ESG Integration and Stewardship

Overview

ESG integration and stewardship are increasingly relevant to the work of the actuaries.

There is a growing body of evidence that shows incorporating ESG factors into the investment process does not detract from performance and may even enhance performance.

Promoting sustainable finance and reducing financial risks from ESG issues like climate change are increasingly within the remit of regulators across the world.

Key stakeholders of the actuarial profession are concerned for people and the planet - including clients, customers, pension scheme members and employees.

Firms that employ actuaries are participating in sustainable finance initiatives and / or making individual commitments relating to ESG integration and stewardship.

The investment and financing activities of pension schemes, insurers, asset managers and banks are heavily scrutinised by the media and activists alike.

Purpose

The Environmental, Social, and Governance (ESG) Integration & Stewardship Working Party was formed in 2020 with a number of volunteers across the actuarial profession from a range of practice areas. The working party was formed under the sponsorship of the Finance and Investment Board with support from the Resource and Environment Board.

The purpose of the working party is to act as an ongoing source of knowledge within the Institute and Faculty of Actuaries (IFoA) on ESG integration and stewardship with the specific focus on delivering the objectives outlined below.

Objectives

The objectives of the Working Party are to:

·         Help actuaries navigate a complex and evolving ESG and stewardship regulatory environment (including soft regulation and voluntary initiatives) and understand its relevance to their work;

·         Share examples of how actuaries across different practice areas are responding to ESG and stewardship regulation, voluntary initiatives and trends; and

·         Highlight useful tools, research, and materials on ESG and stewardship to support actuaries on their work in this area.

Outputs

TBC