16 January 2025
The global economy could face a 50% loss in GDP between 2070 and 2090, unless immediate policy action on risks posed by the climate crisis is taken. Populations are already impacted by food system shocks, water insecurity, heat stress and infectious diseases. If unchecked, mass mortality, mass displacement, severe economic contraction and conflict become more likely.
‘Planetary Solvency – finding our balance with nature’ is the IFoA’s fourth report in collaboration with climate scientists. The report develops a framework for global risk management to address these risks and show how this approach can support future prosperity. It also shows how a lack of realistic risk messaging to guide policy decisions has led to slower action than is needed.
The report proposes a novel Planetary Solvency risk dashboard, to provide decision-useful risk information to support policymakers to drive human activity within the finite bounds of the planet that we live on.
Sandy Trust, Lead author and IFoA Council Member, said:
“You can’t have an economy without a society, and a society needs somewhere to live. Nature is our foundation, providing food, water and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity which we must take action to avoid.
“Widely used but deeply flawed assessments of the economic impact of climate change show a negligible impact on GDP, rendering policymakers blind to the immense risk current policy trajectories place us in. The risk led methodology, set out in the report, shows a 50% GDP contraction between 2070 and 2090 unless an alternative course is chartered.”
If you wish to learn more about climate risk concepts relevant to actuarial work, the IFoA offers an 8-week online Climate Risk and Sustainability Course.
Read the summary risk outlook and policy recommendations in our one-page summary of the full report.
Our climate risk tool addresses the discrepancy between climate projections and policy outcomes. It provides a comprehensive overview of current and projected risks (up to 2050) across four key domains: climate, nature, society, and the economy.
The ‘Planetary Solvency Risk Dashboard’ makes it possible to visualise and assess the risks if we continue on our current path towards exceeding planetary boundaries. Risks like the impacts of global food and water shortages on populations. And the climate tipping points that, once triggered, could limit our ability to prevent the worst outcomes.
Launched in March 2025 with University of Exeter, the dashboard includes a novel risk commentary on nature, society and economy. With 1990-2025 data, it illustrates how risks profiles have worsened over time because of slow climate action and improved knowledge about these impacts.
The climate change risk assessment in Planetary Solvency is accompanied by a high level commentary, to support the climate change highlights provided in this report.
