Nature loss brings catastrophic risks – ARU report
Food security is under threat, which could lead to economic and social instability
A new report from Anglia Ruskin University (ARU) and the Institute and Faculty of Actuaries (IFoA) warns that biodiversity loss, alongside climate shocks and geopolitical conflict, is disrupting our food system, risking catastrophic impacts for the financial system and for society as a whole.
Recent events in the Gulf region show a fragile food system being further threatened by disruption to fertiliser supply chains passing through the Strait of Hormuz. There is a real risk of further food price shocks which, alongside sharp rises in energy costs, will drive up the cost of living.
‘Planetary Solvency: Tipping into the wild unknown’, the joint Anglia Ruskin University (ARU) and IFoA authored report, explains that chronic pressures such as soil degradation and water scarcity are already leading to lower crop yields, pushing up food prices and reducing availability.
Acute shocks including trade disruption, extreme weather events and ecological collapse add further stresses, resulting in higher and more volatile food prices.
Long-term food security is at risk as key ecosystems approach irreversible tipping points. Large-scale deforestation, particularly in the Amazon rainforest, threaten rainfall patterns and global carbon cycles, which are essential for stable crop yields.
The decline in pollinators, which underpin around three quarters of global crop production, could decrease crop yields and increase food prices. And pressures on marine ecosystems from overfishing, pollution and climate change are pushing marine systems past critical thresholds, leading to a collapse in fish populations.
The report warns that urgent intervention is needed and highlights actions for policymakers, regulators and those working in the financial sector, to integrate nature into decision making in order to safeguard the food system.
The actions include:
- Urgent investment in measures to support sustainable land use, protect pollinators and strengthen supply-chain resilience. Prevention is cheaper than crisis response and reduces the likelihood of acute shocks such as crop failures and recurrent double digit food price inflation.
- Policymakers and regulators recognising nature as the critical foundation of our society and economy, using integrated climate-nature scenarios to understand the interconnection between biodiversity and climate.
- Actuaries and the financial sector recognising food system fragility is a systemic financial risk, with impacts far greater than the GDP contribution of agriculture.
“The recent National Security Assessment on Global Ecosystems from the UK Government has shown that the potential collapse of nature is a realistic possibility. Our current economy is set up to deliver efficiency, profit and thereby a just-in-time system that both drives this threat and provides little to no resilience against it.
“We need radical new policy and direction to tackle these emerging risks and, with this report, the actuarial profession is signalling its desire to contribute its unique expertise to shaping our response. In the report, we highlight key risks from food through pandemics and outline a set of recommendations including the need to move away from waiting to measure and quantify everything before we take the urgent action that is needed.”
Professor Aled Jones, lead author and the Director of the Global Sustainability Institute at Anglia Ruskin University (ARU)
“Events in the Gulf region pose a significantly greater risk to global food security than in 2022, when the combination of a Ukraine energy crisis and extreme weather events impacted harvests, driving up prices. Now the climate is warmer, and the Strait of Hormuz is the conduit for around 30% of global fertiliser. If this is not applied during key planting seasons, it cannot be replaced later.
“The impact of energy prices may then be further compounded by global food shortages, leading to the potential for structurally high inflation. This is all hitting a food system already under strain from biodiversity loss and climate impacts, and a society already struggling from cost of living pressures.
“We must incorporate biodiversity and climate change into financial decision making, to align our financial portfolios with planetary boundaries. This is how we steer society back within safe ecological limits and secure long-term Planetary Solvency.”
Sandy Trust FIA C.Act, lead author of the Institute and Faculty of Actuaries’ 2025 Planetary Solvency report“Nature is not a luxury; it is our most fundamental form of critical infrastructure. Yet, as this vital report on Planetary Solvency makes clear, we are currently managing our global natural assets with a level of negligence that would be unthinkable in any other sector of the economy. We are treating a finite, interconnected ledger of biological wealth as an infinite extraction fund, and the maths simply no longer adds up. To the finance sector, the message is clear: nature risk is financial risk.”
Emma Howard Boyd CBE, Chair of ClientEarth’s Group Board
“This report makes it clear that nature loss is not only an environmental crisis but a serious risk to economic stability and societal resilience due to the rise in food insecurity. Actuaries have a critical role in identifying, measuring and managing these systemic risks, ensuring they are not overlooked in financial and policy decisions. By integrating nature into our models and scenarios, we can help steer institutions toward choices that protect food security.”
Paul Sweeting FIA C.Act, President of the Institute and Faculty of Actuaries