Canadian actuaries calling for mandatory financial reporting around climate change
The Canadian Institute of Actuaries is asking financial stakeholders to take climate risks more heavily into account.
In a letter addressing Canada’s governments, corporations and investors, the institute said quantifying and disclosing the financial impacts of climate change are key actions that will help mitigate the rise in global temperatures and will help Canadians adapt to the changing climate.
The letter said stakeholders should prioritize national-level data collection on the financial impacts of floods, windstorms, wildfires and other climate-related events. It also suggested policies be put in place that mandate financial reporting of climate-related risks and opportunities. Further, it said relevant parties should use environmental, social and governance principles in financial and investment decision-making.
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“Our actuaries work across diverse areas, including property and casualty insurance, pension plans, investments and more,” said Marc Tardif, fellow and president of the CIA, in a press release. “All of these areas see trends of uncertainty caused by changes in our climate, and we believe they are all pointing to the same conclusion: now is the time to act.”
The letter also said Canadians would be able to better understand the financial risks of climate change if a database of information existed outlining how governments, insurers, individuals and organizations end up paying for the ramifications. At present, available data is highly localized, inconsistent and its collection isn’t mandatory, which results in major gaps.
Currently, the CIA is a partner behind the Actuaries Climate index, which has mapped out extreme weather events and sea levels in Canada and the U.S. since 1961, demonstrating an increase in these events. The institute argued the index could be enhanced if it included data on the costs of these events.
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“Actuaries don’t claim to be climate change experts, but we are experts in modelling financial costs and evaluating the impacts of different scenarios,” said Gaetano Geretto, fellow with the CIA and one of the letter’s authors. “The effects of climate change are no different: they are causing significant risk to the sustainability of Canada’s ecosystems, health and economy. We all need to work together to mitigate that risk.”