Speeches  Published Date: 31 May 2022  "Gearing Up for Climate Action - The Road Ahead for the NGFS" - Opening Address by Mr Ravi Menon, Managing Director, Monetary Authority of Singapore, Chair, Network for Greening the Financial System, at the Green Swan Conference 2022 on 31 May 2022 Distinguished guests, ladies and gentlemen. It is an honour and a pleasure to address the Green Swan Conference again. As chair of the Network for Greening the Financial System (NGFS), I would also like to express my gratitude, on behalf of the NGFS, for the opportunity to co-host this conference with the Bank for International Settlements, the European Central Bank, and the People’s Bank of China. From a climate perspective, 2020 to 2030 is the “critical decade”. While everyone is busy making net zero commitments for 2050, let us not forget that the trajectory towards net zero will be substantially determined by 2030. Looking at where we are in our transition journey, the urgency to act is greater than it has ever been. Global greenhouse gas emissions are continuing to rise. In 2021, fossil fuel use and associated carbon emissions rebounded in tandem with the global economic recovery. The demand for coal has risen, not fallen. Fossil fuels continue to account for more than 80% of global primary energy consumption. Renewable energy generation capacity has grown significantly in recent years, but the current pace is not sufficient to reach net zero by 2050. Global temperatures have already risen by 1.1 degrees Celsius above pre-industrial levels.

Undertaking the net zero journey themselves will help central banks and supervisors gain a better understanding of the challenges that financial institutions face when considering climate-related and biodiversity risks in their activities. The NGFS will provide guidance on integrating sustainability considerations across the range of central bank functions. We will follow up on past work relating to sustainable and responsible investment (SRI) principles for central banks1. We will explore suitable metrics for central banks’ disclosure of climate-related and environmental risks, including climate-related governance structures and strategy. We will consider how disclosures for internal operations should be prepared, including a stocktake of how central banks are reducing their environmental and carbon footprint. Let me now move on to NATURE-RELATED RISKS. The NGFS will mainstream the consideration of nature-related financial risks across our work. Nature-related risks and biodiversity loss have garnered significant attention in recent years, and rightly so. Biodiversity supports all life on our planet. But we are eroding this biodiversity at a pace that is damaging the natural ecosystems that provide us food, water, and clean air. This in turn could pose significant risks to economic, financial, and social stability. Failure to address nature-related risks could adversely affect financial institutions and financial system stability. It is imperative that central banks and supervisors consider these risks in fulfilling their mandates. The financial sector should align itself with the transformations that are necessary to deliver a global economy that is positive for nature.