The Banco de España was one of the first to join (in April 2018); it is a Plenary member and plays an active role in all of the workstreams. From my personal experience I can confirm that it is a forum for global  6  Banco de México, Bank of England, Banque de France and Autorité de Contrôle Prudentiel et de Résolution, De Nederlandsche Bank, Deutsche Bundesbank, Finansinspektionen (Sweden), the Monetary Authority of Singapore and the People’s Bank of China. cooperation characterised by continuous learning, drawing on both the experience of the members themselves and the analytical work performed by the different workstreams. Meanwhile, the Eurosystem, the European Central Bank (ECB) and the Banco de España have also been devoting considerably more resources to better understanding the implications of climate change. Notably, this includes: i) ii) iii)  the incorporation of climate-related issues within the ECB’s monetary policy framework. the integration of sustainable and responsible investment practices into own portfolio management. the assessment of climate risks in microprudential supervision. Monetary policy First, with respect to our monetary policy mandate, in 2021 the ECB’s Governing Council presented an action plan to include climate change considerations in its monetary policy strategy. The measures aim to reduce financial risk related to climate change on the Eurosystem’s balance sheet. Moreover, they are designed in accordance with the Eurosystem’s primary objective of maintaining price stability, and the secondary objective of supporting the green transition of the economy in line with the European Union’s climate neutrality objectives.

In this regard, the main challenges facing us all (including the financial sector) when it comes to managing these risks are plain to see. Among others, I would single out a lack of harmonised definitions, ESG data gaps and the ability to measure impacts. With this in mind, I will now address certain key aspects that concern all sectors, and not just the financial sector. Main regulatory initiatives  We authorities, regulators and supervisors have been shaping the regulatory framework for appropriate management of this risk. This is still an ongoing task, but important progress has been made. At the European level, I would highlight the following: first, the EU Taxonomy Regulation,13 which establishes the bases for determining when an investment or economic activity may be considered environmentally sustainable, and lays the groundwork for other European sustainable finance regulations; and second, Directive (EU) 2022/2464 (CSRD)14 on corporate sustainability reporting, published on 14 December 2022, which updates and reinforces the rules on environmental and social reporting by the companies concerned, which are large undertakings (defined as those that meet at least two of the following requisites: balance sheet total over € million, net turnover over € million or average number of employees over 250), along with listed small and mediumsized undertakings.15  13  Regulation (EU) 2020/852  14  https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32022L2464  15  Article 19 bis of Directive 2013/34/EU amended by the CSRD.