UK Actuaries Sound Alarm on Loss Models Downplaying Climate Risk

The finance industry is relying on climate models that understate the speed at which temperatures are rising, according to a fresh study by Britain’s main association of actuaries.

The Institute and Faculty of Actuaries, which conducted its study together with scientists at the University of Exeter, says the research also shows that financial firms aren’t applying the same rigor to their handling of climate as they do to other serious risks.

Sandy Trust, the report’s lead author and director of sustainability risk at Baillie Gifford, says the use of inadequate models inside the finance industry has left ...