A joint study released in January 2025 by the IFoA and University of Exter says that the global economy could face a 50% loss in GDP between 2070 and 2090 unless immediate action is taken on the risks posed by climate change.
According to the 40-page study Planetary Solvency the populations are already affected by food system shocks, water insecurity, heat stress and infectious diseases. Unchecked climate change will increase the likelihood of two billion deaths, mass displacement, severe economic contraction and conflict.
The study proposes a “planetary solvency” dashboard to provide policymakers with risk information, arguing that action has been slowed by a lack of realistic risk messaging.
It also calls for annual planetary solvency assessments to be carried out by “an appropriate body” such as the International Monetary Fund or OECD. It said systemic risk officers should work at supranational, national and subnational levels to enhance systemic risk management capability.
IFoA council member and lead author of the report Sandy Trust said, “Widely used but deeply flawed assessments of the economic impact of climate change show a negligible impact on GDP, rendering policymakers blind to the immense risk current policy trajectories place us in.”
University of Exter professor and co-author of the report Tim Lenton said, “Current approaches are failing to properly assess escalating planetary risks or help control them. Planetary solvency applies the established approaches of risk professionals to our life-support system and finds it in jeopardy. It offers a clear way of seeing global risks and prioritising action to limit them.”