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The Actuary The magazine of the Institute & Faculty of Actuaries

Coalition for Climate Resilient Investment launched

A first-of-its-kind coalition of over 30 organisations across the investment value chain has been launched to boost resilience to climate change worldwide.

First financial sector led initiative on climate change ©iStock

Led by the UK and Jamaica governments, Willis Towers Watson, the Global Commission on Adaptation and the World Economic Forum, the coalition will look to develop a common approach to assessing climate risks.

It aims to transform infrastructure investment by integrating these risks into decision-making, driving a shift towards a more climate resilient economy for all countries, including the most vulnerable.

The launch comes as extreme weather patterns become increasingly frequent worldwide, with Hurricane Dorian recently causing widespread destruction across the Bahamas.

Willis Towers Watson CEO, John Haley, said: “The coalition will be able to harness a unique combination of climate risk analytics coupled with ambitious regulatory and investor-led initiatives. 

“Pricing the risks posed by climate change will create opportunities to build a network of resilient infrastructure in high, medium and low-income countries, enabling us to better prevent future human and financial disasters.”

The coalition will develop case studies to build the business case, and identify the critical enabling environments, for climate resilient infrastructure investment. 

By the end of 2020, analytical tools including a physical risk pricing framework and methodology to prioritise national resilient investment needs, will be developed, alongside a range of instruments to prevent capital flight from vulnerable regions.

Going forward, innovative capital market instruments such as resilience bonds will be structured, and the pricing framework will be implemented across resilient infrastructure investment funds. 

This comes after the Institute and Faculty of Actuaries published a report earlier this year providing guidance on how actuaries should respond to climate change.

Mark Carney, governor of the Bank of England, said: “Achieving the transition to a carbon neutral future will require mobilising mainstream private finance.  

“Advances in reporting and risk analysis are paving the way for investors to realise the opportunities in climate-friendly investment by re-orienting their focus to more sustainable long-term value creation. 

“In this context, the Coalition for Climate Resilient Investment's focus on integrating climate risks into decision-making will help finance the infrastructure investment needed to build an economy more resilient to climate change.”

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