Kathmandu. More than 80 per cent of actuaries who took part in a recent study by the Institute and Faculty of Actuaries (IFOA) said their professional involvement in climate change and sustainability has increased in recent years.
According to IFOA’s thematic review report ‘Actuary Engagement in Climate and Sustainability’, actuaries are increasingly advising firms and clients on a wide range of sectors such as insurance, pensions and investment, as well as banking. Specific areas that actuaries contribute include stress and scenario testing, strategic asset allocation, sustainability frameworks, and physical and transition risk modeling.
However, the study found that actuaries face challenges in communicating climate-related risks and opportunities. The complaints included that climate and sustainability work is often driven by regulatory requirements and that firms’ budget constraints could affect the scope of such work.
Noting the changing scientific research and geopolitical landscape that threatens the climate change consensus, the report stresses the importance of ‘focusing on evidence-based analysis and research’ and practising business judgment to apply this to potential future scenarios. Alan Marshall, IFOA Review Actuary, said: “Climate and sustainability are critical issues of our time and the skills of actuaries are making a difference in how we understand and manage risks involved across different sectors. ’
Supporting IFOA members to influence and lead the movement in this area is critical, the report said. This review highlights specific areas where it can be improved. – Asia Insurance Review
