Active Ownership

Active
Ownership

Natural Capital Engagement
Programme: Advancing Our
Commitment

Dynamic and accountable active ownership is a core element of our investment philosophy. Through purposeful engagement with investee companies, we aim to protect and grow long‑term value for clients while supporting the shift to a nature-positive economy.

As a central pillar of the NCGE Strategy, the Natural Capital Engagement Programme (NCEP) strengthens this commitment by encouraging companies to identify and disclose its biodiversity impact and dependencies, set ambitious SMART nature targets covering the most material impacts and dependencies and demonstrate actions that avoid and reduce negative impact and enhance biodiversity where possible, and contribute to ecosystem restoration.

NCEP Evolution

2023

2024

2025
Programme Evolution

2027

2026

2022
Programme Launch

NCEP: Phase 1

NCEP: Phase 2

During Phase 1 of the NCEP, 130 engagements were conducted with companies held in the NCGE Strategy, 128 of which involved substantive, tailored dialogue. These efforts yielded nine outcomes, including increased assessment and disclosure of biodiversity impacts and dependencies and setting of nature-related targets.

In 2025, we evolved the NCEP asks to better align with the changing nature landscape and the urgency of meeting the Kunming-Montreal Biodiversity Framework’s goal to halt and reverse biodiversity loss by 2030. A key enhancement was evolving our third ask beyond company-specific mitigation to assess how companies both minimise their negative impacts and actively contribute to nature through biodiversity enhancement, ecosystem restoration and and delivering measurable nature positive outcomes.

Reflecting on key takeaways of the programme, we recognise that some companies and sectors face challenges in meeting our asks, driven by evolving standards such as SBTN¹ and TNFD², data gaps and complexity many sectors face in integrating biodiversity into existing risk and reporting processes. Where material barriers exist, we will consider credible alternatives based on our internal assessments, ensuring a pragmatic yet ambitious approach to halting and reversing biodiversity loss. We broadened our approach to include reactive alongside proactive engagements and are exploring thematic engagements.

^{1. Science-based Targets for Nature}
^{2 Taskforce on Nature-related Financial Disclosures (TNFD)}

Engagement Levers

Proactive Engagement

Thematic Engagement

Reactive Engagement

Ongoing dialogues with selected companies to drive progress on robust nature assessments and disclosures, science-based targets and measurable progress towards nature-positive actions.

Focused initiatives addressing cross-sectoral nature challenges, such as supply chain nature risks or mitigation strategies.

Targeted interventions triggered by material events, regulatory changes, or new disclosures.

Our asks to accelerate nature action

Disclosure

Companies to identify and disclose the most material impacts and dependencies on nature across their value chains aligned to recognised frameworks such as the TNFD.

SMART Targets

Set ambitious, SMART³ targets covering their most material biodiversity impacts and dependencies aligned to best practices such as SBTN.⁴

Nature Positive

Demonstrate actions that aim to avoid and reduce negative impacts on nature, and where possible enhance biodiversity, nature and ecosystem restoration.

³SMART Targets are those which are specific, measurable, achievable, relevant and time-bound.

^4. We recognise that limited companies currently have validated Science-Based Targets for Nature. We will consider credible alternatives based on our internal assessments, ensuring a pragmatic yet ambitious approach to driving a nature positive economy.

Monitoring Progress

We assess company alignment with our nature expectations through an annual qualitative review, evaluating how closely each company aligns with our engagement asks, categorising companies from ‘Not Aligned to ‘Aligned’. These ratings are relative within our portfolio and are not benchmarked against external indices such as the MSCI ACWI.

This distinction is important as all portfolio holdings have already met a high threshold through our Transition Risk and Solution Frameworks and deep-dive analysis. The alignment ratings therefore help us differentiate between companies that are already performing well, highlighting relative leaders and laggards.

This structured approach enables us to track progress, refine our engagement strategies, and support continuous improvement across the portfolio.

Escalation and Impact

In 2025, our escalation approach continued to evolve. We maintained active engagement with stakeholders across Aviva Investors Sustainable Fund range, prioritising consistency and shared accountability in our nature actions. Engagement progress is monitored, with careful consideration of the individual circumstances and limitations faced by companies and sub-industries. Where engagement efforts do not result in meaningful progress, we remain prepared to reduce exposure or divest, underscoring our ongoing commitment to preserve and restore nature and responsible stewardship.

Programme Progress

In 2025, we engaged with every company participating in the NCEP as part of the programme update. This approach allowed us to maintain ongoing dialogue with firms across the NCGE, helping us to sustain momentum and foster constructive discussions around nature action.

NCEP		Aviva Investor Engagements
51	Number of Engagements	1320
12%	Percent of Substantive Engagements⁵	80%
7	Number of Engagement Outcomes⁶	323

⁵ Substantive engagement is defined as engagement typically involving active, in depth, bespoke dialogue with the corporate.
⁶ Changes in the behaviour of an entity that are in line with one of our prior engagement asks.

2025 NCEP Highlights

5

holdings delivered an enhanced nature assessment

2

holdings set additional SMART targets on nature related issues

Shining a light on companies demonstrating nature action:

Abbott Laboratories improved its disclosure on site level water stress assessments using the World Resources Institute Aqueduct tool by providing more granular basin level data, clearer classification of high-water impact sites, and more detailed quantitative performance metrics – including sales adjusted water use trends and site-specific water reduction outcomes. As the life science manufacturing sector can be water intensive, particularly impacting freshwater habitats and areas with high water stress, the company has made meaningful progress against our asks by assessing its exposure to water stressed areas. However, the disclosure still does not extend to other components of nature, nor does it provide a full value chain assessment aligned with emerging best practice.

In 2025, Brambles introduced new 2030 nature-focused sustainability targets, including commitments on certification, no conversion, ecosystem restoration and freshwater stewardship. It also integrated nature-related risks and opportunities into its enterprise risk management, drawing on its TNFD LEAP assessment. In addition, it adopted hectare-based metrics and expanded its disclosures, strengthening alignment with leading frameworks. Brambles is held within the NCGE as it reduces resource pressure through circular design while aiming to enhance biodiversity and restoration of forest ecosystems.

As we evolved the Natural Capital Engagement Programme’s third ask from a company specific request to a new focussed action on delivering nature positive actions towards nature, we have not yet identified any companies which have delivered against this ask.

Company alignment

As the programme progressed throughout 2025, we undertook a re-baselining of company alignment scores. From this point forward, the alignment levels established in 2025 will serve as our benchmark for tracking and assessing future progress.

Most portfolio companies fall into the Aligning category, driven by the 48% that have already begun assessing their nature‑related impacts and dependencies and have set initial nature‑related targets. Following this, the largest share of remaining companies sit in the Not Aligned category, reflecting limited progress in demonstrating concrete actions toward nature‑positive outcomes (35%). Importantly, all portfolio companies have met a higher baseline threshold for integrating nature considerations into their business, meaning the data provides clear visibility on where further improvements and targeted support can accelerate their transition.

< Hover over the chart to see companies that are demonstrating alignment to our asks.

CASE STUDIES

Engagement Spotlights

Ongoing engagement allows us to drive progress on robust nature assessments and disclosures, science-based targets and measurable progress towards nature-positive actions.

Click to jump to any case study or read on to discover more.

Commercial Services: Brambles

Semiconductors: ASML

Personal Care: L'Oréal

Brambles

Following our annual qualitative assessment of Brambles approach to nature, we reached out to the company on strengthening its governance, disclosure and target-setting on nature-related issues as part of our Natural Capital Engagement Programme.

CASE STUDY

Engagement Focus
We spoke with Brambles to further encourage the company to:

Improve robust disclosure of nature‑related impacts and dependencies across the value chain
Establish externally validated, SMART biodiversity targets, aligned with SBTN or equivalent frameworks
Demonstrate clear progress toward a nature‑positive pathway, including adoption of science‑based methodologies.
Enhance value‑chain visibility and alignment with emerging global frameworks for nature (e.g., TNFD, SBTN).
Embed nature‑related considerations into long‑term strategy and governance structures.

Key Insights
Brambles introduced new 2030 sustainability targets that place nature at the core of its strategy, including commitments on certification, no conversion, ecosystem restoration, and freshwater stewardship. The company integrated nature‑related risks and opportunities into its enterprise risk management framework and drew on its TNFD Location Evaluate Assess Prepare (LEAP)⁷assessment to improve its approach. Brambles also adopted more holistic, hectare‑based metrics and expanded its disclosure efforts, demonstrating stronger alignment with leading frameworks. Future engagement will focus on securing external validation of targets and fuller alignment with SBTN as methodologies mature.

⁷The TNFD LEAP assessment is a four-step internal process developed by the TNFD to help organisations identify, evaluate and manager their risks and opportunities related to nature.

ASML Holdings

We engaged with ASML’s team and senior executives to understand their plans to become PFAS‑free⁸ by 2027 and to clarify how their supply‑chain management approach will support delivery of this ambition.

CASE STUDY

Engagement Focus
Our meeting with the company centred on assessing ASML’s readiness to manage PFAS-related regulatory and operational risks and the steps the company is taking to align with emerging best practice. Our discussion focussed specifically on:

How ASML is addressing PFAS regulation, its pathway to becoming PFAS‑free by 2027, and steps to ensure compliance with evolving standards.
Why air pollution is no longer considered material in its CSRD double‑materiality assessment, and how PFAS and water‑related impacts are being incorporated.
How its supply‑chain management approach supports sustainability, including supplier collaboration, use of sustainability criteria, and plans to reduce supply‑chain emissions.

Key Insights
ASML is addressing PFAS related regulatory challenges by focusing on alternative sourcing and new component designs, aiming to be PFAS free by 2027 through elimination, supplier collaboration and active engagement with regulators. A dedicated team is working across more than 100,000 components, though viable alternatives have not yet been identified. PFAS, known as forever chemicals, persist indefinitely, accumulate in ecosystems, travel widely through water, and cause ecological and human health harms. ASML also confirmed that air pollution is no longer considered material in its EU CSRD⁹ double materiality assessment, based on updated data, while PFAS and emerging water related issues are rising in significance. Its supply chain management philosophy centres on strategic sourcing, mutual dependency and embedded sustainability criteria, with a goal for GHG neutral supplier parts by 2030. The company has also submitted its NetZero targets to the Science Based Targets initiative.

^8.PFAS free means where a product does not contain any addition of per-and polyfluoroalkyl substances (PFAS)

^9.EU Corporate Sustainability Reporting Directive (CSRD) is where companies must assess and report sustainability issues using a double materiality lens. This identifies which sustainability issues both significantly impact people and the environment and materially affect a company’s financial performance – and companies must report on issues in either category

L'Oréal

In 2025, we engaged L’Oréal several times to assess its approach to nature‑related risks, encourage stronger biodiversity disclosures, and support progress on value‑chain sustainability. The company is held for its efforts to address nature-related risks within its global supply chain by reducing its water use and shifting to 100% recycled or bio-based plastics, supporting circularity and lowering pressure on land and systems.

CASE STUDY

Engagement Focus

During 2025, we held three engagements with L’Oréal across complementary nature‑related themes, progressing from product‑level considerations to broader biodiversity and nature‑related risk management.

An initial group meeting in Q2 2025 focused on product lifecycle and recyclability, alongside discussion of market conditions and brand performance. Two subsequent engagements in Q4 2025 addressed biodiversity and nature‑related disclosures, including requests for greater site‑specific risk transparency, external validation of targets (e.g. SBTN), clearer pathways toward nature‑positive outcomes, and improved linkage between biodiversity outcomes and capital allocation. A follow‑up discussion explored how biodiversity, water, and nature‑related financial risks are embedded across the value chain, with L’Oréal referencing alignment with TNFD and SBTN, relevant governance arrangements, and context‑specific ecosystem metrics.

Key Insights
L’Oréal has strengthened its approach to managing biodiversity and water impacts, conducting value chain assessments that integrate risk, dependency and financial analysis aligned with TNFD and SBTN.

The company tracks progress through ecosystem and water focused KPIs, prioritising measurable, locally verified improvements rather than making a formal “nature positive” claim. Governance is embedded through dedicated committees reporting to the board, and progress is monitored using context specific, conservation hierarchy metrics with transparent disclosure.

While this represents clear momentum, further enhancements in site level detail, external validation of targets, and a clearer long term nature roadmap would strengthen confidence in L’Oréal’s trajectory.

Looking Ahead

Reflecting on the evolution of our nature stewardship approach, we are encouraged by the progress made through our strengthened engagement programme. By adapting to a rapidly advancing nature related landscape – with new standards, guidance and assessment frameworks emerging – we have sharpened our focus beyond reducing negative impacts to assessing how companies contribute positively to ecosystem restoration and biodiversity enhancement. This enhanced approach has deepened the quality of our engagements, supported more meaningful disclosures and target setting, and positioned us to better drive outcomes aligned with the Global Biodiversity Framework’s 2030 goal.

Looking ahead, we are excited to build on this momentum in 2026. By further leveraging internal expertise and maintaining a pragmatic yet ambitious approach to disclosure, target-setting and nature positive actions, we are confident that our active ownership will continue to drive measurable impact. With renewed energy and a clear vision, we remain committed to guiding our holdings through the complexities of the nature positive transition, helping to ensure resilient investments and meaningful change for the years to come.

Figure 1. Boats currently used by Baka indigenous communities which limit access to basic services, markets, economic opportunities and participating in conservation initiatives.

Indigenous peoples don’t just defend the forest; they read it, govern it, and envision themselves in it. Training the youth is planting twice: we secure stewardship today and ensure it still stands tomorrow they’re the ones who will inherit clean air, water, and stability.

Arrah Emanuel – Regional Manager, Sustainable Finance

Zoological Society of London

We committed to donate five basis points of the Natural Capital Global Equity Fund portfolio’s assets under management to fund the Zoological Society of London's nature projects.

Our 2025 donation supported the purchase of a community boat for Baka communities living around Minkébé National Park, enabling children to reach school more safely while also improving the community’s ability to participate in conservation education activities linked to the park.

Minkébé, in northeastern Gabon, is one of Central Africa’s most ecologically important protected areas, yet neighbouring Baka communities face significant mobility challenges due to limited transportation infrastructure. For children in the villages of Etoro and Adjap, this means walking approximately 10 kilometres each way to reach school, hindering regular attendance and access to education.

Aviva Investors Contribution: Connecting people and nature in Minkébé National Park, Gabon

We committed to donate five basis points of the Natural Capital Global Equity Fund portfolio’s assets under management to fund the Zoological Society of London's nature projects.

The project will be done in collaboration with a local NGO and the protected area management team. By funding a reliable community boat alongside the construction of two additional boats made locally, Aviva Investors is helping around 80 children access schooling and supporting greater local engagement in the protection and stewardship of this critical landscape.

Figures 2-5. Camera trap images of fauna species within the Minkébé National Park. The community-based nature project supported by Aviva Investors is implemented in communities living around the park. Top right: African forest elephant (Loxodonta cyclotis), middle right: African leopard (Panthera pardus pardus). bottom right: Western lowland gorilla (gorilla gorilla gorilla), and centre bottom: Giant forest hog (Hylochoerus meinertzhageni).