The key mandates of the Joint Committee are to: Build capacity through the sharing of knowledge, expertise and best practices in assessing and managing climate-related risk; Identify issues, challenges and priorities facing the financial sector in managing the transition towards a low carbon economy; and Facilitate collaboration between stakeholders in advancing coordinated solutions to address arising challenges and issues. Beyond resilience As we intensify our efforts to increase climate resilience, let us not forget that climate action begins with each of us. For the Bank, this has meant making changes to our own internal operations to reduce our carbon footprint. For several years now, we have been watering our grounds using rainwater harvested by our roofing systems. We have also actively reduced our 4/5  BIS central bankers' speeches  carbon footprint in our currency management operations. We print fewer brand new notes and use durable polymer banknotes to prolong their lifespan in circulation. We also employ coprocessing, where shredded old notes are converted into productive energy – this has saved 440 tons of CO2 emissions since 2016. The Bank has also embarked on a digitalisation strategy that will significantly reduce internal usage of paper. We have also progressively moved to incorporate wider sustainability considerations in our investment decisions. Within the financial sector, the leadership shown by the Islamic finance industry in adopting value-based intermediation is a positive step towards sharpening the focus of finance on creating a positive impact to the economy, people and the environment.

14  Nyberg (2010) provides more discussion of macroprudential regulation and regulation reform. BIS Review 16/2010  7  significant social costs. I find it helpful to conceptually distinguish financial-stability policy from monetary policy. Different economic policies and policy areas, such as fiscal policy, labor market policy, structural policies to improve competition, etc., can be distinguished according to their objectives, the policy instruments that are suitable for achieving the objectives, and the authority or authorities controlling the instruments and responsible for achieving the objectives. Monetary policy in the form of flexible inflation targeting has the objective of stabilizing both inflation around the inflation target and resource utilization around a normal level. The suitable instruments are under normal circumstances the policy rate and communication, including possibly a published policy-rate path and a forecast of inflation and the real economy. In times of crisis, as we have seen during the current crisis, other more unconventional instruments can be used, such as fixed-rate lending at longer maturities, asset purchases and foreign-exchange intervention to prevent currency appreciation. The authority responsible for monetary policy is typically the central bank. Financial-stability policy has the objective of maintaining or promoting financial stability. The available instruments are under normal circumstances supervision, regulation and financialstability reports with analyses and leading indicators that may provide early warnings of stability threats. In times of crisis, there are instruments such as lending of last resort, variable-rate lending at longer maturities, special resolution regimes for financial firms in trouble, government capital injections and so forth.