This case study describes how Aviva has made tackling deforestation a core component of its climate and biodiversity strategy, recognising deforestation as a material financial risk and a key driver of biodiversity loss and climate change. As a global insurer and asset manager, Aviva demonstrates how financial institutions can assess, manage, and influence deforestation risks across investment, underwriting, and stewardship activities. The case matters for sustainable finance because it shows how nature-related risks can be integrated into mainstream financial decision-making using available data, engagement tools, and collaborative initiatives, even where measurement challenges remain.

Activities relevant to investors / finance audience

• Integration of deforestation risk into investment and underwriting analysis
• Development of internal tools to monitor deforestation exposure across portfolios
• Use of stewardship, engagement, and voting to influence corporate behaviour
• Participation in collaborative investor initiatives on deforestation

Together, these activities illustrate how investors and insurers can operationalise biodiversity commitments through risk assessment, active ownership, and portfolio oversight.

Scope

The case study focuses on Aviva’s activities across its insurance and investment operations. It covers listed corporate holdings, sovereign debt, real assets, annuities, and general insurance portfolios, with a geographic focus on global commodity-linked deforestation risks, including exposure to high-risk regions such as Brazil, Indonesia, and Malaysia. The primary sustainability themes are deforestation, biodiversity loss, and their links to climate risk, particularly in relation to agricultural commodities and land use.

Who is the case study for?

• Investors and asset managers integrating nature-related risks into portfolios
• Insurance and risk professionals assessing environmental exposure
• Sustainability and environmental, social and governance analysts
• Policymakers and regulators interested in private-sector approaches to deforestation

Tools, data and methods used

Aviva applied a multi-source data approach to assess deforestation risk. For corporate holdings, it combined data from CDP Forests, Forest 500, and SPOTT to evaluate companies’ exposure and policy strength, classifying them as strong, medium, or weak. Recognising coverage gaps, Aviva supplemented these sources with Trase supply chain data to better understand indirect commodity exposure. For sovereign debt, real assets, and annuities, Global Forest Watch satellite imagery was used to assess proximity to deforestation activity. These datasets were consolidated into an internal monitoring tool to track exposure, prioritise engagement, and support ongoing risk management. The approach emphasised decision relevance rather than precise valuation, acknowledging current data limitations.

Findings

The case study finds that deforestation risk can be meaningfully assessed and managed within financial portfolios by combining multiple data sources and embedding results into engagement and stewardship processes. Aviva’s analysis showed that direct exposure to deforestation was limited in some asset classes, such as sovereign debt and insurance, but indirect exposure through financial institutions and supply chains was more significant. Active engagement emerged as a key lever, with Aviva engaging hundreds of companies on biodiversity issues and strengthening its voting policy by voting against management at firms with weak deforestation practices. The case highlights that while data gaps remain, practical tools already exist to inform decision-making and prioritise action. For sustainable finance professionals, the key lesson is that iterative, transparent approaches—supported by collaboration, engagement, and evolving data—can advance credible management of nature-related financial risks.