AIA, the largest pan-Asian life and health insurer, is not just in the business of providing financial protection. The company is deeply committed to its purpose of helping people live healthier, longer, better lives, and this purpose is interwoven with a strong environmental, social, and governance (ESG) strategy.
AIA recognizes that a healthy planet and healthy communities are the foundation of sustainable development. I will delve into how AIA's comprehensive ESG approach is creating a positive impact across Asia.
A Holistic ESG Strategy
AIA’s ESG strategy is built on five core pillars:
- Health & Wellness: Focuses on engaging, inspiring, and delivering better health outcomes while championing financial inclusion and access to quality care.
- Sustainable Investment: Directs capital towards companies committed to sustainable practices, investing for the future, and mitigating risks associated with a low-carbon economy.
- Sustainable Operations: Aim to reduce the environmental footprint of AIA's operations and integrate ESG factors into sourcing.
- People & Culture: Empowers employees through a supportive and inclusive environment, promoting learning and equitable opportunities.
- Effective Governance: Ensures the highest standards of business practices, transparency, and accountability across the organization.
This integrated approach ensures that ESG considerations are not just an add-on, but are embedded into the core of AIA's business operations and decision-making.
Health & Wellness: A Commitment to a Billion Lives
AIA's commitment to health and wellness is reflected in its ambitious AIA One Billion initiative, aiming to engage one billion people by 2030 to live healthier, longer, better lives. By the end of 2023, AIA had already engaged 387 million people toward this goal through various initiatives. These engagement efforts include advice, partnerships, community programs, and campaigns that drive behavioural change.
Key initiatives under this pillar include:
- AIA Vitality: A science-backed health and wellness program available in 13 markets, with 3.1 million customers, that rewards customers for making healthier choices. Members of AIA Vitality have improved their "AIA Vitality Age," their health age, by an average of 0.10 years since joining the program. 26% of at-risk members have moved to a healthy BMI range and significant improvements have been noted in members’ blood pressure, cholesterol, and glucose levels.
- Telemedicine: Expanding access to care, AIA offers telemedicine in 10 markets, reaching 6.7 million eligible lives with an 85% year-on-year increase in consultations.
- Personal Case Management (PCM): Provides personalized support and guidance to 4.1 million eligible lives in 12 markets, resulting in significant improvements in diagnosis and treatment plans. There has been an 84.9% year-on-year increase in PCM cases with 18.8% diagnosis changes, 50.6% refined treatment plans and a 93.9% customer satisfaction rate.
- Regional Health Passport: Offers access to a network of top-tier hospitals and providers across Asia.
Through these initiatives, AIA is contributing to more accessible, affordable, and effective healthcare, leading to better health outcomes for individuals across the region.
Sustainable Investment: Financing a Greener Future
AIA recognizes its role as a significant asset owner and investor in Asia. The company is committed to allocating capital to companies that share its commitment to sustainability, investing for the long term, and reducing exposure to climate-related risks. AIA's approach to sustainable investment includes:
- ESG Integration: AIA structurally integrates ESG factors into its investment decisions and actively engages with investee companies to promote better ESG practices. AIA maintains 100% coverage of general account investments against an in-house ESG Rating Scorecard.
- CFA Institute ESG Certification: AIA is the first company globally to mandate the CFA Institute's Certificate in ESG Investing for its investment professionals, demonstrating a commitment to integrating sustainability into its investment practices. Over 140 investment professionals have achieved this qualification.
- Green and Sustainability Bonds: AIA has invested US$6.3 billion in green, social, and sustainability bonds, demonstrating a commitment to financing environmentally and socially responsible projects.
- Net-Zero Commitment: AIA is committed to achieving net-zero greenhouse gas (GHG) emissions by 2050. In 2023, AIA became the first pan-Asian life and health insurer to have its near-term emissions reduction targets validated by the Science Based Targets initiative (SBTi).
- Climate Transition Plan: AIA published its first Climate Transition Plan outlining its roadmap to achieving its climate goals.
- Portfolio Decarbonization: AIA has set and validated three near-term SBTi targets, including targets for the power generation and direct real estate sectors. AIA is also committed to engaging with its investee companies to encourage the adoption of SBTi targets. As of December 31, 2023, Total Financed Emissions (TFE) were 8.3 million tonnes of CO2e and the Weighted Average Carbon Intensity (WACI) of the listed equity portfolio was 206 tonnes of CO2e per US$1 million revenue.
- Impact Investing: AIA is increasing its participation in impact investing and has partnered with LeapFrog Investments, a world leader in this field.
Through its sustainable investment practices, AIA is directing capital towards a more sustainable and resilient future while also ensuring long-term financial performance.
Sustainable Operations: Reducing Environmental Footprint
AIA is committed to reducing the environmental impact of its own operations. Key initiatives under this pillar include:
- Green Buildings: All new buildings and redevelopments are to be green-certified. Currently, 17 buildings are green-certified.
- Digital Transformation: AIA is actively promoting digitalization to reduce paper usage. 94% of buy, service, and claims transactions are now submitted digitally and 91% of claims are electronic. This has resulted in a saving of 1,548 tonnes of paper. In total, 244 paper forms were removed and 96% of policyholder communication is via digital channels.
- Validated SBTs: AIA has had its near-term emissions reduction targets validated by SBTi.
- Supplier Code of Conduct: AIA incorporates ESG principles into its Supplier Code of Conduct, requiring suppliers to adhere to responsible practices. Over 63% of Tier 1 suppliers at the Group Office are in the top 15% of companies assessed by a globally recognized ESG supplier ratings provider.
Through these efforts, AIA is reducing its environmental footprint and promoting sustainable practices across its operations.
People & Culture: Empowering a Diverse Workforce
AIA recognizes that its people are essential to achieving its purpose. AIA fosters a supportive, diverse, and inclusive culture that enables employees to thrive and contribute to the company's success. Key aspects of this pillar include:
- Learning and Development: AIA launched LIFT (Learn. Integrate. Focus. Thrive.) and ESG 101 programs to equip and support employees. Employees receive an average of 26.5 training hours per year, exceeding the company’s target. Over 25,000 employees have participated in the ESG 101 program.
- Employee Engagement: AIA has been recognized with the Gallup Exceptional Workplace Award for the second consecutive year. AIA is also in the top quartile of Gallup's global finance and insurance industry benchmark for employee engagement for the seventh consecutive year with 98% participation.
- Diversity and Inclusion: AIA is committed to fostering a diverse and inclusive workplace. 41.6% of senior leadership positions are held by women. AIA has also delivered Diversity and Inclusion training to all managers.
- Well-being Programs: AIA offers workforce well-being programs and a resilience program called Me@AIA, available to employees in all markets.
Through these initiatives, AIA is building a strong, engaged, and diverse workforce that is passionate about the company's mission.
Effective Governance: Upholding the Highest Standards
AIA maintains a firm commitment to operating with the highest standards of business practices. This pillar focuses on:
- Board Independence and Diversity: All AIA Group Limited Board members are Independent Non-executive Directors (INEDs) aside from the Group Chief Executive and President. The board's membership reflects the diversity of the jurisdictions in which AIA operates.
- Risk Management: AIA has a robust enterprise risk management framework that integrates ESG-related risks.
- ESG Recognition: AIA has been recognized as an ESG industry and regional leader by Sustainalytics. AIA has also achieved an MSCI ESG rating of AA for three consecutive years and has been included in the Hang Seng Corporate Sustainability Index Series.
These robust governance practices ensure accountability, transparency, and ethical decision-making across all levels of the company.
Engaging Stakeholders for Collective Impact
AIA recognizes that collaboration and engagement with all stakeholders are essential for long-term success. AIA actively engages with customers, employees, agents, investors, communities, governments, and regulators to understand their needs and concerns. This engagement is used to refine AIA’s ESG Strategy. AIA was ranked first on ESG by Institutional Investor Research in their Asia Pacific (ex-Japan) Executive Team Rankings. Furthermore, ten of its business units/markets were recognized for ESG awards.
A Leader in Sustainable Development
AIA’s approach to ESG is deeply ingrained in its corporate strategy and culture. The company’s commitment to health and wellness, sustainable investment, sustainable operations, people and culture, and effective governance demonstrates its leadership in the region. By embedding ESG principles in all aspects of its operations, AIA is contributing to a healthier, more sustainable, and prosperous Asia while delivering long-term value to its stakeholders. The company is not just providing insurance; it is actively working towards a better future for all. AIA is leading the way in demonstrating how a purpose-driven business can be a powerful force for positive change.
