The report ‘Actuarial involvement in climate and sustainability work’ is designed to help actuaries, and those who rely upon actuarial advice, to understand more about the current activity taking place in this area of work, and the support available for on-going learning and development.
The report identifies that actuaries are increasingly providing advice to firms and clients across a range of domains including insurance, pensions and investments, and wider fields such as banking. Specific climate-related areas where actuaries contribute include stress and scenario testing, strategic asset allocation, sustainability frameworks, and physical and transition risk modelling.
Participants in the review reported some challenges communicating climate-related risks and opportunities. They commented that climate and sustainability work is often driven by regulatory imperatives, and that budget constraints at firms and with clients can impact the scope of work.
The report’s conclusions highlight the continuing need to support thought leadership and policy development, drawing on the significant contribution of the IFoA Sustainability Board and related working parties. With actuaries collaborating extensively across organisations, the report also underscores the importance of taking a multi-disciplinary approach.
Given the constant evolution of scientific research and a changing geopolitical background threatening the consensus on climate change, the report reinforces the critical importance of focusing on evidence-based analysis and research, using professional judgement to apply this to potential future scenarios.
Sam Younger, Lay Chair of the IFoA Regulatory Board, said: “This report provides a valuable overview of how actuaries are managing the high-profile risk of climate change and sustainability. Importantly, it recognises the power of collaboration on this major cross-cutting topic.
"To support actuaries working in this rapidly changing landscape, the IFoA Regulatory Board is examining how existing guidance and professional skills resources can evolve. We will continue to engage with IFoA members and volunteers to amplify the voice of the profession and encourage on-going research and thought leadership with global actuarial associations and other agencies.”
Alan Marshall, IFoA Review Actuary, said: “Climate and sustainability are defining issues of our time, and the skills of actuaries are making a difference in how we understand and manage associated risks across a range of domains. The wider context is of consistent and growing scientific evidence, challenged by a changing political landscape.
“It is important that IFoA members are supported to continue work in influencing and leading activity in this area, and this review highlights key aspects where this can be enhanced.”
This report is part of the Actuarial Monitoring Scheme (AMS). It continues the regulatory work of the IFoA in independently reviewing areas of work in which actuaries have significant involvement and influence.
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