Graham Hall is a director in the actuarial services group at PwC US, where he focuses on physical risk modelling, climate change and related risk management and risk mitigation strategies.
He has worked on numerous climate change risk assessment, scenario analysis and TCFD reporting projects for life and non-life insurers. He also has significant experience on the use and modification of physical catastrophe risk models, including for the UK's flood risk pool and a Lloyd's syndicate.
He is also a member of the Climate Change Committee for the Casualty Actuarial Society in the US.
What inspired you to work on climate change issues?
I recognised the importance of climate change as a global systemic issue at an early stage in my career, and the relevance of my actuarial skillset to generating solutions towards solving the problem.
I started my career in the London market where I spent a lot of time working with insurers on their parameterisation and use of natural catastrophe models. There is a natural link between catastrophe modelling and climate change, so when I relocated to the US and got the opportunity to start working on environmental issues I jumped at the chance.
I now spend 100% of my time advising clients on the impacts of climate change on their businesses and how they can decarbonise, and ways to adjust their strategies to manage and mitigate the effects.
What are your work priorities right now?
There are three main areas I'm focused on:
- Supporting clients in carrying out climate change risk assessments to facilitate their understanding of the impacts of climate change on their underwriting portfolio, investments and operations;
- Developing and implementing quantitative scenario analysis methods; and,
- Greenhouse gas quantification, including emissions associated with investment portfolios (financed emissions) and target setting.
Much of the work I undertake with my clients is to support them in TCFD-related reporting. This is increasingly being demanded by investors and regulators, and I think that's a positive step to increase awareness of climate change and its impacts.
Tell me one step the insurance industry needs to take, to improve its response to climate change?
Right now insurers are focused on understanding the impacts of both the transition and physical risks of climate change on their businesses. Leading companies are also looking at financed emissions and what it might require to implement reductions in them. Insurers additionally need to begin decarbonising their insurance portfolios - setting qualitative underwriting rules around high-carbon industries is a good start.
"Until firms quantify the emissions associated with their policies in a systematic way it will be difficult to assess the impact in terms of greenhouse gases generated"
However, until firms quantify the emissions associated with their policies in a systematic way it will be difficult to assess the impact in terms of greenhouse gases generated. There are a number of initiatives which are moving the industry in the right direction on this topic, including the UN-convened Net-Zero Insurance Alliance.
Are you optimistic or pessimistic we can avoid the worst effects of climate change?
I find that the more I learn about climate change the bigger the challenge to avoid the worst impacts of a heating planet appears to be! According to the IPCC, limiting global warming to 1.5°C would require human caused emissions of carbon dioxide to fall by 45% by 2030 relative to 2010 levels, but the recent study by the UN of nationally determined contributions indicated that these emissions were likely to rise by 16.3%.
So I do sometimes find it difficult not to take a negative view. However, the amount of attention and energy now being devoted to the subject makes me optimistic that we are moving in the right direction, although we clearly need to increase the pace of change.
What are you doing personally to reduce your climate impact?
I do my best to minimise my purchase of single use plastics, and I take some solace in the fact I've never owned a car.
Living and working in the US pre-pandemic, as consultants we were used to flying frequently to meet with clients. PwC has set goals around reducing its business travel emissions, and in line with that I try to challenge my colleagues to consider if meetings can be held virtually - face to face interactions are important but it's good to consider their necessity before getting on a plane.