The Institute and Faculty of Actuaries (IFoA) has launched the first in a series of bulletins on intergenerational fairness. Focussing on the risks to financial stability posed by climate change, it seeks to raise risk awareness among decision makers of not considering long-term implications of societal, environmental and technological changes.
In order “to raise the profile of the debate around what is a fair contract between generations…, so that neither current, nor future generations are unfairly burdened”, the new bulletin takes a financial perspective of longterm roles of discount rates and financial disclosure and the importance of understanding not just the likely possible outcomes, but the worst case scenario when assessing the potential impact of climate change, with a particular focus on the role of long-term institutional investors, such as pension funds and life insurance companies.
IFoA President, Colin Wilson said: “Societies across the world face many complex challenges such as ageing populations, reducing poverty and responding to catastrophic weather events. Intergenerational fairness needs to be considered as a priority for policy makers if we are going to meet today’s needs without putting younger or future generations at a disadvantage.”
Future editions of the Intergenerational Fairness Bulletin will focus on the future of pensions and the funding of health and care services.
- Institute and Faculty of Actuaries (IFoA)
- FDSD provocation by Halina Ward: Democracy in the face of climate change: exploring the present, 2050, and beyond
- When democratic politics become polarized, the rhetoric of politicians often slides towards proclaiming certainties about the future. However, the future is full of uncertainties, it’s all about risk and trade-offs. For the sake of future generations – and our own futures – democratic debate needs to focus on risk and what to do about it, particularly when a possible outcome could be catastrophic down the line. That’s where ‘the precautionary principle‘ comes in to guide our collective decision making. It’s beautifully explained in the video below: