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Issue 1 - Climate Change

In this issue, we consider the role of discount rates, financial disclosure and the importance of understanding not just the likely possible outcome, but the worst case scenario when assessing the potential impact of climate change.

In particular, this first issue addresses the role of long-term institutional investors such as pension funds and life insurance companies.

As well as highlighting the role of actuaries in understanding the long-term implications of this policy challenge, we want to present a broad perspective on the issue, and have invited contributions to this bulletin from a range of important voices in the debate. In this issue, we hear from academia, independent advisers to governments, think tanks and the financial services industry on the specific role that financial services can and should play in encouraging adaptation towards a low carbon economy.

Contributors

Matthew Bell is the Chief Executive of the Committee on Climate Change. The Committee is an independent, statutory body established under the Climate Change Act 2008. Its purpose is to advise the UK Government and Devolved Administrations on emissions targets and report to Parliament on progress made in reducing greenhouse gas emissions and preparing for climate change.

Professor Henry Shue is a Senior Research Fellow, Centre for International Studies, Department of Politics and International University of Oxford; and Senior Research Fellow Emeritus, Merton College, Oxford.

Professor Aled Jones is the inaugural Director of the Global Sustainability Institute (GSI) at Anglia Ruskin University. His work in climate finance has been recognised by the State of California and he has received a key to the city of North Little Rock, USA. He is a Co-Investigator for the ESRC Centre for the Understanding of Sustainable Prosperity. He sits on the Resource & Environment Research Sub-committee for the Institute & Faculty of Actuaries. Dr Craig Rye is an economist working at the Centre for the Understanding of Sustainable Prosperity at the University of Surrey. He is currently working on novel empirical analyses of economic instability and in explorative energy-transition models. He has a PhD in Ocean Physics and BSc in Environmental Sciences.

James Orr and Matthew Scott work for the Prudential Regulation Authority at the Bank of England. James is Chief Actuary, General Insurance and provided oversight of the PRA’s report on climate change and insurance. Matthew was principal author of the PRA’s insurance report and leads on environmental risk and green finance, including supporting the Bank’s work co-chairing the G20’s Green Finance Study Group with People’s Bank of China.

Nico Aspinall FIA works as an independent consultant in the investment management and pensions industry, focussing on DC benefits. He is Chair of the Institute and Faculty of Actuaries’ Resource and Environment Board. The Resource and Environment Board is dedicated to making sustainability issues mainstream in actuarial work and works collaboratively with actuaries, financial institutions and regulators to ensure their analyses and advice include sustainability issues.

The Principles for Responsible Investment (PRI) is the world’s leading proponent of responsible investment. It works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole.

ShareAction’s vision is of an investment system that truly serves savers and communities, and protects our environment for the long term. It is working towards a system in which long-term thinking is recognised as the best way to guarantee healthy returns. It believes that anyone can play a part in changing the investment system for good.

Faith Ward’s career has been dedicated to integrating and reporting on ESG risks in finance and investment. Faith leads engagement with the fund management industry and is involved in industry wide initiatives to improve standards in responsible investment, corporate engagement and fund governance and reporting. The EAPF, part of the Local Government Pension Scheme (LGPS), is the pension fund of one of the world’s leading environmental organisations. It is responsible for administering the current and future pension benefits of just under 41,000 members. The EAPF remains one of the best funded in the LGPS. 

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Contact Details

For further information on any of our public affairs or policy work please contact us on:

policy@actuaries.org.uk

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  • Spaces available

    The webinar will discuss the challenges and opportunities schemes face in evaluating end game options, choosing a target state and understanding the impact this strategic decision could have on member outcomes long after the “end state” is reached. Adolfo, Kevin and Rhian bring over 60 years of experience in the industry and a variety of perspectives as scheme actuary, covenant adviser, trustee, de-risking adviser and insurer.

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    Retail banking is going through a period of substantial change as it moves into the digital age. Banks have large amounts of data about their customers and about their risks. Open data application programming interface (APIs) and data science are enabling banks to use their data to offer innovative and sometimes personalised services. Data science is also adding value in risk areas such as fraud detection and cyber security. At the same time, the move to online banking is making it easier for firms including fintechs to enter banking without having to establish branch networks.

  • UK Town Hall 08:30-09:30

    Webinar
    4 December 2020

    Spaces available

    IFoA President Tan Suee Chieh would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual UK Town Hall 2020, hosted by Tan Suee Chieh with IFoA’s Immediate Past President, John Taylor, President Elect, Louise Pryor and IFoA Chief Executive, Stephen Mann.  

  • UK Town Hall 10:00-11:00

    Webinar
    4 December 2020

    Spaces available

    IFoA President Tan Suee Chieh would like to invite you to the Institute and Faculty of Actuaries’ (IFoA) virtual UK Town Hall 2020, hosted by Tan Suee Chieh with IFoA’s Immediate Past President, John Taylor, President Elect, Louise Pryor and IFoA Chief Executive, Stephen Mann.  

  • Spaces available

    Cash-flow driven investing is a game-changer for DB pension funds navigating their end-game. Suitable for sponsors who want to reduce risks on their balance sheets. And for trustees, it shifts the focus to providing greater certainty of returns, managing funding level volatility and ensuring they have enough income to pay cash-flow requirements.

  • Spaces available

    Patrick Kennedy, Partner at Gateley Legal and Founding Director of Entrust (a leading professional pensions trustee company), will be delivering an update on the latest legal developments during the course of 2020. With both a pensions legal perspective and over 25 years of trustee service, Patrick will seek to highlight how the letter of the law has continued to evolve against the backdrop of a difficult and challenging year

  • Spaces available

    The talk will provide an understanding of the priorities and relationships between deficit reduction contributions, in the context of wider scheme funding, and different types of value outflow from the employer based on the working party’s recently published report. 

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    Running off the £2 trillion of UK corporate sector defined benefit liabilities in an efficient and effective fashion is the biggest challenge facing the UK pensions industry. Trustees and sponsors overseeing those schemes need to be clear on their target end-state and the associated journey plan – but too few have well articulated and robust plans.

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    Covid-19 has required an urgent and cross-practice initiative to facilitate the extensive impact this pandemic has across all industries. IFoA members have been keen to contribute in a different way, so we developed the IFoA Covid-19 Action Taskforce [ICAT] to coordinate our effort, with a more efficient governance.

    We have over 500 volunteers and countless topics which we have amalgamated into 93 workstreams.