Sessional Roundtable: The Importance of Biodiversity Risks for Actuaries

Actuaries have a lot to offer biodiversity management over the next decade as the world develops more depth to its response to this global challenge. This sessional offers an opportunity to learn about this emergent risk, to contribute to our thinking as a profession and help us develop the next steps forward. It is beyond doubt that Biodiversity is being lost at an unprecedented rate (a mass extinction). The economic or financial impact of this loss is unknown. An increasing amount of work focusses on how business and government decision making can account for biodiversity through concepts such as natural capital valuation. This is an important topic on which there has been little actuarial discussion to date. Following the development of an initial position paper, four papers have been written by the Biodiversity Working Party of the IFoA on a range of biodiversity topics that are important to actuarial practice: 1. Natural Capital has been championed by the UK Government and various business groups, however, it has also been seen as controversial within some non-governmental organisations. 2. Quantified metrics, such as monetisation, to assess impacts on, and the benefits of, biodiversity is the subject of the second paper where we summarise a number of metrics that may be of use to actuaries. 3. Zoonotic pathogens, where the recent Dasgupta Review suggests that due to biodiversity loss increasing contact between people and wildlife which ultimately leads to spill-over infections where pathogens are transmitted from animals to human hosts. COVID-19 has emphasised the significant risk to finance and the global economy that zoonotic pathogens can represent. 4. Justice within the context of biodiversity is of increasing focus globally. Stakeholders such as shareholders, policyholders, sponsors, scheme members, local and indigenous communities, intergenerational fairness, as well as nature itself, need to be considered in any evaluation. The concepts developed through actuarial fairness may support an understanding of justice.