We interviewed Nick Spencer, Chair of the IFoA sustainability Board, covering his ambitions as Chair and his thoughts on actuarial involvement in sustainability. Here is what he had to say.
The IFoA Sustainability Board is divided into 6 different portfolios: Education, Communities, Policy and Regulation, Sustainable Development Goals (SDGs), Events, and Research. As Chair, I act as an enabler to give autonomy to each of the portfolio leads to develop their area.
Earlier this year, I set my three key themes as Chair:
My main focus is ensuring we deliver each portfolio’s objectives and these themes. This requires time, energy and enthusiasm. It also requires the help of many others.
Materiality. We do it because it matters. Climate is a key financial risk. There are other drivers such as regulation, public interest, policymakers, but to me, these are always secondary to materiality.
The single largest enabler is awareness. To start addressing a risk and for it to become part of our DNA, we need to become aware of it. After that comes building the skillsets and tools to help address the risk. And finally, to share best practices so that we can improve each other's efforts. Learn. Develop. Share.
The first step, again, is awareness. These are all financial risks that we need to consider both how they affect, and are affected by, our work.
Biodiversity loss and ecosystem collapse ranks as a top five global risk in the World Economic Forum’s 2020 Global Risks Report. The issue includes soil and agriculture, pollution, and that’s before I start talking about deforestation or the nitrogen crisis.
Human rights, failures, particularly in regard to modern slavery, are deeply embedded within each of food production, clothing and construction here in the UK alone. That is damning. We need to get more thoughtful in how we address human rights.
Diversity (& inclusion). We can only succeed if everyone succeeds. Fairness is an actuarial concept and inclusion is fundamentally about fairness. It is also bound to the sustainable development goals. The solutions to poverty, hunger, education, health, and decent work are all dependent on being inclusive. Actuaries should embrace diversity with joy, but currently the profession is not diverse enough. The Diversity Action Group is helping address this, but we have a long way to go. We must, and we will, do better.
Sustainability risk is deeply intertwined with uncertainty. Risk and uncertainty lie at the very soul of the actuarial profession. And it is impossible to seek an understanding of future uncertainties without embracing thought-leadership.
The main focus is on supporting the 38 recommendations from the Climate-related risk at the IFoA report. Council agreed that climate related risk should be understood and considered by its members in the same way as other major risks such as interest rate risk and mortality risk.
The first piece of advice is to look up Tan Suee Chieh’s tips for actuaries and absorb them.
It is all about curiosity, learning and engagement. Be curious about the world around you and then start thinking about how that links to finance and how we can do better. Sign up for the weekly newsletter, events (IFoA & non-IFoA), the SDG podcasts, join the Sustainability Volunteer Group and follow the curated learning.
Having built that curiosity, think about the areas it can apply to your work. Talk about the areas within your employer, volunteer, look for opportunities that emerge. There’s a whole array of opportunities around the Taskforce for Climate Related Financial Disclosures (TCFD), PRA stress tests, capital requirements and inclusive insurance. Match your technical interests and strengths with these emerging opportunities.
Whilst these opportunities are fundamentally actuarial, actuaries also need to apply Tan Suee Chieh’s call for imagination, curiosity and courage. If we can look at something differently, to have the imagination and courage to pursue our ideas, then this can lead to a highly interesting, innovative and rewarding career in Sustainability. I recommend it to everyone with imagination, curiosity and courage.
Read the full interview on the Sustainable Finance Community’s LinkedIn page.
