Policy makers need to take account of intergenerational fairness

The Institute and Faculty of Actuaries (IFoA) has today, 30 January, published the first in series of bulletins on intergenerational fairness.  This bulletin focusses on the risks to financial stability posed by climate change and seeks to raise awareness among decision makers of the risk of not considering long-term implications of societal, environmental and technological changes.

The bulletin considers the role of discount rates, financial disclosure and the importance of understanding not just the likely possible outcomes, but the worst case scenario when assessing the potential impact of climate change, with a particular focus on the role of long-term institutional investors, such as pension funds and life insurance companies.

Commenting on the Intergenerational Fairness Bulletin, IFoA President, Colin Wilson said:

 “Societies across the world face many complex challenges such as ageing populations, reducing poverty and responding to catastrophic weather events.   Intergenerational fairness needs to be considered as a priority for policy makers if we are going to meet today’s needs without putting younger or future generations at a disadvantage.

“By bringing together contributions from thought leaders, we hope to raise the profile of the debate around what is a fair contract between generations in responding to long-term challenges, so that neither current, nor future generations are unfairly burdened.”

Future editions of the Intergenerational Fairness Bulletin will focus on the future of pensions and the funding of health and care services.

Nico Aspinall, Chair of IFoA Resource and Environment Board comments:

“Climate change is one of the most important challenges of the 21st century. There is a clear risk that climate change could push large parts of the world backwards economically. Governments, regulators and the financial service industry have a key role to play in reforming the financial system if we are going to prevent further exacerbating climate risk in any meaningful way”

~ENDS~

Editorial notes:

Download copies of the Intergenerational Fairness Bulletin. 

Organisations contributing to the bulletin include:

• Committee on Climate Change
• Principles for Responsible Investment
• Prudential Regulation Authority
• University of Oxford
• Global Sustainability Institute
• Environment Agency Pension Fund
• Share Action
• Institute and Faculty of Actuaries

About the Institute and Faculty of Actuaries

The Institute and Faculty of Actuaries (IFoA) is a royal chartered, not-for-profit, professional body.

Research undertaken by the IFoA is not commercial.  As a learned society, research helps us to fulfil our royal charter requirements to further actuarial science and serve the public interest. 

Actuaries provide commercial, financial and prudential advice on the management of a business’s assets and liabilities, especially where long term management and planning are critical to the success of any business venture. They also advise individuals, and advise on social and public interest issues.

Members of the IFoA have a statutory role in the supervision of pension funds and life insurance companies. They also have a statutory role to provide actuarial opinions for managing agents at Lloyd’s.

Members are governed by the Institute and Faculty of Actuaries. A rigorous examination system is supported by a programme of continuing professional development and a professional code of conduct supports high standards reflecting the significant role of actuaries in society.

The IFoA is available to provide independent expert comment to the media on a range of actuarial- related issues, including enterprise risk management, finance and investment, general insurance, health and care, life assurance, mortality, and pensions.