We also developed carbon intensity metrics for the equities portfolio, which we extended to cover corporate bonds last year. We then set out the portfolio actions we will take to reduce the carbon intensity of our equities portfolio by up to 50% by FY2030. These included: defining the stewardship principles for our external fund managers to engage their portfolio companies on climate-related risk issues; launching a climate transition programme to mitigate the impact of climate transition risk; and excluding investments in companies that derive more than 10% of their revenues from thermal coal mining and oil sands activities. Let me provide an update on our climate scenario analysis, climate portfolio actions, and stewardship efforts. We have examined the possible impact of climate change on our long-term investment returns under four scenarios. The best-case scenario is a Paris-aligned orderly transition where global warming is capped at 1.5-degrees Celsius. Early and ambitious policy measures drive the adoption of low carbon technologies and result in quick reduction in global greenhouse gas emissions. The worst-case scenario is a failed transition with temperatures rising to 4-degrees Emissions continue to rise and the world is faced with catastrophic and irreversible climate change. A first middle scenario is a delayed disorderly transition that keeps temperature rise within 2-degrees. But this is at the cost of disruptive policy actions in response to an alarming spike in extreme weather events around the globe happening at the same time. A second middle scenario is a too-little-too-late transition that results in a temperature rise close to 2.6-degrees.

Jean-Pierre Roth: As the financial crisis recedes, what are the lessons for central bank efforts in the future? Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank, at the Centre International d’Etudes Monétaires et Bancaires, Geneva, 24 November 2009. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  The financial crisis of the last two years has caused people to re-examine a number of generally accepted ideas. Corrective measures are being undertaken, particularly in the area of banking regulation. For central banks, the most delicate issue will be how to contribute to macrofinancial stability without jeopardising their objective of price stability and, in turn, compromising their own credibility. As regards banking supervision, close cooperation between central banks and banking supervisory authorities is essential. The temptation to concentrate forces is strong. In Switzerland, placing centralised oversight responsibility with the Swiss National Bank would risk weakening the SNB’s independence from the political sphere. With respect to systemically important financial institutions, everything possible must be done to limit the likelihood and the risks of further problems. Major efforts are underway in this regard at the Financial Stability Board. To ensure that central banks have the necessary means to act in a crisis, a liberal legal framework and a safety cushion in the form of equity are needed. The SNB is in a favourable position in this respect. BIS Review 152/2009  1