Policymakers and stakeholders have been urged to adopt a risk management approach to identify and mitigate the effects of further temperature rises, after industry analysis suggested that catastrophic outcomes from climate change are now “inevitable”.

The report from the Institute and Faculty of Actuaries (IFoA), written in collaboration with The Climate Crisis Advisory Group (CCAG), warned that even under the current targets set out in the Glasgow Pact, global society is heading towards a ‘ruin scenario’.

Indeed, the analysis revealed that a global temperature increase of 1.5°C could cause irreversible changes to the Earth’s climate, such as Amazon die back, permafrost melt, or the collapse of ice sheets in Greenland, which could interact and "cascade like dominoes".

However, the report argued that a risk management approach could help support the broader effort to build resilience and climate adaptation into national and international systems as extreme events become more frequent, stating that it is "crucial" that policymakers have a degree of climate and risk literacy as they plan for uncertain futures.

“A risk-management approach would accept that not all risks can be reduced to zero and would ensure the worst outcomes and those identified as unacceptable by society remain below appropriate levels of likelihood and severity,” it stated.

The report also suggested that current pledges will prove inadequate to meet even the 1.5°C target, highlighting previous analysis from Carbon Tracker, which revealed that existing carbon budgets give around a 50 per cent chance of limiting global warming to 1.5°C.

“We would be unlikely to trust our pensions or savings to an insurer with a 50 per cent chance of ruin, yet by basing our actions on the lowest risk pathway we are implicitly accepting this level of risk when it comes to climate change,” the report stated.

It also warned that carbon budgets have large margins for error, with some sources suggesting that the remaining carbon budget for limiting warming to 1.5°C is already zero.

More broadly, the report called for action to be accelerated by educating the public to be more carbon and climate literate.

Climate Crisis Advisory Group chair, David King, commented: “Human caused climate change has run down the clock, and we are fast running out of time to keep the critical 1.5 degrees hopes alive. But whilst this may seem daunting, we have the science at hand to reduce emissions and stabilise the climate.

“What this report clearly shows is that even at 1.5 degrees serious mitigation and risk management will be required alongside a strategy of reduce, remove and repair to deliver a manageable future for humanity.”

IFoA Sustainability Board former chair, Sandy Trust, added: “Climate change is a risk-management problem on a global scale. Policymakers must act now to accelerate climate action to avoid catastrophic impacts on society.

“We have underestimated the pace of climate change, as well as the level of risk associated with 1.5 degrees of warming. We need to prepare for further climate impacts, as well as reducing emissions rapidly.

"However, we have the solutions required and it is within our collective capabilities to steer our future back onto a safe course.”

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