To conclude, a financial market in the transition to a 1.5 degree world is being built, but we need to move much faster. Now it’s time for a step change to bring the reporting, risk management and return optimisation of sustainable finance into everyday mainstream, financial decision making. Ultimately, the speed with which the new sustainable financial system develops will be decided by the ambitions of your climate policies. If more countries, like the UK, turn their Paris commitments into legislated objectives and concrete actions, the financial system will amplify the impact of their efforts by pulling forward sustainable investments and shutting down unsustainable activities.9 It is within our grasp to create a virtuous cycle of innovation and investment for the net zero world that our citizens are demanding and that future generations deserve. Let’s seize it  7  Nagy, Z, Kassam, A, and Lee, L-E,. (June 2015). Can ESG add alpha? Available: https://www.msci.com/documents/10199/4a05d4d3- b424-40e5ab01-adf68e99a169. 8 Such indices highlight those who have shown the highest rate of improvement in lowering carbon intensity. As described in ‘Financing the Low Carbon Future’ (CFLI, September 2019). Available at: https://data.bloomberglp.com/company/sites/55/2019/09/Financing-the-Low-CarbonFuture_CFLI-Full-Report_September-2019.pdf 9 The policy frameworks with the greatest impact will be: time consistent; transparent; target-based; and committed, through treaties, nationally determined contributions (NDCs), domestic legislation and consensus. The COP 21 Agreement is catalysing national policies to limit the global rise in temperatures to two degrees.

Insurers can be highly influential in bringing the realities of climate change into mainstream financial decision-making. To do so, we need a step change in three areas: reporting, risk management and return. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  Reporting Better corporate disclosure of climate-related financial risks is essential and the next few years will be decisive. On the demand side, current supporters of the Task Force on Climate-related Financial Disclosures (TCFD) are responsible for assets totalling $ trillion and include the world’s globally systemic banks, top 10 global asset managers, leading pension funds and insurers. Not surprisingly, supply is responding. Users of capital are providing increasingly sophisticated decisionuseful information. Four-fifths of the top 1,100 G20 companies surveyed in a recent TCFD report are now disclosing climate-related financial risks in line with the recommendations. Now is the time to get involved. The IAIS and UN Sustainable Insurance Forum are monitoring developments in disclosures closely: with a systematic survey of TCFD adoption by insurance firms and they will be publishing a paper on this early next year, including recommendations for any changes. The Climate Change Research Initiative (CCRI) will do the same. The next step is to make these disclosures mandatory. The UK and EU have already signalled their intents. But it’s time for every country to get involved because the world won’t get to net zero if the financial sector doesn’t know how our companies are responding. To watch we must be able to see.