Biodiversity and nature-related risks policy statement

Full statement

The IFoA recognises the significant social, economic, and financial risks posed by biodiversity loss. The potential impacts of biodiversity loss are global and systemic. The loss of biodiversity threatens the health of ecosystems that provide services to the economy, including animal pollination of food crops, natural water treatment and fertile soil and has significant implications for the population's health, longevity and the entire financial system. Furthermore, support for biodiversity and nature is critical to climate change's net-zero emissions ambitions through its carbon capture and sequestration.

We are a profession specialising in risk management. The risks associated with the destruction of the environment and loss of biodiversity are hard to quantify due to their long-term, uncertain and intangible nature. Mitigating this risk is urgent. The best value insurance premium that society can pay is to reduce our biodiversity and nature loss today in order to avoid the irreversible consequences tomorrow.

The IFoA supports the aims of the UN Convention on Biological Diversity (CBD), which sets out to conserve global biological diversity, the sustainable use of its components and the fair and equitable sharing of its benefits. We support the aims of the 2022 Kunming-Montreal Global Biodiversity Framework (GBF) and seek to support our members in the achievement of its goals and targets.

The IFoA will:

• advocate for the development of effective policy frameworks worldwide and methods for managing biodiversity risk including by understanding the unintended consequences of the concept of natural capital and different valuation metrics
• use the actuarial skill set and influence to help equip the wider global financial services markets to fully incorporate biodiversity risk
• support actuaries in their understanding of biodiversity risk through a set of think pieces, webinars, education resources and blogs
• advocate for better disclosure of consistent and robust information about biodiversity risk by corporates and other market participants
• support collaborations between its members and other organisations to help develop and align national and global financial systems with a just, sustainable economy that manages biodiversity risk and seeks to enhance the natural environment

The IFoA is a signatory of the Sustainable Finance Education Charter, the UN's Principles for Responsible Investment, and the UN's Principles for Sustainable Insurance. We will continue to work with these and other organisations, such as the Taskforce for Nature Related Financial Disclosure (TNFD), to better align the finance system with an understanding of biodiversity risk.