You have the opportunity to shape these disclosures as they become market standards. We encourage the private sector to: 1. Contribute to the review of the current TCFD framework that Mary Schapiro is leading. Tell her what’s important, what’s less so, what should be refined to ensure disclosures are decision-useful, comparable, consistent and efficient before they become mandatory. 2. Commit to reporting a full set of TCFD disclosures in the 2021/22 reporting round: The selfhelp community for TCFD is considerable. Through multi-sector TCFD summits and more focused TCFD industry preparer forums, companies can continue to share knowledge to improve disclosure practices.8 Full disclosure encompasses scope 1, 2 and 3 emissions and includes a strategy for managing these down, embedded through appropriate board-level governance structures and linking outcomes to compensation.9 3. Demand TCFD-consistent disclosures from your borrowers and the portfolio companies. In the process, you will unleash tremendous value and be better able to manage embedded risks. For COP 26 we will work to develop pathways, in consultation with international standard setters - such as the FSB, IFRS and IOSCO – and national authorities to determine the best approaches to making climate disclosure mandatory. Risk management: ensuring firms and investors can measure and manage the risks in the transition to a net zero world. The second step on the path to a sustainable financial system is better climate risk management. Managing climate-related financial risks requires disclosure to go beyond the static (a company’s carbon footprint today) to the strategic (their plans to manage down their emissions).

We will also consider how to best channel the expertise, experience and ingenuity of the financial sector to develop innovative approaches to meet the biggest challenges in the transition to net zero. This will mean: 1. Understanding which new financial products, such as transition bonds and transition indices, can make a real difference to climate finance and support efforts to scale them up rapidly as needed. 2. Promoting the most promising climate innovations in insurance sector, such as contingent liability structures for climate policy risk and micro- insurance in emerging economies, drawing on the leadership of organisations such as the CCRI and IDF; and 3. Evaluating the prospects for private markets in carbon offsets and nature-based solutions, drawing on the sector’s expertise in creating and running efficient and transparent market infrastructure. Conclusion With sustainable finance moving from CSR to the C suite, the UK COP 26 Presidency in partnership with Italy will help build the foundations of a system that will be able to seize the opportunities of transitioning to net zero. 7  All speeches are available online at www.bankofengland.co.uk/news/speeches  7  The UK has been at the forefront of innovation for centuries. It was the birthplace of the industrial revolution that brought unimagined progress. The City financed the steam engines, the railroads and the new energy sources that powered this transformation. And now – on the cusp of the sustainable revolution – the world once again needs your innovation, resources and leadership.