Doing Well by Doing Good

A conversation with Sun Life’s chief sustainability officer Alanna Boyd Interview by Emily Hsu


Alanna Boyd

Sustainability—the evermore present trend confronting corporate Canada—has taken center stage in the way organizations are reshaping their businesses to address societal challenges. The Actuary Canada spoke with Alanna Boyd, senior vice president at Sun Life and its first chief sustainability officer, about some of the sustainability trends happening in Canada and how actuaries will play an increasingly significant role in this space.

What does it mean to be committed to sustainability?

When you hear the word “sustainability,” a lot of people think it is all about “going green.” And that is certainly a key part. However, in the context of business, sustainability is about operating in a way that takes into account any impact (positive or negative) that your organization has on the environment, community and society as a whole. I like to think of it as doing well by doing good.

Being committed to sustainability means you need to spend every opportunity embedding it into your business, from operations, strategy and investments to services, talent and philanthropy. It is everything from considering environmental, social and governance (ESG) in acquisitions and investments to using the products and services a company creates to intentionally address a societal need. It can also be everything from achieving a net-zero future to embedding diversity, equity and inclusion (DE&I) into all levels of the organization. It is about being intentional, consistent and proactive in thinking about sustainability in daily decisions.

Here is a great example. In 2022, Diabetes Canada came out with data that showed 11.7 million Canadians live with diabetes (types 1 and 2) or prediabetes (a condition that, if unmanaged, can develop into type 2 diabetes). This trend is on the rise. Many Canadians with diabetes end up without life insurance coverage.

Our teams at Sun Life approached this societal issue as an opportunity to make an impact. They designed a specialized product, now in the pilot stage, called Diabetes Signature Solutions, which aims to offer affordable coverage while actively encouraging policyholders to improve their health. As you can imagine, actuaries had a lot to do with that product. This example shows how you can drive business value while positively affecting society—and that is what sustainability in business is about.

What are some of the megatrends affecting sustainability?

Sustainability is a complex, dynamic and fast-moving field. Three trends are dominating headlines right now.

1. Accelerated Climate Action

Climate change is one of the defining issues of our time and will shape our global economy and influence investment landscapes, asset valuations, risk modeling and so much more. As global greenhouse gas emissions continue to rise, humanity’s ability to achieve the global goals of the Paris Agreement and limit warming temperatures to 1.5°C is at significant risk. This is putting enormous pressure across all sectors to accelerate climate action, take advantage of opportunities and manage the climate risks that the transition to net zero presents.

McKinsey estimates that the cumulative capital spending on physical assets for the net-zero transition would need to increase by $3.5 trillion annually through 2050. That is a 60% increase in what we spend globally today. Businesses are faced with opportunities associated with huge capital reallocation while managing the significant risks that a warmer world presents on current operating models. Collectively, we are implementing net-zero commitments while considering what resilience looks like under different warming scenarios. Actuaries bring a unique set of skills that will help companies understand these opportunities and risks.

2. Increasing Regulatory and Public Scrutiny

Regulators and policymakers across the globe are consulting on and implementing sustainability-related policies and requirements. Preparation to ensure compliance and address complex and often conflicting sets of legal and disclosure requirements—while identifying risk areas, controls and best practices—is crucial. This requires a whole new set of skills across many of our existing business teams.

As regulations continue to evolve, the pressure to make or disclose commitments around climate change and ESG practices is increasing. Predictably, an increase in allegations of greenwashing and impact washing across sustainability topics—including disclosures, climate claims, social issues, supply chain, human capital and DEI— have ensued. In Canada, the Competition Bureau has turned its attention to greenwashing and is taking an active role in addressing this issue. As the risk of taking certain positions comes into focus, sustainability governance and controls on disclosures and commitments have become increasingly important.

3. Race for Talent

We have heard about the “talent wars” for a few years now. Brought on by a wave of retirements, workforce exits and COVID-19, the global workforce has changed noticeably. In my area, there is a growing demand for specialized talent to help companies drive their sustainability priorities, but sustainability is a relatively new discipline for corporations. Exploring how climate risk affects businesses through an actuarial lens is something we are just starting to hear about, but the demand for that unique skill set is upon us. The fact is, you are not going to find a lot of people who fit this new sustainability—and especially climate—role perfectly. It makes for an incredibly competitive landscape when it comes to finding and attracting talent.

Increasingly, we are seeing a workforce proactively seek out companies that align with their values. At Sun Life, our internal data shows that 90% of our new hires share Sun Life’s mission and values, and that it is either the main reason or a contributing factor as to why they joined us. This is another example of how sustainability-driven companies can drive real business value.

You talked about the race to net zero. How is the growing focus on climate expected to affect the life insurance business?

Climate change affects the life and health of people worldwide. Simply put, for life insurers, it puts what we do and who we serve at risk. The consequences of extreme weather events and the dramatic shift toward higher temperatures have increased over the last decade with little end in sight. Lower air quality from pollutants, warming temperatures and wildfires could have long-term implications on health. Increasingly, the dialogue around climate change anxiety and the lasting effects on the mental well-being of those who experience climate disasters is growing.

The industry currently is challenged by both obtaining and assessing available data. How climate change will affect underwriting, premium costs, benefit payouts, and morbidity and mortality remains a key question. During the peak of the COVID-19 pandemic, we witnessed the complexities of attributing “cause of death” to COVID-19. Inadequate testing, inconsistent data collection and reporting, and a patchwork of regulatory health practices made it challenging to understand the real impact of the virus. Imagine, now, that same system being tasked with reporting on the effects of climate change on health. It is a real challenge, and as an industry, we are working together alongside governments, regulators and think tanks to tackle this issue.

How can actuaries take advantage of the growing demand for sustainability?

In the most basic terms, actuaries are asked to look into the future and predict the likelihood and costs associated with future risk. The rapidly evolving and dynamic sustainability environment will present an interesting challenge for the profession. As I said earlier, companies are on the lookout for talent who can help deliver their sustainability priorities.

When it comes to having a positive societal impact, actuaries can play a key role in helping design insurance products that prioritize positive societal outcomes or target underserved populations.

In terms of climate change, actuaries need to be educated on climate risk and then leverage their actuarial skills and training to help companies understand and manage this risk. It is going to be a huge undertaking across the insurance industry and, increasingly, regulations will evolve to demand a more sophisticated understanding of climate risk on companies across sectors.

The ability of actuaries to upskill and broaden their understanding of sustainability will be essential for global organizations today and into the future.

What is next for the insurance industry and sustainability?

I am excited about the future of sustainability and the influence it will have on how businesses operate. I think companies are helping redefine the possible, and I believe consumers are going to continue to increase their expectations around corporations and sustainability commitments.

Learn more

Read Sun Life’s Sustainability Plan.

When it comes down to it, embedding sustainability is a complex issue, and it is going to be people—often those who are driven by the opportunity to have a real impact—at the forefront of solving these societal and climate challenges. If you are interested in this space and want to do your part in helping your organization drive real-world impact and fight climate change, I encourage you to find opportunities to add climate change or sustainability training to your tool kit and learn more about how actuaries will be important partners today and into the future.

Alanna Boyd is senior vice president, chief sustainability officer, at Sun Life, and was recently recognized with a Globe and Mail Report on Business 2023 Best Executive Award. You can follow her on LinkedIn.
Emily Hsu, FSA, FCIA, CERA, is director, professional insights, at Sun Life. She is also a contributing editor for The Actuary Canada.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

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