Nature Loss Is Now a Financial Risk, UK Actuaries Warn

Most of us are used to hearing about nature loss as an environment story: fewer species, more deforestation, more pressure on seas and soils. The new warning from the Government Actuary's Department and the Institute and Faculty of Actuaries asks us to see something else as well. This is also a money story. It is a prices story. It is a public services story. In the report 'Tipping into the Wild Unknown', co-authored by Georgina Bedenham of the Government Actuary's Department, the message is direct: nature loss should be treated as a serious economic threat, not a side issue. That matters because actuaries, policymakers and financial institutions help decide how risk is measured, planned for and absorbed across the economy.

According to the Institute and Faculty of Actuaries report, nature is not an optional extra sitting outside the economy. It works more like essential infrastructure. Food systems depend on healthy soils, stable seasons and pollinators. Water supplies depend on functioning rivers, wetlands and catchments. Human health, climate regulation and everyday economic activity all rest on those same natural systems. **What this means:** when nature is damaged, the harm does not stay in forests or oceans. It can show up in your weekly food shop, in business costs, in supply chains and in the ability of governments to keep basic systems steady.

That is one reason the report is uneasy about how risk is modelled today. Climate risk has gradually moved up the agenda in recent years, but nature risk is still missing from many of the scenarios used by governments, regulators and large financial firms. If the models ignore the living systems that support farming, water and health, the final numbers can look tidier than the real world. For readers, this is a useful media-literacy check. When you hear that markets are pricing risk, it does not always mean every risk has actually been counted. Sometimes the gap is not a lack of danger. It is a lack of attention.

The report says some of the pressure is already visible in food systems. Soil degradation can reduce how much land produces. Water stress can make farming harder and more expensive. Pollinator decline can damage crop yields. None of that belongs in a distant future only. These are near-term pressures that can feed through into availability, prices and trade. The Institute and Faculty of Actuaries also points to sharper shocks, including breadbasket failures and trade disruption. When a major food-producing region struggles, the effects can jump borders quickly. Shortages in one place can become price volatility somewhere else, and instability in supply can turn into instability in the economy.

Another warning in the report is about disease. Deforestation and land-use change can increase the chance of animal diseases spilling into human populations. The paper uses the COVID-19 pandemic as a reminder that a health shock does not stay in hospitals. It can ripple through work, schooling, transport, government spending and financial markets. **What this means:** protecting forests is not only about wildlife. It can also reduce the conditions that make dangerous spillover events more likely. That makes nature policy, public health and economic planning far more connected than they are often presented.

Looking further ahead, the report raises the issue of natural-system tipping points. This is the stage where damage pushes a system past recovery on human timescales. Coral reef collapse is one example. Pollinator collapse is another. Once those systems fail, the effects are not easily reversed by a quick policy fix or a short burst of investment. This is where the language of risk can sound too soft. Some losses are not just expensive; they can close off options for decades. If pollinators disappear or reefs break down, food production, fisheries, tourism and coastal protection can all be hit at once.

That is why the authors argue that climate-only modelling is no longer good enough. Climate change and biodiversity loss do not sit in separate boxes. Hotter temperatures, land-use change, water stress and species decline affect one another. If decision-makers model one without the other, they may miss how fast problems can build. Georgina Bedenham says actuaries need to work with new biodiversity metrics and quantification tools, but not stop there. The report also backs qualitative, story-based approaches alongside traditional number-based methods. In plain terms, we should not wait for perfect data before planning for obvious danger.

For you as a reader, the most important shift is this: nature loss is not being described here as a moral extra for environmental campaigners. The Government Actuary's Department and the Institute and Faculty of Actuaries are treating it as something that can affect inflation, credit risk, market risk, supply chains and health outcomes. That puts it right inside everyday economic life. So the lesson from 'Tipping into the Wild Unknown' is practical. If we carry on treating nature as background scenery, financial planning will keep missing part of the picture. If we treat it as the infrastructure that supports life and trade, the choices made by governments, insurers and investors start to look much more realistic. The original government news item also points readers to an Actuary podcast episode, published on 21 May 2026, where Bedenham discusses the report in more detail.