Planetary Solvency – finding our balance with nature
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Current climate policies risk catastrophic societal and economic impacts
The global economy could face a 50% loss in GDP between 2070 and 2090, unless immediate policy action on risks posed by the climate crisis is taken. Populations are already impacted by food system shocks, water insecurity, heat stress and infectious diseases. If unchecked, mass mortality, mass displacement, severe economic contraction and conflict become more likely.
鈥楶lanetary Solvency 鈥� finding our balance with nature鈥� is the IFoA鈥檚 fourth report in collaboration with climate scientists. The report develops a framework for global risk management to address these risks and show how this approach can support future prosperity. It also shows how a lack of realistic risk messaging to guide policy decisions has led to slower action than is needed.
The report proposes a novel Planetary Solvency risk dashboard, to provide decision-useful risk information to support policymakers to drive human activity within the finite bounds of the planet that we live on.
Sandy Trust, Lead author and IFoA Council Member, said:
鈥淵ou can鈥檛 have an economy without a society, and a society needs somewhere to live. Nature is our foundation, providing food, water and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity which we must take action to avoid.
鈥淲idely 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. The risk led methodology, set out in the report, shows a 50% GDP contraction between 2070 and 2090 unless an alternative course is chartered.鈥�
If you wish to learn more about climate risk concepts relevant to actuarial work, the IFoA offers an 8-week online Climate Risk and Sustainability Course.
Risks and recommendations
Read the summary risk outlook and policy recommendations in our one-page summary of the full report.
Planetary Solvency Risk Dashboard
Our climate risk tool addresses the discrepancy between climate projections and policy outcomes. It provides a comprehensive overview of current and projected risks (up to 2050) across four key domains: climate, nature, society, and the economy.
The 鈥楶lanetary Solvency Risk Dashboard鈥� makes it possible to visualise and assess the risks if we continue on our current path towards exceeding planetary boundaries. Risks like the impacts of global food and water shortages on populations. And the climate tipping points that, once triggered, could limit our ability to prevent the worst outcomes.
Launched in March 2025 with University of Exeter, the dashboard includes a novel risk commentary on nature, society and economy. With 1990-2025 data, it illustrates how risks profiles have worsened over time because of slow climate action and improved knowledge about these impacts.
Climate change supplementary material
The climate change risk assessment in Planetary Solvency is accompanied by a high level commentary, to support the climate change highlights provided in this report.
Clarification of the Planetary Solvency risk impact matrix
The figure in appendix 1 is a framework for classifying the severity of different potential impacts. It is not a forecast that a particular temperature outcome will cause a specified number of deaths.
Severity categories, not predictions
The matrix defines 5 separate dimensions of impact:
Economic loss
Human mortality
Climate change
Nature loss
Societal disruption
For each dimension, it provides thresholds indicating what the report鈥檚 authors would describe as 鈥榣imited鈥�, 鈥榮evere鈥�, 鈥榙ecimation鈥�, 鈥榗atastrophic鈥� or 鈥榚xtreme鈥�. These are severity categories designed to help decision-makers compare risks and decide which outcomes would be outside an acceptable risk appetite. They are not predictions that those outcomes will occur.
Crucially, the categories should be read vertically within each individual column, not horizontally across each row as a single scenario. Items appearing on the same row share a severity label, but this does not mean that reaching that level in one dimension automatically causes 鈥� or demonstrates that we have reached 鈥� the same level in every other dimension.
For example, the matrix classifies warming of 3掳C or more by 2050 as an 鈥榚xtreme鈥� impact in the climate dimension. Separately, it classifies more than 4 billion deaths as an 鈥榚xtreme鈥� impact in the mortality dimension. Their placement in the same row does not mean the report projects that 3掳C of warming by 2050 would result in more than 4 billion deaths. The mortality figure defines what the authors would regard as an impact of extreme severity. It is not the modelled consequence of the temperature figure beside it.
A simple analogy would be a hospital triage scale. A very high temperature and a particular degree of organ failure might both be classified as 鈥榗ritical鈥�, but that does not mean one necessarily produces the other. They are different indicators placed on a common scale to communicate severity.
What a full risk assessment would entail
A full risk assessment would involve an additional step: assessing both the potential impact and the likelihood of that impact occurring over a defined period. It would also consider the pathways linking the dimensions. For example, how climate change might affect ecosystems, food and water systems, economies, conflict and mortality. Those relationships are complex, uncertain and influenced by factors such as adaptation, policy choices, vulnerability, inequality, technology and the resilience of social systems.
The report therefore does not assign a single, automatic chain of consequences from temperature to mortality. Indeed, it explicitly states that the illustrative assessment did not plot a mortality trajectory because there was too little research on large-scale mortality from interacting climate, nature and societal risks to support such an assessment.
Further clarification on intended interpretation
provides a shorter explanation of the intended interpretation. It notes that climate and nature risks are interconnected and can increase the likelihood of societal consequences, but that reaching a particular severity level in the climate dimension does not mean an economic or mortality impact at the same level occurs immediately. It illustrates this by explaining that the dimensions may occupy different positions on the matrix at the same point in time.
Accordingly, it would not be accurate to describe 鈥渕ore than 4 billion deaths at 3掳C by 2050鈥� as a projection made by the Planetary Solvency report. A more accurate description would be:
The report classifies 3掳C or more of warming by 2050 as an extreme climate impact. Separately, its risk-classification framework defines mortality exceeding 4 billion as an extreme mortality impact. It does not project that the former will necessarily cause the latter.
The report鈥檚 core warning
This clarification should not be taken to imply that 3掳C of warming would be safe. The report鈥檚 core warning is that warming at this level could create profound risks through interacting climate, ecological and societal systems. The purpose of the matrix is to make severe and potentially systemic outcomes visible so that they can inform precautionary risk management 鈥� not to present a quantified forecast of deaths.
The European Actuary article (linked above) provides further context on the Planetary Solvency approach and explicitly addresses the need to assess each risk dimension separately.