As long-term risk managers such developments are of crucial interest to actuaries. The Sustainability practice area works to identify the implications for actuaries and their clients and help in the development of appropriate responses.
Foremost amongst these is climate change, an existential threat which has implications for existing practice areas such as:
- pension actuaries in terms of the potential impact on investment values, investment returns, funding strategies, mortality and demographics, and sponsor covenants
- general insurance actuaries in regard to climate-related property claims, business continuity risks, liabilities to third parties and for insurers of directors and trustees
- life and health actuaries in regard to investment values and trends in mortality and morbidity
- finance and investment actuaries in terms of the impact on investment risks, returns and hence strategy, and the development of innovative investment vehicles to assist in climate change adaptation and mitigation
- risk management in developing methodologies to recognise the impact climate change could have on insurance products, markets, reserving and regulation.
The Sustainability practice area works closely with all other practice areas in responding to these issues. It has created a number of Practical Guides for actuaries in the different investment practices which are available to download and included: An introduction to climate change for actuaries.
Other sustainability impacts on actuarial work include:
- resource limitations, and the need to live sustainably in a finite world, which have implications for economic growth, investment returns and liability reserving across all practice areas
- the implications of the emergence of broader societal objectives that recognise the importance of health, education, leisure, poverty reduction and the natural environment, and the limitations of a GDP growth target.
In addition to considering the impact of environmental change on existing work, the Sustainability Board (the “Board”) fosters the development of actuarial involvement in new areas of environmental work as well as those that support the Sustainable Development Goals, for example:
- advising the government and energy generators on long term energy projections
- advising the nuclear industry on funding for long term decommissioning and waste disposal
- wider risks to business due to environmental change and regulation
- the potential insurance costs for carbon capture and storage
- valuing fossil fuel reserves
- assisting organisations dealing with disaster relief.
This is a key part of the work of the Board.
The Board is a senior, member-led committee of volunteer actuaries drawn from a variety of existing practice areas. It advises the IFoA on sustainability issues, including Climate-related risks and is a source of expertise within the profession on such matters. It supports and promotes the interests of members in accordance with the profession’s strategic objectives. The Board has oversight of the Sustainability Research Committee & CPD Committee which co-ordinates its research and CPD activities. Until July 2020, the Sustainability Board was known as the Resource and Environment Board.
Many environmental issues have a global impact and the Sustainability Board is keen to work with IFoA members across the world. It also supports the work of the International Actuarial Association Resource and Environment Working Group.
The Sustainability Board builds on the work conducted by the former Resource and Environment Member Interest Group (MIG). The research and activities that were undertaken by the MIG are now conducted by the Resource and Environment Board. The Board supports a number of working parties, the Sustainable Development Goals MIG and it the Practice Board sponsor of the IFoA’s Financial Systems Innovation Centre (FinSTIC).
The Board welcomes volunteers from all areas of the professional to support and engage in sustainability issues. Find out further details on these opportunities and how to get engaged.
- 18 June 2018
- 23 June 2020
- 19 September 2016
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For more information about Resource and Environment working parties contact the Communities Team
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This year's GIRO has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the general insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's GI Online Learning Resource area.
This webinar will provide an update on the emerging thinking around future regulation of DB schemes:
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.
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.
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.
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
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.
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.