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Episode 4: Boldly stepping forward on the path to net zero (part 2 of 2)

“I’m of the belief that people will be inspired by a lofty ambition but only if they can see the steps to getting there. If you just put out lofty ambition without a roadmap … it becomes very difficult to start making progress.”

Jason Storah, CEO, Aviva Canada

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How can Canadian leaders address the growing imperative around ESG matters like climate change?

In this second installment of a two-part podcast episode with Aviva Canada Chief Executive Officer Jason Storah, we continue the conversation about the path to net-zero greenhouse gas emissions and other key environmental, social and governance (ESG) topics. Jason and host Elliott Cappell discuss some of the challenges facing Canadian leaders as they determine their own approaches to ESG matters like climate change and how organizations can overcome the difficult step of getting started on a net-zero commitment. As part of a global insurance company aiming to achieve net-zero emissions by 2040, Jason also shares his advice to other leaders navigating the complexities of the ESG journey.

Be sure to stream, share and subscribe to our podcast series today. If you enjoyed today’s episode, let us know by leaving a review on Apple Podcasts.

Elliott: Welcome back to PwC Canada CEO Viewpoints podcast series, where we discuss key themes from our 25th Annual Global CEO survey. Today, we'll dive right into part two of our episode with Jason Storah, CEO of Aviva, Canada. Part one with our conversation with Jason, we explore what drives business leaders to finding solutions when approaching ESG. Today, we're picking back up with Jason to hear his perspectives on getting started with ESG strategies, building roadmaps, and we'll learn how Aviva is leading its unique approach to achieving net zero. Jason, in episode one, you refer to an interesting statistic. We're seeing that only a third of Canadian organizations have explicitly factored climate change into their business strategies. And yet 51 percent of CEOs surveyed said that climate change would impact their ability to do business. So what do you think is holding Canadian CEOs back?

Jason: Look, I believe that those stats are true. So those stats are a call to action, without a doubt. I'm conscious it can be difficult for companies, no matter what size you are. But I think it can be difficult for companies to develop a perfect plan. But there's no such thing as a perfect plan. The best plan in this space is to get going with something and then have that plan evolve and iterate from there. You know, the other thing I'm quite conscious of is there is an increasing amount of external scrutiny on this. There are a number of industries where the carbon footprint is something that is factored in and is communicated to consumers, but is not in many industries today. But it's coming. You can see the trend. So I think get ahead of that and start to educate yourself and understand it and build in what's the risk of me as a business, me as a CEO, me as a senior leader, or me as an employee not getting ahead of this, not understanding it. What's the future risk for my business, my livelihood of not understanding that? And then I think it becomes very real. You know, I think the other thing is, you know, you see this all the time in this space and that the rules of the game around ESG are changing and the definitions and the standards are changing. And so there's a great lot of I think there's an awful lot of energy being focused on what are the right standards, what's the right definitions that we've got to use? Who cares? Pick a definition. Publicize it. Share it. Be transparent about it. And then if it changes in the future, that's okay too, because this is an evolution. And I think it's just really about, you know, getting on doing something and being transparent about learning as you go. And I think, you know, the other thing that I'm quite conscious of and we see this from Canada, I think we see this south of the border, right in the impact that the political tension has in this space. And I think Canada isn't where the US is in terms of this having become such a politicized component of the national debate. It's not to say that it isn't polarizing in terms of people's views, but it hasn't taken that front and center role where it's, well, if you do something, I'm just going to undo it at some point in the future. So I think we're in a space at the moment where we can still make some change and we can still build momentum. And, you know, I look at this entire space around climate change and risk managing your business if you're the CEO. How can I build future momentum? Because I can't go from a standing still to a sprint. I have to start walking and then I can start jogging and then I can start running and sprinting. And I think that's the opportunity that business leaders have today. And just look around you. There are businesses and industries that are doing this well and their business and industries that are doing it badly. And we all know who they are. There's no secrets in this space.

Elliott: Well, someday, not on PwC's time, we can go for a beer and talk about the politicization of climate change within Canada.

Jason: There you go.

Elliott: Slightly different perspective. He touched on something there about ESG. I would say ESG is like the galaxy. It's expanding in all directions, at incredible speed at all times. You've gotten on that journey, that warning as you go. You've had a walk, run, sprint sort of mentality. And we just talked about how quite a number of Canadian CEOs are really just getting started or haven't yet started. So when you reflect on your journey there, learning as you go, what can you reflect in terms of the risks that you've managed or the opportunities that you've captured? How can we inspire Canadian CEOs to take more action based on your experience?

Jason: Yeah, I mean, look, the risks are the unknown, right? The unknown costs associated with doing something about it. You know, if I think about, it just to bring that to life in the insurance space. The risks are what's going to cost us more to settle claims in a sustainable way. The risks are, is our investment portfolio going to generate the kind of returns that we need it to that competitors are going to generate? We don't know. So I think you can always look at those risks, particularly where there is historical track record, to say how it will play out. You're not you're not copying a playbook. But I think you've got to lean into those into those risks and iterate as you go along rather than try and start with a perfect solution or a plan that has a, you know, anything more than a north star. You know, I think this is such an emerging space that, you know, I think about over the last few months, you know, we've been looking at future non-executive directors for boards and ESG now is obviously something in terms of a requirement. When you look at skills matrices of boards, ESG is there. Well, ESG wasn't even it wasn't on the skills matrix, not that many years ago. So to think about where you can find that capability and that expert experience is quite challenging. But it's not a reason not to do it. It's not a reason to pick somebody with more traditional experience set and skill based over something that, you know, is beginning is going to become more prevalent going forward. And I think anybody looking for inspiration, there are people out there that have different views about science and climate change and what's causing it and whatever. But I mean, I'm pretty much surrounded by people who are not people who will think like me. But we have some things in common around what we believe, you know, we want to do from a company perspective, what we want to do for our customers, what we want to do for the people that work in the company that I work for. And so I think it's not that difficult to galvanize around a common problem. But you've got to be honest and transparent with everybody about what that problem is. In my case and Aviva's case, we see the very tangible impacts of a common problem of the cost of climate change on individuals when they lose their homes, when they lose their belongings, and the emotional impact as well as financial impact that has on people. It's quite easy for people in Aviva and people in the property casualty insurance industry to galvanize around that, I believe. And then you've just got to get on and break it down into a manageable plan. And I think, you know, personally, you know, I'm of the belief that people will be inspired by a lofty ambition, but only if they can see the steps to getting there. If you just put out lofty ambition without a roadmap and you don't build that roadmap for people, it becomes very difficult to start making progress.

Elliott: And just reflecting on something you said about values there there's a stop me if you've heard of this person before named Katharine Hayhoe. She's a Canadian climate scientist who lives in Texas, and she's one of the best communicators on climate change in the world. And she always talks about linking it back to people's values. And I love what you said there.

Jason: I mean, it's funny, like my grandmother always used to say, leave somewhere better than when you found it. And I think you can apply that approach to dealing with climate change perfectly. Because, you know, if I think about the amount of waste that we create, the how much more sustainable our processes and our workflows and what we send customers. And, you know, insurance companies are notorious for sending customers 40, 50, 60 pages of fine print on their insurance policy. Aside from not being particularly customer friendly, being a terrible experience, it's not very environmentally friendly either. So, you know, I think you can always look at, you know, different parts of what you do as a business and say, well, we can do this better. And now I think the lens is not just we can do this better for customers, but now we can do this better for the environment.

Elliott: And let me ask you, I'm sure when you use that 40 to 50 page example, there's someone around the leadership table who says, oh, we really need that from a legal perspective. And someone else says, we really need that to be on paper. You know, with every one of these things, you can think of reasons not to do them. So could you share any reflections on what it's like to lead, to build that unified senior leadership, to break down silos on ESG?

Jason: You know, I think this is a space where everybody's got their own views. I think the key thing is, you know, any organization and I'll give the example of Aviva. Senior leadership of Aviva over the last few years, we have all had to educate ourselves in this space. And then we've all got to layer over the ESG lens on what we've historically been focused on, and change the way we're doing things. I mean, I'll use a non climate example earlier, you know, the George Floyd murder. And the reaction that had. And the impact that had on us as a leadership team and the dialog we needed to have in this organization was really, really uncomfortable. But there was no way of having that dialog and it not being uncomfortable. You couldn't get into understanding what that meant for people in a company like Aviva without having some uncomfortable conversations about people's experiences. And they would be experiences that I can't relate to because then they weren't my experiences, their backgrounds were not my backgrounds, and I think I'm using that as an example because you can't you can't get into this without having uncomfortable conversations and making some decisions and some trade offs. And if you don't see change as a result of that dialog and as a result of those uncomfortable conversations, then you might as well have not bothered. And I think, you know, in any part of the ESG space, there should be areas where there's a natural fit with or you need to try and find areas where there's a natural fit with what your purpose is as a business, what you do for your customers. But you also need to be alive to the fact that there's going to be areas that cause friction, and it's how you deal with that friction that will make a real difference. You know, we could choose to ignore building back better when somebody has a claim. Probably cheaper in the short run. We could choose to ignore being more mindful about re-use rather than just always using new materials. Probably cheaper, easier. Who knows? Maybe it's easier to get the customers there. But the right thing to do is to have some grittier conversations, some more difficult conversations and decisions, and maybe to deal with some of the short to medium term consequences, whether that's cost, whether that's resource requirements to get to a better spot. And I think that's really important in the ESG space because you just can't move the dial unless there's some awkwardness and unless there's some friction that you deal with.

Elliott: Do you feel a certain like personal responsibility to your people when it comes to ESG?

Jason: Yeah, because you've got to lead by example. You know, anything that's worthwhile usually requires effort. And I think ESG is very worthwhile. And it quite it requires a lot of effort. And I think, you know, you've got to be prepared to lean in. And if you don't lead by example, you can't expect other people to follow and you can't expect other people to get out of their comfort zone. And, you know, I mean, I use the Black Lives Matter example a second ago with regards to George Floyd and the reaction there. How could we possibly think that we could be a better organization and more empathetic of population of employees in Aviva and in the insurance industry? You know, in the black community, if we weren't prepared to have some awkward conversations and some difficult conversations, and we weren't prepared to do it in a way that was hopefully supportive for people. And I think in the climate space, you know, whether that's becoming net zero is an operation, that's quite difficult. You know, where are we getting our energy from? What kind of fleet of vehicles are we using? How many people that work for Aviva are, you know, have a carbon footprint? That's a bit this is a bit different. It's a bit greater. And how do we change that? You know, and it's just it's always easier to refer to, although we've always been doing it this way. It's quite comfortable. I don't need to change it because it's not broken. It's kind of working. It's quite difficult and it requires an additional amount of effort, you know, I think to break those norms. And we see that with ESG more than any way.

Elliott: Totally. And when you know, to tell people that it is broken and that change is required can be quite personal. And I really I really appreciate you sharing your personal reflections. I could ask you a number of other questions. I just want to maybe go off script for one more before we close out. I mean, the passion with which you just spoke about was called the S within ESG, the social element of Aviva's goal. Is there another part of the portfolio that you feel that strongly about?

Jason: I think they've all got their places at different times. You know, the S of ESG, I mean, I'm the diversity, equality and inclusion agenda for me is it just feels like it's 2022. We sort of need to get this right. Right. You know, enough already. Come on. Whether that's, you know, gender bias that exists in the workplace, other bias that exists in the work back in the workplace, the way we set people up for success, the way we support people. That just feels so obvious and proximate and easy to fix. That, you know, walking past it would be a crime. Now, you know, there's other parts of the ESG agenda which I feel equally as strongly about. But I think perhaps that's a reflection also of where Aviva is and the things we've done over the last few years and where we where we've really been able to make some progress. But the nice thing about ESG in any part of this spectrum of ESG is as you make progress, it's like, okay, now I can see how to get to the next level and then I can see how do we get to the next level. But if you don't make that progress, you can't get to the next level. You've got no chance. Right. And I think that's one of the nice things about taking ESG seriously, whatever components of ESG it is and really, really focusing on it.

Elliott: I'll just get you out of here on this. Do you have any one last message or piece of advice for our listeners when it comes to ESG?

Jason: I think ESG is a really big topic. And I think because it's such a big topic, it can be overwhelming. Because it can be overwhelming, it can be easy to ignore. You know, my advice to people is to break it down. Acknowledge that you don't know everything about. To acknowledge the people around you don't know everything there is to know about it. But that doesn't mean that you shouldn't start to educate yourself. It doesn't mean that you can't start to do something no matter how small. And I think one of the things I've found and we've seen in Aviva is focus makes a real difference. You cannot do everything at once, particularly in a new space. So picking what's relevant for you, what's relevant for your organization and going at it with real vigor and focus makes a difference. And then I think the other part that comes from that is being transparent about what you want to achieve. So putting targets out there and sharing them with people is really, really critical that you are transparent about that. And then the final thing in any organization is linking those targets to incentivisation and remuneration so that there is there's something behind at the end of the day or at the end of the year having achieved those targets or not. And then, you know, I think more broadly, ESG is in a very, very expensive part of the long term future. Because of that, it's very easy to forget about it in the short term, and it can be quite cheap to forget about it in the short term. But if you do forget about it in the short term, it's only going to become a liability. And I don't think there's any industry that's any sector that is immune from this. There was no sector that was immune from COVID. Now, some parts of the economy and some industries did better and some did worse, but everybody was affected by it in some way or other. And as I said earlier, I think everybody is going to be affected by climate change to varying degrees you want. Nobody's immune from it. And the best thing we can do is get ahead of it and try and turn it from, you know, what could be a massive looming liability that future generations will have to deal with to something that we can get ahead of and, you know, and adapt accordingly.

Elliott: Jason, thank you once again for your time sharing your perspectives, and it's been great to hear about Aviva's journey. I'd also like to thank our listeners for joining us for part two today. If you don't already, please be sure to subscribe to hear our newest episodes as soon as they launch. Up next on CEO Viewpoints will be coming to you in French as we shift the discussion to one of our other key topics at the forefront of Canadian CEO's minds, cybersecurity. I'm Elliott Cappell, and thank you for listening.

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Jason Storah

Meet our guest

Jason Storah became CEO of Aviva Canada in July 2019, having previously served as Chief Distribution Officer. Since joining Aviva Canada in 2004, he has served in senior roles including Chief Risk Officer and Senior Vice-president, Strategic Development. Besides his CEO role, he sits on Aviva’s group executive committee.

Elliott Cappell

Meet the host

Elliott Cappell is a Partner and National Climate Change Leader at PwC Canada. As part of his work, he has advised large companies, global investors and banks on decarbonization as well as climate risk and strategy. He has worked with all levels of government in Canada on climate risk, including through his work as Chief Resilience Officer for the City of Toronto.

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Elliott Cappell

Elliott Cappell

Partner, National Climate Change Leader, PwC Canada

Tel: +1 416 687 8175

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