomía 1st place over One Year, UK Marketed awarded General Insurer of the Year by the product rankings. Aseval, another of our Funds class, Ethical UK Sector, out of Insurance Times Awards and was also companies in Spain, reached the final 19 funds. announced Best General Insurer in the round of the competition to find the best Personal Finance and Savings Partnership Pension Plan Manager. • Aviva European Corporate Bond Fund awards. – awarded 1st place over One Year, UK In 2004, Hibernian Life & Pensions was Marketed Funds class, Fixed Income Hibernian’s direct business was awarded awarded the Recognition of Excellence EUR sector, out of 40 funds. the Q-mark from Excellence Ireland in from the European Foundation of Quality 2004, in recognition of its quality and Management and, in addition, were the • Aviva European Corporate Bond Fund improvement efforts in its business overall winners at the Irish Quality & – awarded 1st place over Five Years, processes. Excellence Awards. UK Marketed Funds class, Fixed Income EUR sector, out of 20 funds. The general insurance business in Poland Commercial Union Polska received three received The Best Business Partner award European Medals from the Office for Morley Properties was awarded Property for the best insurance company from Home European Integration and the Business Fund Manager of the Year in the 2004 & Market magazine. Centre Club for products and services that Property Awards, while also being Highly are of exceptional European value, namely: Commended for Property in the Global Life and pensions Investor Awards for Investment Excellence. Aviva Romania was awarded The Life • a Unit-Linked Life Insurance product, In France, Aviva Gestion d’Actifs has won Insurer of the Year award in a special gala • an investment fund, the Stable the ”Victoire des Sicav” from French daily evening. It also received recognition, Investment Fund, newspaper La Tribune and rating agency together with Medicover, for creativity and Standard & Poor’s for its investment co-operation in the development of Vero, a • an annual travel insurance product for performance over one, three and five years medical insurance product. people often travelling abroad. for its whole product range.

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Aviva plc Corporate social responsibility report 2005 Human rights

We continue to develop application of the Responsible investment Promoting diversity in the human rights policy within our operational includes advocating human workplace practice following its review in January of rights 2004. We revised our wording to take We believe that the recognition of individual ability, the absence of account of the International Labour Morley Fund Management’s Organisation’s core labour standards and approach to responsible investment discrimination and the positive promotion of attitudes towards diversity will draw the also to make it easier to understand. Morley Fund Management explicitly greatest results from our employees. Our understanding of the interface integrates analysis of performance in social, between human rights issues and the environmental and ethical (SEE) and In Aviva, promoting diversity means more practice of business continues to grow. We governance issues into its investment than providing equality of opportunity for believe that the content of this policy is process. Such analysis also includes both men and women and those from most likely to evolve over coming years. At examination of human rights performance. ethnic minorities. It means recognising, for example, that individual differences in age, Aviva, we have identified three principal The dedicated socially responsible physical ability, sexual orientation, lifestyle, areas for managing and promoting good investment (SRI) and corporate governance priorities, religion and beliefs can be human rights practices: through fund (CG) teams have a mandate to engage with harnessed to the business’s benefit. management; through purchasing; and in companies on behalf of all of Morley’s Leading our work on this journey is Aviva’s the promotion of diversity in the assets under management and a global newly appointed group diversity director, workplace. Two are dealt with in this approach is taken to engagement. whose first task since taking on the role section, whilst the third, advocacy of Managing assets in excess of 1% of the UK was to establish an executive-level diversity human rights in our purchasing practices, is stock market means that its levers for steering group made up of eight executives dealt with in the section on suppliers. change are at present strongest in the UK, from Aviva’s businesses around the world. but Morley also has holdings in companies operating in Europe, the US, Asia and The steering group’s mandate is to provide emerging markets. In 2004 the SRI and CG vision and leadership, to recommend and teams met with over 250 companies to facilitate the implementation of initiatives, raise SEE or governance concerns with to review data and metrics to support management. progress and to share good practice in the diversity arena. Morley continued to exert its shareholder voting rights in 2004 – voting against Efforts to raise the profile of diversity within companies with inadequate corporate Aviva have included diversity features in the governance policies and performance. group chief executive’s employee messages, Morley will also extend its existing voting regular diversity updates and news stories policy to encompass reporting of all and weaving diversity awareness into the relevant SEE and governance issues for Aviva Leadership Academy syllabus. FTSE350 companies in 2005.

Aviva USA developed sales brochures in Chinese and Spanish to support the sale of life insurance products to Asian and Hispanic communities. 19 Human rights continued

Full CSR Report on aviva.com/csr05 Aviva diversity vision

Diversity is about everyone. We believe in a working culture that respects, celebrates and harnesses difference to the benefit of customers, employees, shareholders, business partners and the wider communities. Our competitive advantage depends on business teams that include people with different backgrounds, experiences and perspectives, who feel valued for the positive contribution they can make to Aviva’s success.

Diversity in Aviva Benchmarking Aviva’s diversity In Aviva Australia, the flexible working As a group, 51% of our workforce is performance arrangement policy assists employees female. Of our 430 senior managers across Participation in recognised diversity returning from parental leave through offers the organisation, 17% are female (a 1% benchmarking assessments enables us to of reduced hours, job sharing and increase on last year’s figure of 16%), with target our diversity initiatives and provides telecommuting. one of the highest representation of female access to knowledge sharing and Across the Aviva group, 14% of our senior managers being in our head office competitor practice networks. Results of employees work part-time; in Delta Lloyd, where 23.5% of senior managers are 2004 participation include: 37% of employees work part-time, in women. • In the UK, Opportunity Now, a Norwich Union Insurance 16% and in In 2004, 50% of Aviva France’s promotions business-led campaign that works with Norwich Union Life 12.4%. to director level were female. In Eurovida, employers to realise the economic Diversity training in our businesses our Portuguese business, 25% of local potential that women contribute to the Training on equal opportunities issues is senior management and 62% of workforce, awarded a silver rating to mandatory for managers in the majority of management is female. Aviva, an improvement on the bronze our businesses. These businesses cover 85% award received previously. We cannot provide consolidated of our staff. Training programmes range information on ethnic diversity across the • We received a certificate for from presentations to team meetings on group due to legal restrictions on participation in Business in the equal opportunities by senior management requesting, holding and reporting on Community’s Race for Opportunity in Aviva Romania, to an initiative within ethnicity in many of the countries in which benchmarking. Delta Lloyd to broaden the focus of its equal we operate. A similar picture applies to • As a group, Aviva was rated 26th in opportunities training to ensure that reporting on disability. Cranfield’s Female FTSE index and minorities, including older employees, are In Aviva USA, efforts have been made to second placed insurance company. adequately covered. Morley Fund seek more diversity in recruitment and this Management’s Respect at Work initiative, • Stonewall’s Corporate Equality Index for is reflected in ethnic monitoring results, introduced in 2003, focuses on fostering lesbians, gays and bisexuals in the UK with significantly broader ethnic diversity in teamwork and ensuring that employees ranked Aviva as one of the top 100 new hires than the whole employee embody integrity at all times, promoting the employers for gay people, one of only population. ethos of a positive working environment by twelve FTSE companies to make the list. addressing issues such as organisational In the UK, our human resources diversity Promoting flexible working practices culture and climate, working relationships forum is reviewing recruitment practices Another means of supporting diversity is and embracing difference. with the objective of improving through offering flexible and part-time representation. In 2005, our diversity focus will broaden working patterns. In the UK, Norwich Union further, with projects to review the Insurance’s flexible working pilot was potential for age discrimination in the UK, extended in 2004 to cover compressed and working with various diversity forums working hours, staggered hours, time-out and specialists across the business units to days, ability to opt to take bank holidays at implement workstreams on customer and different points in the year and an extension employee data; skills training; employee of current flexi-time arrangements. Norwich networks; and increasing innovation into Union Life is also piloting a flexible working our key human resources programmes to programme. meet the needs of our employees.

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Aviva plc Corporate social responsibility report 2005 Workforce

Aviva Values

Our people are pivotal to Aviva’s success. projects and initiatives differ from business Retention Our people strategy in all the countries in to business, each will be underpinned by a To retain our employees we offer a creative which we operate is to: clear strategy, by our values – performance, reward “package” that meets individuals’ financial needs as well as their aspirations • attract and retain top talent while progressiveness, teamwork and integrity for a positive working environment and embodying good corporate governance and by the principles of social responsibility. opportunities for personal development. practice; A broad set of people performance indicators ensures that an overview of The group reward policy requires all our • foster morale in times of radical businesses to offer competitive rates of pay progress against the strategy is measured change; to all their employees and a host of and assessed. • deliver excellent customer service while initiatives are in place to build our offering This report provides examples of some of the exploring and implementing new to employees around their working work that has been accomplished in 2004. customer service models; and environment and their personal More details and people performance development. Many of these are described • invest in the development of our indicators can be found in the business unit later in this report. Illustrative of our success employees while controlling costs. reports on www.aviva.com/csr05. in developing this offering to employees is This strategy captures our individual Aviva India’s ranking as the best insurer to business unit and collective Aviva aspiration work for in the country’s ”Great Places to Dealing with structural to be an employer of choice. Work” survey. Hibernian Life & Pensions change were recognised as being one of the top 50 As in previous years, our reporting on our companies to work for in Ireland in 2004 for workforce follows the guidelines of the Recruitment the third successive year. Managing Change Report produced for the In recruiting employees our aim is to place Both employee retention and involvement European Commission led by Aviva’s the best people in the right roles. The group in the business are promoted through Chairman, Pehr Gyllenhammar. These recruitment policy states that each Aviva incentive packages that tie elements of pay guidelines require reporting under the business unit must have in place a well and reward to business success (both short following headings: structured, fair recruitment policy. Across the and long-term). In the UK and Ireland, all Dealing with structural change; group worldwide, this means we need to • employee share ownership plans innovate constantly to ensure that our • Communication and involvement / encourage employees to own a stake in recruitment campaigns are reaching as wide social dialogue; and Aviva and to align their behaviours to a talent pool as possible. These efforts can business success. In the majority of our • Education and training. involve anything from ensuring that job other business units, employees share in advertisements are positioned accessibly (for Other areas of the “Gyllenhammar the company’s success through a variety of example, Aviva Czech Republic advertises its framework” that impact our people are cash-based incentive plans. diversity and health and safety. Aviva’s jobs in the tram network in the larger cities) We measure our ability to retain employees progress in diversity is outlined in the to sophisticated recruitment supplier through monitoring voluntary turnover human rights section of this report (see relationships. In the UK, Norwich Union figures. Across the group, this varies page 19). A separate section on health and Insurance, together with Scottish Enterprise safety across the Aviva group can be found will be launching a pre-recruitment course, typically from 1 to 20%, reflecting our on page 24. aimed at providing potential candidates with ability to retain our people and the differing a sense of what it would be like working for job markets in which they are employed. Each of Aviva’s business units has a human the company. Other initiatives in the UK Staff turnover in Norwich Union Insurance resources function that implements a include working with Jobcentre Plus, a call centres dropped from 25% to 15% people strategy aligned to both the business recruitment service helping to target specific through its Leadership and Care unit’s overall strategy and our group’s groups, including returning mothers, New programme, which places customers and people strategy (see above). While specific Deal candidates and early retirees. staff firmly at the organisation's centre. 21 Workforce continued

Restructuring Aviva France’s relocation to new sessions where employees of all levels are During 2004, several of the group’s headquarters resulted in an agreement with invited to meet members of the executive businesses have undergone significant employee representatives which provided team. Similar practices are replicated in restructuring programmes, including off- for incentives and compensation for other business units. In our Turkish shoring call centres and finance operations additional employee commutes. businesses “values representatives” have to India and Sri Lanka. This has resulted in used the opportunity of the transition from In Italy, the merger between Commercial both the loss of some roles and the Union Italia and Commercial Union Insurance the Commercial Union to Aviva brand in creation of others. Across our operating resulted in a small number of redundancies. 2005 to discuss and embed the Aviva units, retraining, redeploying, relocating Working with the trade union, the impact of Values with employees across the business. and early retirement options are all these was minimised with compulsory In Aviva India, “Town Halls” – regular considered and adopted as fully as possible redundancies being a last option. meetings between employees and senior before any compulsory redundancies are management in head office – facilitate an made. Our major business units provide open culture and encourage employees to Communication and outplacement services or assistance to engage with substantial business issues. In employees facing redundancy, covering involvement / social dialogue Aviva Romania, the company has started to 84% of our workforce. Communication with our workforce takes a negotiate a collective work contract which In the UK, Norwich Union Life established a variety of forms, depending upon the will cover work conditions and new team in 2004 to support employees at legislative and cultural framework in each environment, health and safety, wages and risk of redundancy. Since the creation of of the countries in which we operate. social conditions. Aviva Asia encourages the team in May 2004, 41 roles have been and recognises creativity through various We value input from our employees and secured through this redeployment staff suggestion schemes. actively seek it though a variety of means: initiative. Likewise, the introduction of new employee representative groups, employee Employee opinion surveys technology in Aviva Canada resulted in surveys, intranet sites, trade union In 2004, employee opinion surveys were fewer redundancies as a number of the relationships and focus groups. run in 65% of our business units, seeking employees impacted were redeployed to gain the views of 82% of our people. As within the organisation. Across our European business units, the an example, in Asia, 1,168 staff were continued strengthening of our european Morley Fund Management made significant surveyed of whom 70% of respondents consultative forum has helped further our changes to its operational infrastructure were satisfied with Aviva as a place to dialogue with employees on topics ranging when it transferred its UK operations team work. This was an increase of 6% on the from new working methods to offshoring. In to JP Morgan in a market leading initiative previous survey conducted in 2002. the UK, Aviva has a partnership agreement to develop an investment administration with the UK trade union Amicus that both In Aviva Australia, quarterly employee service for fund managers. Although 163 parties signed up to in January 2003. This briefings and opinion surveys whose results employees were transferred, no agreement specifies the topics on which are benchmarked externally against the redundancies were necessary. Employees Aviva will consult with Amicus and resulted Australian financial services industry feed were notified of the initiative 12 months in the introduction of employee forums, in into the development of business and before the transfer and a series of people strategies. communications forums throughout the all the UK businesses, comprising both year kept employees informed of the nominated union representatives and In 2005 we will implement a groupwide project’s progress. Managing change elected employee representatives. employee climate survey. This survey will workshops, employees‘ briefing sessions In Morley Fund Management, initiatives in enable us to benchmark employees’ and a designated intranet site assisted the place to engage staff with business issues responses, to draw upon best practice areas transition programme. include an annual employee conference; across the group and to focus future Morley ideas – an employee suggestion strategies accordingly. 22 scheme; and, “Around the table with…”

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Employee satisfaction will become a key performance indicator in the group’s performance management framework and a factor in management reward.

Education and training In Norwich Union Central Services, an area The Aviva Leadership Academy runs a suite of focus has been internal coaching. Four of programmes for a diverse constituency Our group management development and employees have successfully taken a of managers from across the business. It training policy states that the company will diploma in Professional Coaching and has recently partnered with Enable, an invest in its employees’ training and Mentoring. These coaches are now organisation which teams up charities and development, building their capabilities to working with senior managers to improve companies with the objective of developing meet the business plans and provide performance and to embed a coaching team skills whilst delivering tangible internal management succession. The management style. benefits to a charity. In 2004, the process of training and development begins refurbishment of a children’s hospice for Aviva’s head office has strengthened links with the induction or orientation NCH, the UK’s leading children’s charity, with the Black Business Brokerage, by programme that takes place when a new provided opportunities to develop staff and providing business mentors to developing employee joins the company. In Aviva India support the charity. Employees not only ethnic minority businesses in London and, a “buddy” programme that forms part of undertook the refurbishment work but also increasingly, acting in an advisory capacity the induction process was found to be the produced a video of the experience to help to the organisation. Aviva’s contribution most effective induction initiative by 85% the charity market itself successfully with was recognised at a launch event to the of new joiners. other potential business partners. London business community during 2004. Business units’ interpretation and The group’s partnerships with organisations Norwich Union Insurance’s development implementation of the management such as Raleigh International and Enable activity has focused on its strategy to development and training policy vary are examples of the link Aviva makes become a truly customer focused service depending upon local practice and norms. between volunteering and community provider. Various initiatives, including Typically, employees are encouraged to work and its people’s development. This behavioural leadership courses for team consider their personal development and to initiative will be developed further in 2005. managers, a customer service academy and identify areas where both they and the supporting young enterprise projects have business can benefit from further learning. formed part of the business‘s ongoing development of its people. Norwich Union employees have also teamed up with colleagues from Canada and Ireland, constructing community playgrounds in Namibia with Raleigh International.

Employees from an Aviva group development programme prepare for a teambuilding exercise. 23 Health and safety

Aviva is committed to creating and A key aspect of the group’s 2004 health Managing stress in the maintaining a safe and healthy work and safety programme was a project to workplace environment for all our staff, including assess health and safety activities using a contractors, customers and members of the self assessment survey across the Aviva Managing stress in the workplace is a public. Aviva’s group human resources businesses. This was to ensure compliance health and safety priority in a number of director is responsible for the group health with Aviva’s policy and to begin developing our businesses. In some of our business and safety policy and for monitoring its a platform for good practice sharing and units, questions on stress, or related to implementation, supporting the group continuous improvement. stress, are included in employee opinion chief executive, who has overall surveys. The survey confirmed that overall Aviva is a responsibility for health and safety. low risk business; the key risks highlighted Stress management training continues to In the UK, each of Aviva’s five operating by the majority of business units were fire, be offered in a number of our businesses. business units has a health and safety eye/screen disorders, back/muscular or In one instance, training was provided for governance process in place. Each business skeletal disorders and stress. Our Asian call centre staff in Hong Kong giving tips on operates according to a policy that is businesses all highlighted the risk of disease how to overcome occupational stress in the compliant with the legal framework and epidemics for example, severe acute office. Throughout our major businesses, the group’s health and safety policy. These respiratory syndrome (SARS) and bird flu, a we offer confidential employee assistance policies detail responsibilities throughout contagious respiratory illness caused by programmes provided by an external the businesses highlighting the fact that influenza viruses. As a low risk business, supplier, which give support to employees each chief executive has nominated a much of the focus of health and safety on a wide range of issues including stress. director to be personally responsible to him teams in Aviva is on occupational health; During 2004, a cross UK business unit for health and safety performance. Each of for example, taking preventative measures project on workplace stress was the nominated directors has appointed a against stress through sports and social undertaken. The project involved steering group to assist them in discharging programmes, activities to improve work/life identifying stress risk areas and actions to their responsibilities; these groups meet balance and to improve the working improve stress identification and quarterly. environment. management and drew on expertise from In the business units outside the UK, the health and safety executive and business unit heads sign off quarterly to Institute of Personnel and Development. their compliance with the group health and This work resulted in a best practice model safety policy as part of Aviva’s business risk that was used as the basis for diagnostic programme. work in each of the UK businesses.

An audit programme is in place to assess performance across the businesses, either through business unit visits, in the UK, or through self assessment returns, outside the UK.

Performance in health and safety is measured through the number of major breaches of the group’s policy. This was nil in 2004.

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Promoting healthy lifestyles Providing a safe working environment The majority of our businesses offer recreational activities and promote The provision of a safe working employee participation in sports activities to environment is paramount for our staff promote healthy living. Some businesses around the Aviva group. Businesses ensure also provide relaxation methods, from working environments are of appropriate massage sessions to yoga classes for staff. standards to ensure our staff are suitably supported to carry out their work. Examples of some of the good practice arrangements around the group include In 2004, Hibernian in Ireland launched a risk sports events arranged by a social club in assessment programme in addition to the Aviva Czech Republic; the provision of current procedures to assess health and executive health checks; assisting safety status in all retail offices. Hibernian employees returning to work after illness; also extended its health and safety training the promotion of a no-smoking programme to include both manual environment and encouraging employees handling and training as visual display unit to take all their annual leave entitlement in assessors. An e-learning product providing Aviva Australia; the offer of vaccination training and assessments in the use of programmes in our life business in Turkey; display screen equipment was piloted in encouraging exercise through free sports 2004 and this is to be extended across the passes in Aviva Hungary; and the provision business in 2005. of a fitness centre and physiotherapy centre In the USA, Aviva conducted a health & in Delta Lloyd. safety audit in 2003 of its main building to In Turkey, Aviva Sigorta provides a doctor ensure compliance with all local codes and twice a week, private health insurance and regulations, for example corridor widths and first aid training as part of its occupational entry and exit routes. It has now also sought health offering. In addition to this, the the expertise of an ergonomic specialist to business runs a “Fun Club” – a social club advise the IT installation team on best which aims to support employees in practices regarding workstation set-up. achieving work/life balance and also makes In Hong Kong, awareness and training a summer house available to employees for sessions were run by staff from the short holidays. Occupational Safety & Health Council for The Aviva businesses in Asia have all employees who work with display screen undertaken to provide staff with equipment for prolonged periods. opportunities to maintain healthy lifestyles. For example, rolling out a series of special policies to meet epidemic outbreak challenges such as SARS and bird flu and the development of an emergency action plan. In Singapore, health talks and sports activities ranging from a company-wide “Active” day to classes on specific sports are organised for employees. Aviva Australia encourages healthy living through its rooftop sports facility for staff. 25 Suppliers

Aviva suppliers and CSR 2000

1500

1000

500

0 2000 2001 2002 2003 2004 The purchasing & supply management Promoting responsible No. of suppliers No. of suppliers approached about making function in Norwich Union Central Services supplier management environment/CSR improvements (NUCS) in the UK is responsible for the management of the Aviva groupwide The focus on responsible supplier Selecting responsible suppliers in purchasing, sourcing and outsourcing management has grown over the last year Australia policies and also has the responsibility for throughout the Aviva businesses In addition to discussing CSR issues with reporting on compliance with those policies worldwide. At the beginning of 2005 two key suppliers, Aviva Australia has also to the Aviva group executive. new roles were created to determine and chosen partners specifically for their share good practice in this area; head of environmental performance and ability to In 2004, the group executive gave their supply relationship management and head recycle certain unwanted materials. backing to launch a Global Purchasing of international purchasing. These roles and Practice in 2005. This will create an Aviva- Building responsible supplier the revision of the group purchasing policy wide action network with central relationships in India will help determine and monitor our future governance and best practice support for Aviva India has teamed up with Hewlett purchasing performance. local purchasing activity across the general Packard in effectively managing the insurance and life businesses worldwide. To date, 75% of our businesses worldwide recycling of used printer cartridges. Launched in the first half of 2005, this will include CSR aspects in supplier tendering Also, contractors are instructed to use build expert capabilities so that all Aviva processes and some examples are waste wooden material left after businesses can benefit from economies of described below. completion of interior works for making scale and develop consistent standards of furniture items which can be donated to Inclusion of CSR questions in the competence and development. charities or schools run for economically purchasing process underprivileged children. The outsourcing policy, released in late In the UK, the new CSR question set for use 2003, has become well embedded in the in the purchasing process was completed in Robust supplier management UK during 2004 and work is underway to 2004 and is now being utilised by the process in Ireland provide focus across non-UK Aviva purchasing team. The document uses the Hibernian’s property & procurement businesses. The purchasing policy, released previous environmental question set as a department has introduced a robust supplier in 2001, is under review recognising basis, but now includes social and ethical management process for all its main changes in structure and scope of the issues and has been made as generic as operational suppliers, some 20 in total. purchasing & supply management team possible for use in all business units. Throughout the year, the business has, in and will include references to the wider The document consists of 39 commodity some instances, contributed to suppliers‘ CSR context rather than our original purely question sets which include everything strategy meetings and has worked closely environmental focus. from paper purchasing to the provision of with them on their supplier management building maintenance. A risk/impact matrix processes. It has also hosted a suppliers’ has also been included so purchasers are conference which included a presentation in which the company’s approach to CSR aware of how much weighting should be was explained and the importance of CSR applied to the CSR questions in the overall values to Aviva and Hibernian. tender process. These question sets have, so far, been used in tenders for everything from IT to suppliers of staff for temporary employment.

Morley Fund Management has also created CSR question sets for use by its suppliers, covering its own particular purchasing 26 requirements.

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Promotion of Fairtrade products in Supporting timely supplier Morley Fund Management’s the UK payment methods commitment to reducing overdue Following the successful pilot of Fairtrade payments products in the cafés and refreshment areas The group's standard payment terms are 28 According to monthly statistics, Morley in the UK towards the end of 2003, days from date of invoice, however, Fund Management pay just over 50% of Avenance, the Aviva UK’s caterers, now offer payment practices are often in line with the suppliers within the contractual payment a range of Fairtrade products as standard, local country practices. For example, in terms. On average 50% of invoices are including tea, coffee and chocolate bars. Delta Lloyd, payment terms vary between overdue before the authorised invoices are 30 and 45 days, depending on the type of returned to the finance department. There Socially responsible contracts for business, which conforms to local norms. is a huge focus in 2005 to significantly support services In some cases, businesses support payment reduce the percentage to under 20%. To At the end of 2003, Aviva was contacted practices which are better than the local help improve payment procedures, resource by TELCO (The East London Communities norms, paying within half the standard was re-allocated within the finance team Organisation) who were approaching payment terms. resulting in a full time corporate accounts companies in London’s financial districts to payable clerk. This has already produced a promote socially responsible contracting for Exceeding local payment term remarkable improvement on the turn- support services, such as cleaners and norms around time within finance in the latter caterers. In Turkey, our businesses have agreed part of the year. In 2005, the finance team payment terms of 15 days after receipt of TELCO highlighted to us the issue of the will also begin sending a standard email invoice and it is one of the few companies difference between the government’s alert, promoting prompt action, to all to meet these terms as the normal practice national minimum wage and the concept managers responsible for authorising in Turkey is to delay payment as much as of the living wage needed in London and invoices, if invoices are not returned to possible. Also Hibernian and Commercial proposed minimum standards for a socially finance within seven days. Union Lithuania are committed to paying responsible contract. suppliers within agreed time frames, which Although such workers are not directly in are typically better than the local norms. our employ, Aviva made sure that the Norwich Union Insurance’s Supplier provisions of the living wage were Electronic Payments (SePs) system respected including conditions such as The roll out of Norwich Union Insurance’s holidays and sick pay. In doing so, we co- Supplier Electronic Payments (SePs) has operated closely with the support services continued during 2004 with 145 suppliers companies where these employees are now utilising or registered to the payment directly employed. system. This is an increase of over 100% on the previous year. By mid December 2004, over half a million invoices had been processed via SePs paying a total in excess of £237,000,000 in fees. The SePs roll out will continue into 2005 with the majority of the legal panel and medical and physiotherapy suppliers using the system.

27 Community

Aviva’s global community investment for 2004

Cash £3,840,000

Gifts in kind £97,500

Staff time £322,000

Management time £360,000

In 2004, Aviva worldwide businesses Building committed Supporting our local donated over £4.6 million, matching the partnerships communities previous year’s total, to numerous charitable organisations and community It is common practice for businesses to select Supporting youth education and initiatives. key charities through which to channel their development support to ensure both parties receive value Our support not only includes that of core In France, the Aviva Foundation donated from the partnership. For example, in funding, but also the investment of staff some 28,000 (some £19,000) to Australia, Aviva’s Guiding Star charities time and donations of gifts in kind, as Mouvement pour les Villages d’Enfants, commitee has six key charities through which calculated according to Business in the which reunites orphaned siblings and the majority of its community investment is Community’s PerCent Standard. assists children who have been victims of channelled. Aviva France continues to physical and mental abuse, rehabilitating A key development over the year has been support the elderly and children from them in “Children’s Villages”. The grant the significant increase in the time spent by disadvantaged backgrounds through the will enable, for example, the establishment staff in supporting company sponsored Aviva Foundation, while our businesses in the of a literary prize and music therapy initiatives. In 2004, some 19,000 hours USA and Canada continue their long- workshops, a new garden and an were donated to community-based standing support of the United Way educational farm in the different villages. activities, compared to 11,500 in 2003. campaign, an umbrella charitable organisation supporting many different In Singapore, Aviva identified Pertapis The group sponsorship and community community groups, both locally and Children’s Home as a key charity to support investment policy provides guidance on the nationally. during 2004 and initiated numerous fund types of activities the businesses should raising schemes for the charity. support. Generally, businesses channel their In the UK, Norwich Union is entering its community investment support to initiatives third year of a five year partnership with Hibernian Life & Pensions will participate in such as youth education and development, NCH, the UK’s leading children’s charity. the Dublin City University Access health and welfare of the elderly and The partnership – “Young Lives, your Programme in 2005, which provides disadvantaged communities and also Future” – helps support the young people support for students from traditionally non- business-related activities such as crime NCH works with in a variety of ways and university going backgrounds to enable prevention campaigns. allows them to feel integrated and them to complete tertiary education. The accepted within their community. To date business will sponsor five students over four Most business units have established the company has also enabled some 600 years with a grant of 2,000 each per year. community investment programmes in employees to participate in volunteering Additionally, it will link with the university’s place which are managed locally by either a activities. Also, the business has teamed up mentoring programme, volunteering staff to committee or in the smaller units, by the with Future Forests, an organisation which act as mentors for the students. local chief executive. They support charities offsets CO emissions, and will plant a tree in numerous ways, largely through financial 2 Promoting health and social on behalf of each employee participating in donations, but also through staff welfare the volunteering activity. volunteering and the donations of gifts in In Canada, Aviva began a five-year kind, for example unused office furniture, partnership with the Scarborough General old computers and specifically in the UK, Hospital Foundation to support the the use of office space free of charge. construction of a new emergency critical care wing. The new hospital wing aims to help provide enhanced emergency care for one of Greater Toronto Area’s fastest growing communities.

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Aviva’s response to Tsunami disaster Helping to conserve the Staff involvement in Asia environment Aviva’s businesses also responded charitably Aviva Vida y Pensiones in Spain and our Our businesses around the group to the Tsunami disaster recovery fund, with businesses in Turkey supported local encourage employees to support local many businesses committing funding and environmental “clean-up” campaigns in community initiatives. Staff involvement matching staff support through a one-day 2004. across the businesses varies from salary sacrifice scheme, whereby staff were participation in volunteering opportunities, In Turkey, the life and pensions business able to donate an amount of their choice payroll giving schemes, enabling staff to planted trees for every staff member as part or a day’s salary, which the company donate directly from their salary to charities of its first year in the pensions market. It matched. Staff also further supported the supported by the company and the offer of also specifically selected the city of Sivas to cause through the donation of blankets, staff community awards, whereby staff can help contribute to the reforestation of the clothing and other essential supplies. apply for funds to support a charity of their city, which loses its fertile soil each year due choice which they actively support. Pennies By the end of February 2005, the group to erosion. from Heaven is another scheme offered in had committed more than £500,000, In the UK, Aviva’s long-standing support for the UK, whereby staff can round down some of which represented matched BTCV, the UK’s leading conservation charity their salaries to the nearest pound and the funding for donations by staff which continues to enable annually some 50 difference is donated to charity. totalled around £200,000. employees to participate in a conservation Many of our businesses also support holiday to contribute to the preservation of Community investment in line with matched funding of staff fundraising the natural environment. core business initiatives. Following the successful pilot of the In 2005 Norwich Union Life will be Norwich Union Neighbourhood Apprentice In Lithuania employees expressed solidarity sponsoring a new children’s book from the Scheme in the UK, which sought to train and by common consent contributed their “Go M.A.D.” series of books. The book is local residents in high crime areas in 2% share of income tax paid in 2003 (in aimed at nurturing environmental community safety, community development accordance with local legislation) to an responsibility among children aged and project management, it is hoped that orphanage in Vilnius, which the company between 8-11 years old. the positive findings from the pilot will supports. Staff also spent time with the encourage crime and disorder agencies orphans at a pre-Christmas festival. across England and Wales to replicate the Norwich Union Insurance has an active scheme in their own local communities. mentoring scheme in which staff support The success of this scheme prompted the community groups, students and head recent launch of the Norwich Union Youth teachers in schools. Apprentice Scheme. The aim of this scheme In some instances, staff also have the is to enable neighbourhood based work to opportunity to select the charity a business be owned, developed, driven and shall support during a reporting year. documented by young people themselves. For example, in the UK, staff are eligible to In Canada, Aviva continued to support the nominate and vote for a charity of the year Neighbourhood Watch programme in which both employees and the business helping to revamp the organisation’s website, will support during one calendar year. In which began in 2003, to increase public 2004 the UK’s chosen charity was The awareness of community crime prevention. Association of Children’s Hospices, which received a record £225,000 from staff donations and company matched funding.

Staff in Aviva Hayat ve Emeklilik prepare to plant trees in Sivas, Turkey. 29 Environment

Aviva France’s new offices in Bois-Colombes as referred to below.

Climate change is recognised by Aviva as the Total CO2 emissions Property management most significant of environmental challenges, 160000 The number of properties held has decreased which we, and society, face. Aviva’s significantly over this last year with, in environmental footprint arises through our 120000 particular, the closure and sale respectively of own direct operations such as property the UK insurance brokerage, Hill House management and travel, but also indirectly Hammond and the estate agency, Your through our investment influence and 80000 Move. The sale of our general insurance through the way in which we design our business in Asia also contributed to this products and services and deliver them to change. Despite this, our total property area customers. Our environmental programme 40000 has stayed the same due to the first time continues to gain recognition. In 2004, the reporting of Aviva Czech Republic and the Carbon Disclosure Project, an alliance of 95 widening scope of data collection in Hungary institutional investors representing some $10 0 as well as other minor changes. trillion, placed Aviva among the 50 “best in 2000 2001 2002 2003 2004 class” in its global climate leadership index. Staff no. CO2 tonnes In the UK we have also entered a programme The index is based on evidence of of the sale and leaseback of some of our greenhouse gas emissions among the FT500 properties. Seventeen locations have been largest companies in the world. sold so far and the landlords have begun a process of refurbishment with the inclusion of We do not believe in the setting of environmental features. This has begun with groupwide targets for managing our direct the Norwich Union Insurance head office in environmental impacts. This would not Norwich. Bovis, the appointed contractors for make sense given the diverse nature, size the refurbishment programme had, by the and circumstances of our businesses. end of 2004 removed 6,000m3 of demolition However, we have specified three group materials from the site. This is the equivalent performance indicators focusing on our of 44 double-decker buses. To minimise businesses‘ total CO2 output, total waste waste all the concrete and steel materials and total waste recycled. were recycled. All our businesses report on at least one or In France, Aviva built a new head office in a all of the direct environmental impacts location outside the centre of Paris. identified by the group. The examples Environmental criteria were included in the below highlight the progress we have made tendering contract and the new building in reducing our environmental impact. displays environmental construction We report on our indirect impacts features and fittings. separately in the sections on human rights and customers.

Environmental awareness raising leaflet distributed to staff 30 in the UK.

Aviva plc Corporate social responsibility report 2005 Buidings-related energy, CO2 tonnes and property area 140000 450

400 120000

350 100000 300

80000 250 GWh 60000 200 Area and tonnes Area 150 40000 100

20000 Energy and water use Paper use 50

0 0 Excellent achievements have been secured in Our businesses continue to focus on 2000 2001 2002 2003 2004 the minimisation of buildings-related carbon resource use, in particular paper and the Property area CO2 emissions Total GWh m² (x10) (tonnes) (electricity & gas) dioxide emissions, despite the property area close link between paper use and energy remaining the same. Electricity consumption use. Double-sided printing, for internal use, has reduced by 16% overall and related CO2 is increasingly common practice in most of emissions have reduced by 61.5%. Gas our businesses. In Norwich Union consumption has also reduced by 19%. Insurance, processes have been developed Amount of paper and envelopes purchased 20000 80000 These results have been achieved through a to print policy information double-sided. combination of reducing emissions at source “Document on demand” and other print and a greater focus on minimising usage. management systems have been 15000 60000 Reductions have been achieved through introduced into Aviva Canada and the purchasing of zero emission electricity Hibernian to reduce the amount of paper in our businesses in Hibernian (28%) and used. Aviva Hungary has arranged for faxes 10000 40000 the Norwich Union managed properties in to be received and stored electronically,

the UK (100%). Morley Fund encouraging printing only when necessary. Tonnes Staff Management’s offices also now use 100% 5000 20000 Electronic methods of communications zero emission electricity following have increased both internally and negotiations with its landlord in 2004. externally with intermediaries, suppliers and 0 0 There has also been greater focus on usage. other business partners. More forms are 2000 2001 2002 2003 2004 For example, plant timings for heating and web-based and in the UK, the payroll Paper purchased (tonnes) Envelopes purchased (tonnes) Staff no. air conditioning have been more closely system has embraced web-based data aligned with operational timings in our storage and during the course of 2005 will businesses in Canada and the UK. Aviva cease the process of printing and posting Vida y Pensiones in Spain has installed over 27,000 salary slips to employees, Aviva’s shareholders played their part in presence detectors in rooms, while in making these now available online. In reducing the environmental impact of the Hibernian, reductions in electricity usage addition, Aviva USA has dramatically business. Last year, Aviva invited have been achieved through rationalisation decreased the amount of paper used with shareholders to switch from receiving of electrical circuits. the development of web-based technology paper-based to electronic communications for human resources and payroll The majority of our businesses continue to to cut down on the use of natural resources processing. run staff awareness raising campaigns to and energy. As a further incentive, Aviva encourage “switching off” electrical Aviva Australia, Eurovida in Portugal and donated £25,000 to Climate Care to be equipment, where appropriate, and lights Aviva Spain have sourced paper with a used for climate change mitigation when not in use. In some businesses, higher percentage of recycled pulp. projects. A total of 3,850 tonnes of CO2 authority has been given to security guards Australia’s choice of paper for internal emissions were offset by these projects. and cleaners to assist in the switching off copiers and printers now contains 50% of equipment, which is not in use. recycled pulp. Aviva Australia has worked with suppliers to assist with the embedding of good CSR practice, for example, plumbers installing nozzles on all hot water taps to decrease spray and therefore unnecessary waste of water. 31 Environment continued

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Total waste 10000 80000

7500 60000

5000 40000 Tonnes Staff Waste management The closure of the UK insurance brokerage Hill House Hammond created a large Costs of waste disposal are increasing, not amount of waste. IT and electrical waste 2500 20000 only through government tax and was recycled and this together with the regulation, but also through increased desktop renewal programme led to 73 0 0 travel and handling costs incurred due to tonnes of IT waste being disposed of in 2000 2001 2002 2003 2004 the closure of landfill sites in the UK and Total waste in tonnes Total recycled waste Staff no. 2004 in the UK, 70.3 tonnes of which was in tonnes increasingly across Europe. recycled. It therefore becomes imperative to reduce The objective for 2005-2006 in Romania is Total business kms waste to landfill and to increase recycling as education of staff in better waste 150

much as we can. With different segregation. Aviva Australia is looking to 120120 technologies and sorting mechanisms introduce a “binless office” system similar becoming available at affordable prices, we to the one, which has been successfully 100 are always looking to broaden the scope of rolled out in the UK over the last 18

recycling and subsequently the diversion months. It will also introduce a wormery in 8080 from landfill. the head office to deal with the volume of

organic waste. Hibernian is looking to Kms and staff Total waste has reduced by some 5% from 50 2003 and the total volume recycled has expand its recycling of print and toner increased over the same period, by 3%. cartridges and mobile phones to retail 4400 branches. Our businesses around the group 0 continually seek to increase the recycling of 2000 2001 2002 2003 2004 Car kms Air kms Rail kms Staff no. various waste streams, from paper, to (million) (million) (million) (x 1000) 0 plastic cups and aluminium cans, Travel and transport depending on the recycling capabilities in each country. Aviva in the Czech Republic Group-wide, travel has increased by 12% in in late 2004, Aviva Australia agreed to a now recycles five waste streams. terms of kilometres travelled. Rail has travel plan with TravelSmart, a government reduced slightly (3.5 million kilometres), while department that encourages energy There is strong linkage between the air and car travel have increased producing efficient travel. The plan encourages staff minimisation of paper consumption, the an increase in related CO2 emissions of 27%. to use alternative transport modes other rationalisation of printers and copiers and We will be closely monitoring the causes of than taxis and personal cars. the reduction in overall paper waste. this shift over the coming year, to explore Eurovida in Portugal has introduced a Reading documents on screen greatly options for reduction. reduces paper waste. Telework programme, which enables sales Despite this unwelcome trend, initiatives force employees to work closer to the Delta Lloyd and Aviva Canada put new have continued over the year to reduce customer, and if necessary, from home waste management contracts in place in travel. For instance, telephone conferencing which helps to reduce unnecessary 2004; the Delta Lloyd contract included a in the UK has increased by a further 33%, commuting to the office. In Hungary, Aviva greater focus on data collection. which is testimony to travel avoided. Other encourages car sharing for agency visits In Turkey, our life and pensions business parts of the group also employ means to and meetings held away from the office. selected a supplier, which disposes of old reduce travel where possible. For example, computer equipment responsibly. Since the new agreement in 2004, some 80 computers and accessories have been recycled.

32

Aviva plc Corporate social responsibility report 2005 Assurance Independent review statement

Aviva is committed to annual external To the management of Aviva plc assurance. This year's external review of We have been asked to review Aviva’s “Corporate Social Responsibility (CSR) Report 2005 – our CSR report is provided by Ernst & a summary” (the Report) in accordance with the scope of work described below. Aviva Young. The assurance process covers the management has prepared the Report and are responsible for the collection and entire CSR summary report. presentation of information within it. Our responsibility in performing our work is to Aviva management in accordance with the terms agreed, we do not therefore accept or assume any responsibility for any other purpose or to any other person or organisation.

Our scope of work

We have undertaken a series of activities to review the progress made in CSR during 2004 in order to provide a basis on which to challenge the Report’s content. We have completed the following activities:

• Interviewed key management and functional staff identified as having group responsibilities for the CSR programme.

• Interviewed nominated CSR managers from six Aviva businesses to understand the processes for managing and reporting progress on CSR within those businesses.

• Reviewed a selection of group CSR documentation such as: board reports on CSR, minutes of the CSR review group and CSR steering group meetings, and guidance documents on CSR reporting.

• Reviewed the CSR progress reports received from each of the Aviva businesses covering CSR activities in 2004.

• Tested that data in the Report has been correctly transposed from internal reporting processes.

Our conclusions

Based on the scope of work described above, we conclude that:

• The examples used in the Report to illustrate CSR progress within the Aviva businesses have been drawn from the CSR progress reports submitted by each business and related correspondence.

• The data in the Report has been correctly transposed from internal reporting processes.

• There are no statements or claims within the Report that were inconsistent with evidence obtained during the course of our work.

Ernst & Young LLP London, 31st March 2005

33 If you have any comments or queries about this corporate social responsibility report, please contact:

Anthony Sampson Director of CSR Aviva plc, St Helen’s, 1 Undershaft, London EC3P 3DQ United Kingdom

Telephone +44(0)20 7662 2245 Fax +44(0)20 7662 7263 [email protected] www.aviva.com/csr

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