Biodiversity Sessional: Planting the seeds
Nick Spencer, Chair of the IFoA Sustainability Board, provides insight to the latest sessional meeting on Biodiversity, and shares where you can find out more on this important topic.
We are in the midst of a biodiversity crisis. Humans and livestock account for 96% of all mammals leaving only 4% that are wild. Less than a quarter of the world is wildness. Human activity is driving an extinction crisis that, unchecked, imperils the whole of our economy.
Biodiversity was one of my themes to champion as Sustainability Board Chair. So it was with true delight that I had the opportunity to chair the sessional meetings– and with a real appreciation for such a broad-ranging effort. The scope and range of that effort is quite jaw-dropping and humbling:
- 20 authors,
- 5 papers which in the prior last 40 days and nights (including Easter) had been reviewed, revised and approved with the support of 20 reviewers
- Demand from over 200 registered attendees to create two sessional meetings and 14 virtual tables. Each table was supported by a Chair and a scribe.
- Over 60 people directly involved.
I suspect most if not all the above break records for sessional meetings. So thanks to the authors, reviews and all those involved with a particular shout out to the events team that undertook this within a fortnight of more than 20 events and to Joe Kennedy, Sustainability Board’s Research lead who did an exceptional job coordinating and shepherding the review.
And this work is timely. I know from a number of those working at Regulators and with policymakers that they are also starting to engage in the risks of, and impacts on, biodiversity created by the financial industry. The Dasgupta review “Economics of Biodiversity” commissioned by the UK government reflects, in up to 600 pages, the complexity, the challenge, and the critical need of integrating biodiversity into our economic efforts. Here’s my two-line summary:
- We can’t continue doing the same things in the same way and expect different results. The economy can’t be sustained with this level of Biodiversity loss – we have to do things differently.
The challenge for our short-termist financial world is that on a day to day basis, biodiversity loss can be imperceptible. It requires a long-term perspective to articulate the impacts of such long-term risks and uncertainties. Whatsmore, understanding biodiversity risks needs to address with incomplete and complex data as well as address different perspectives on value and fairness. I don’t think Actuaries can solve this alone – but we have developed tools and techniques that help us address each element of the Biodiversity problem.
As a profession, our biodiversity efforts are just getting started. The sessional papers covered introductions to different elements of biodiversity:
- The importance of biodiversity risks: Initial position paper which provides an overall introduction and overview
- The importance of biodiversity: link to zoonotic diseases, which looks at the relationship with zoonotic diseases, and its importance that CoVID19 has made so visible.
- Introduction to biodiversity valuation tools which highlights some of the current efforts to measure biodiversity, a relatively nascent area and where we need to develop metrics and better integrate into our underwriting
- Natural capital – an actuarial perspective considers both the controversy as well as opportunity that the natural capital framework presents and some of the ways that reimagining investment and infrastructure can help improve rather than destroy biodiversity
- Biodiversity & justice consider the different perspective of value and fairness that biodiversity presents. The value of biodiversity varies by both location and co-location, as well as different perspectives of value from those that are local to those at a long distance. These frameworks of multiple values challenge the validity of everything having a single market price – and that a tree only realises its value once it’s cut down.
I strongly recommend actuaries read the recent articles in the March and May edition of The Actuary and all these papers. Each paper provides an introduction to a different aspect of biodiversity. The “link to Zoonotic diseases” might be the only paper that focuses on a specialist area – but as we’ve seen, Zoonotic diseases can affect everything!
I’m also appreciative of the inputs, suggestions and broad debates that went into the sessional roundtables. We are gathering this feedback and developing the next steps. Metrics and links to underwriting are obvious actuarial first steps along with the building out of the understanding of Zoonotic diseases. But framing natural capital value – and creating just values – also have strong actuarial links. So along with better stewardship of investee companies, these are further important areas to develop.
More to come. And I want to encourage the whole profession to get involved. Creating paths to sustainable prosperity is a natural calling for a profession that seeks to evaluate and advise on pathways through uncertain futures.
And, finally, we don’t have to be perfectly altruistic in this. The skills and understanding that actuaries can bring also represent significant opportunities for us to develop actuarial work and our careers. And with your support and given this alignment, I hope that today’s actuarial seeds can grow into a mighty actuarial forest.