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About Sustainability

The social, business and financial worlds are increasingly being affected by environmental and societal risks, the likelihood of future changes and the measures taken by governments to try to deal with them.

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.

Related documents

Contact Details

For more information about Sustainability working parties contact the Communities Team

professional.communities@actuaries.org.uk

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Events calendar

  • Spaces available

    Over recent months there has been a sharp rise in M&A activity involving British businesses, with interest from overseas, domestic buyers and Private Equity investors.  

  • Spaces available

    Frank Redington is recognised as one of the most influential actuaries of all time. In this talk, Craig will review some of Redington's most important ideas. He will identify the consistent actuarial principles that form a common thread across the contributions Redington made to a broad range of actuarial fields, and will highlight the ongoing relevance of Redington's thinking to 21st century actuarial practice.

  • Spaces available

    The IFoA Mental Health working party look back over their week of blogs and podcasts considering all aspects of the relationship between mental health and life insurance. The expert panel spans adviser, underwriter and actuarial experience and they  explore triggers for purchasing insurance relating to mental health, the various routes to insurance and how these may be more suited to different people depending on their conditions and preferences, the products and processes involved in purchasing these as well as what claims and support are available to policyholders and how to access them.

  • Spaces available

    Part of the 'Finance in the Public Interest 2022' webinar series. If it was ever okay to consider your business in isolation from its surroundings, today it most definitely is not. Thinking about business within its surrounding system is now a necessity. The question we seek to discuss is: How should we prescribe the boundaries in which we consider problems to enable us to create better products and more resilient companies and systems?

  • Spaces available

    What will happen to DC pension savers who see life annuities as poor VFM but still want an income for life?  Pooled annuity funds could offer them a decent lifetime income while reducing significantly the complex choices and risk inherent in income drawdown.  They could be the next generation of CDC pension schemes, slotting into the existing DC framework as a post-retirement option.