Ignazio Visco: Awards ceremony for the G20 TechSprint on green
and sustainable finance
Welcome remarks Mr Ignazio Visco, Governor of the Bank of Italy, at the awards ceremony for
the G20 TechSprint on green and sustainable finance, organized by the Bank of Italy and the
Bank for International Settlements, Milan, 25 October 2021.
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I am delighted to welcome you to this awards ceremony for the second G20 TechSprint on
Green and Sustainable Finance organized by the Bank of Italy and the Bank for International
Settlements. I would like to thank Benoit Coeuré, Andrew McCormack and the whole team from
the Singapore BIS Innovation Hub for their invaluable cooperation in all the steps of our
TechSprint.
TechSprints are technological competitions designed to spur innovation, collaboration and
creative solutions to daunting problems. Our G20 TechSprint had a very ambitious goal. It was
designed to help financial markets in sharpening their assessment and selection tools for
channeling funds towards green and sustainable finance, leveraging on the latest technologies.
Fintech and innovators were summoned to put forward their best solutions.
I am very pleased that the improvement in the public health situation, following remarkable
progress in the vaccination campaign, allows me to be here in Milan to acknowledge the
achievements of the 21 brilliant finalist teams who have offered valuable technological
contributions in a very special area. Indeed, finding ways to foster appropriate green and
sustainable finance to invest in the crucial fight against climate change has been one of the key
priorities of the Italian Presidency of the G20 this year.
The urgency of acting to stop climate change and of mitigating its consequences is plain to see.
The increase in the intensity and frequency of extreme weather events has obvious, and major,
social, as well as economic, consequences. Central banks and supervisory authorities,
international institutions and market participants have therefore been paying significant and
increasing attention in recent years to developing a better understanding of the implications of
climate change for the financial sector and financial stability. In fact, climate change-related
financial risks pose both micro- and macroprudential concerns, but analysis and research are
still at an early stage.
Although there is broad consensus within the scientific community on the trends and causes of
climate change, the timing and magnitude of future climate outcomes remain uncertain. This
range of possible future physical outcomes arising from climate change is crucial to
understanding "climate risks" (or better again, "climate uncertainties"). Climate and econometric
models that integrate different climate scenarios and their potential economic impacts to assess
these risks are being developed and refined, but measuring the economic costs of climate
change (and of climate policies) is a work in progress. We can assess the immediate costs of
more frequent and intense natural disasters, but most of the potential costs lie beyond the typical
horizon of economic and financial analyses.
Climate change risks can unfold through the economy, especially if the transition to net zero
emissions proves poorly designed or hard to coordinate globally, with ensuing disruptions to
international trade. Financial stability concerns arise when asset prices adjust too quickly,
reflecting unforeseeable realisations of transition or physical risks. However, it is unclear how
much today's asset prices reflect the extent of the policy actions required to limit global warming
to 2 ̊C or their impact on the economy and the financial system.
A major challenge for financial investors is then how to align the incentives to channel
entrepreneurship towards productive and beneficial activities such as technological innovation
and, at the same time, prevent unproductive destructive activities that damage the environment.
This is why we believe that interacting with start-ups and fintech in such endeavour could be very
useful, and why we are today in Milan where our financial innovation centre, the Bank of Italy's
Milano Hub, has recently started to operate.
Indeed, we are convinced that this interaction may bear considerable fruits in several areas.
Currently, we are looking for contributions in the field of artificial intelligence in improving the
provision of banking, financial and payment services to businesses, households and the public
administration. The proposals should focus on financial inclusion, sound consumer protection,
and data security.
To conclude, this TechSprint seems to me a well-designed contribution to foster innovation in an
area, such as the fight against climate change, where both data and methodological gaps
prevent accurate and sound data-driven solutions. It attempts to spur the public and private
sector to identify profitable cooperative solutions aimed at achieving sustainable development
goals. Winners should go well beyond the prizes, towards the pursuit of reliable and sound
solutions for sustaining the development of a solid green finance market. And we encourage all
finalists to continue to refine their proposals, because financial authorities and market players
avidly await new technological solutions to bridge the present informational gaps.
If fostering interaction and competition among companies is important in normal times, it is even
more so in times when problems are more urgent, when decision-making processes need timely
and high-quality studies, which can benefit from broader cross-country perspectives. These
international awards are a way of encouraging both competition and cooperation. The aim is to
not only recognise the extra talent of the winning teams, but also to get to know that of the other
participants. This is why we arranged this awards ceremony. Therefore, I would like to salute
also those teams who have not won any prize and reassure them that there will be many more
opportunities in future months.
As a final word, let me take this wonderful opportunity to thank our colleagues and organizers
from the BIS and the Bank of Italy for their ceaseless patience and hard work in taking up an
exceptional organizational challenge. Thank you all.