ACTUARIAL SCIENCE & SUSTAINABILITY
What is the Relationship Between Sustainability and Actuarial Science?
Actuarial Science enhances sustainability by including social and environmental factors in the mathematics, statistics, and modeling used to understand, predict, and solve complex business problems.
Actuarial science is a discipline that uses calculus, probability and statistics, financial and actuarial mathematics, economics, finance, risk management and more to define, analyze, and solve complex business, social, and sustainable problems. Actuarial skills allow one to be a long-term risk manager and evaluate the financial impacts and risks of a variety of things including economic, environmental, and social sustainability.
According to Actuaries Digital, actuarial science aids sustainability through:
- Creating insurance products that incentivize managing and mitigating risks of weather, climate, and environmental changes
- Accounting for environmental and social factors on short- and long-term economic growth
- Supplying a quantitative argument for a long-term view of and need for sustainability and sustainable development
Institute and Faculty of Actuaries on “Sustainability, Climate Change and the Actuarial Profession”
Why Sustainability Needs Actuarial Science
Sustainable actuarial science plays an important role in including the needs of future generations in the calculation of risk.
This unique and critical role of actuaries in sustainability has led to the development of committees such as the Climate and Environmental Sustainability Research Committee in the Society of Actuaries and the Sustainability Board in the Institute and Faculty of Actuaries. These committees recognize the important role actuaries play in sustainable planning.
The contributions of these committees includes:
- Modeling that drives better sustainable decision making
- Analysis that includes the issues articulated in the UN Sustainable Development Goals (SDGs)
- Application of the triple bottom line and its ability to make sustainability/ESG calculations
- Plans for the actuary profession to achieve certain sustainability/ESG benchmarks
ADVANCE YOUR KNOWLEDGE OF ACTUARIAL SCIENCE AND SUSTAINABILITY
Learn what sustainability risk management is all about and its importance
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