Actuaries are taking on a rapidly expanding role in climate change and sustainability work across insurance, pensions, investments, and wider financial services, according to a new thematic review from the Institute and Faculty of Actuaries (IFoA).
More than 80% of respondents to the organisation’s survey reported an increase in actuarial involvement in climate-related activity in recent years.
The IFoA found that actuaries were advising on climate risks across a wide range of domains, including stress and scenario testing, strategic asset allocation, and the development of sustainability frameworks.
“Climate and sustainability are defining issues of our time, and the skills of actuaries are making a difference in how we understand and manage associated risks across a range of domains.”
Alan Marshall, IFoA
Contributors also pointed to growing work on physical and transition risk modelling, particularly as firms adapt to evolving regulatory expectations.
Alan Marshall, IFoA review actuary, said: “Climate and sustainability are defining issues of our time, and the skills of actuaries are making a difference in how we understand and manage associated risks across a range of domains. The wider context is of consistent and growing scientific evidence, challenged by a changing political landscape.”
The review noted that climate-related work was increasingly multi-disciplinary, with actuaries collaborating extensively with specialists across organisations. However, participants identified challenges in communicating climate risks and opportunities to boards and clients. They also said work was often shaped by regulatory drivers, with budget constraints limiting the scope of some projects.
Sam Younger, lay chair of the IFoA’s Regulatory Board, said: “This report… recognises the power of collaboration on this major cross-cutting topic. To support actuaries working in this rapidly changing landscape, the IFoA Regulatory Board is examining how existing guidance and professional skills resources can evolve.”
The review forms part of the Actuarial Monitoring Scheme and is intended to support ongoing thought leadership, policy development and high-quality actuarial practice. The report aims to help actuaries and those who rely on actuarial advice understand the breadth of work underway and the support available for continued development.
