Climate change has wide reaching implications for the work done by actuaries, due to its impact on the economy, the risks from natural disasters, the impact on human health and the value of assets held by financial institutions and pension schemes.
And 2021 is the “make or break” year for climate change, according to UN Secretary-General António Guterres, at the launch of the annual World Meteorological Organization’s report in April. Activity is accelerating on a range of fronts as we head towards COP26, the UN Climate Change Conference, due to take place in November in Glasgow.
The Society’s Sustainability and Climate Change Steering Group (SCCSG), established in 2020, has likewise been ramping up its activity across five workstreams. These are: Education and Guidance, Research, Member Engagement, External Engagement and SAI Green Goals.
This is the first of the SCCSG’s Blog Series on sustainability and climate change. Further posts will be published regularly. If there are particular topics that you would like to see covered in the series, or if you would like to contribute a post yourself, please contact email@example.com.
What has the SCCSG done so far? Below is a summary of the key activities.
- Engagement with each of the practice committees: The Steering Group has established a basis for collaboration with each of the practice committees. Some of the committees, in particular, the General Insurance and Finance & Investment committees, are already active in this space. Several committees are particularly interested in arranging educational events and materials for members. The committees also contributed a number of helpful observations and leads that we have taken on board for our work.
- Responses to consultations: The steering group has contributed to the Society’s input to AAE submissions to a number of EIOPA consultations related to climate risk, including on the "draft Opinion on the supervision of the use of climate change risk scenarios in ORSA" and the “discussion paper on methodology on potential inclusion of climate change in the Nat Cat standard formula”. We also contributed to the IAA response to an IAIS consultation on their draft Application Paper on the “Supervision of Climate-related Risks in the Insurance Sector”. Most recently, we have responded on behalf of the Society to the Government’s consultation on the National Climate Action Plan.
- Representation within the IAA and AAE: We have nominated a Society representative to the IAA’s Resource & Environment Working Group and to the AAE’s Sustainability and Climate-Related Risks Working Group. One of our members, Joe Kennedy, is also a member of the IFoA Sustainability Board, providing a connection to IFoA activities in the sustainability space.
- We have engaged with a number of Irish organisations, including the Central Bank of Ireland and the Pensions Regulator, to identify areas of mutual interest. A particular mention is warranted for Sustainable Finance Ireland (SFI). Together with the IAA, we are planning to participate in SFI’s Climate Finance Week in early October. We have also nominated a member of our group to SFI’s Insurance Working Group which, between June and October 2021, will feed into the development of a National Sustainable Finance Roadmap under the Ireland for Finance Action Plan 2021.
- We are developing an SAI green policy document in conjunction with the SAI staff (with particular thanks to Sheila Normanly). The SCCSG reported to the March Council meeting and recommended that Council consider setting a net zero carbon target for the Society. Council was broadly supportive of this proposal and has asked the steering group to flesh it out for further consideration.
- Climate risk events for members: Our first CPD event, “Practical Considerations of Sustainability and Climate Change - A Panel Discussion”, took place on 10 May and attracted a large audience.
- Information-sharing: We are in the process of establishing a landing page for members for sharing information on sustainability and climate change issues and already have a number of lists of interesting material for members prepared. In the meantime, a useful starting point is the IFOA’s paper: “Climate Change for Actuaries: An Introduction”.
- A member survey to benchmark members’ take on sustainability and climate change issues, launched by the SAI Chief Executive in April, received a phenomenal response: nearly 300 members took the time to provide us with their views. This clearly indicates the level of members’ interest and the importance of this topic for the profession. Your responses will help to tailor the steering group’s work to meet your needs and priorities. You will hear more about the results of the survey in our next blog post.
Published June 2021
The views of this article do not necessarily reflect the views of the Society of Actuaries in Ireland, the Sustainability and Climate Change Steering Group, or the author’s employer.