Joint Forum on Actuarial Regulation launches climate change report

The Joint Forum on Actuarial Regulation (JFAR) has published a report on the science of climate change to aid with actuaries' understanding of climate-related issues.

The report, The Science of Climate Change, represents a collaboration between regulators with an interest in actuarial work, such as the Financial Reporting Council (FRC) and The Pensions Regulator (TPR), as well as highlighting the urgency of climate change and the role actuaries have to play in mitigating its risks.

Designed to address gaps in actuaries’ knowledge of the science behind climate change, the report aims to “give actuaries confidence” to increase their contributions on this topic.

The report includes analysis of global temperature changes and the impact of mass human migration, rising sea level and its impact on the UK and Europe specifically, and implications for food security and human mortality.

It’s analysis also includes the interconnectedness of biodiversity and climate change, and a critical threshold beyond which a system reorganises abruptly and irreversibly known as tipping points.

The report’s authors hope that it will be an important reference tool for professionals wanting to increase their knowledge of climate change and the science behind it.

TPR executive director of regulatory policy, analysis and risk, David Fairs, commented: “From worsening storms to increased risk of fire and flood, this report on the science of climate change makes for shocking but essential reading.

“All pension schemes, regardless of size, are highly likely exposed to climate-related risks and opportunities. Trustees already have access to our guidance in this area but will also need the support of skilled, competent and knowledgeable advisers.

“We welcome work to help improve actuaries’ understanding of climate-related risks and opportunities, so they are better equipped to help trustees manage, and ultimately protect, savers’ retirements.”

Institute and Faculty of Actuaries (IFoA) Regulation Board chair, Neil Buckley, added: “The IFoA has a broad range of guidance and resources to support members in considering climate-related risk as part of their work and as an organisation, we have committed to be net-zero by 2030.

“As a member of JFAR, we believe this report represents another valuable resource to help actuaries better understand and communicate the ecological, social and economic impact of climate change, and the world-changing, systemic risks it presents.”

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