Nature Loss: The Hidden Financial Threat You Must Act On

Nature loss is emerging as a critical economic threat, according to a groundbreaking report co-authored by an expert from the Government Actuary’s Department (GAD). This calls for actuaries, policymakers, and financial institutions to prioritize addressing nature loss, rather than treating it as a secondary issue. Georgina Bedenham, who serves as the Head of Climate and Disaster Risk at GAD, contributed to the report titled ‘Tipping into the Wild Unknown’. This document is part of the Institute and Faculty of Actuaries (IFoA) Planetary Solvency series. The report emphasizes that nature serves as essential infrastructure, crucially supporting food systems, water resources, public health, climate stability, and economic activities. While the issue of climate risk has gained traction, the financial risk of nature loss continues to be largely overlooked in the models and scenarios utilized by governments, regulators, and financial organizations. The report outlines immediate risks that are manifesting in food systems, such as soil degradation, water scarcity, and declining pollinators. It also raises concerns about potential acute shocks, like failures in major agricultural regions and trade disturbances that can lead to price instability and economic disruption. Additionally, zoonotic disease risks are addressed, with evidence showing that deforestation and changes in land use can elevate the chances of animal-to-human disease transmission, as demonstrated by the COVID-19 pandemic. Looking into the future, the report cautions that ecosystem tipping points, such as the collapse of coral reefs or pollinator populations, could result in irreversible consequences over human timescales. Co-authors of the report assert that nature risk represents both a financial and societal concern, influencing inflation, supply chains, public health outcomes, and credit and market risk. Given the interconnectedness between climate change and biodiversity loss, relying solely on climate modeling is no longer adequate. In response to the report’s findings, Georgina stated: “The report motivates actuaries to delve into emerging biodiversity metrics and tools for quantification. “Furthermore, it encourages actuaries to adopt qualitative narrative methods for risk management, alongside traditional quantitative techniques. Embracing uncertainty is essential, as integrating nature into decision-making processes is now a necessity.” Georgina Bedenham discusses these findings further in the recent episode of The Actuary podcast. For more information on how nature loss affects economic systems, visit [World Economic Forum](https://www.weforum.org/) or [United Nations Environment Programme](https://www.unep.org/). To explore related insights on climate and environmental financial risk, check out our articles on [www.globemigrant.com/article1](http://www.globemigrant.com/article1) and [www.globemigrant.com/article2](http://www.globemigrant.com/article2). Source: https://www.gov.uk/government/news/nature-loss-an-urgent-financial-risk

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