Climate change is one of the most pressing challenges facing the world today. In recent years, we have witnessed increasing frequency and intensity of extreme weather events such as flooding and wildfires. I’m sure you still remember the catastrophic damages caused by super typhoon Mangkhut just three years ago. 22. In order to tackle the climate challenge, countries agreed, under the Paris Agreement, to take actions to cut greenhouse gas emission and eventually achieve carbon neutrality within this century. One of the most important steps is to make financial flows consistent with the pathway of lowering greenhouse gas emission. 23. To this end, we are now finalising our supervisory requirements on climate risk management. The requirements will set a benchmark to help banks formulate their plans to upgrade their risk management capability. Under the Cross-Agency Steering Group, we are also working in the areas of taxonomy and disclosure to increase the consistency of green definitions and the availability of ESG information to reduce the risk of “green washing”. 24. As the core part of the financial system, banks do have a key role to play in the transition into a low-carbon economy by channelling more financing to greener and more sustainable activities. However, if our path to green finance leads to a rapid off-ramping of “not-so-green” exposures or corporates without proper regard to transition needs, this will result in a disruptive transition. And the interim financial exclusion impact on some of the traditional industries could have profound implications for society. 25.

With increasing dependence on information technology, institutions are faced with numerous threats such as distributed denial of service, malicious hacking and virus attacks which affect vital services provided to customers. Barely a week ago, the vulnerability of major organisations to such attacks was laid bare when a massive “ransomware” virus hit up to 300,000 computers across 150 countries including Malaysia. Judging from its name, the “WannaCry” virus clearly achieved its aim as users found themselves locked out from their computers and their data held at ransom. A host of organisations were left reeling in the wake of these cyber extortion attacks, including the Russian interior ministry, delivery and shipping giant FedEx and the UK’s National Health Service where some hospitals were unable to perform operations, putting patients’ lives at stake. There is also the danger of phishing and stealing of confidential customer data which could destroy the trust placed on your company. Yahoo!, one of the internet’s top sites with a billion monthly users, suffered a massive security breach in 2014 when hackers stole the personal details of at least one billion user accounts. The implications are far-reaching as a stolen digital identity makes us vulnerable to manipulation and undermines the safety of, not just ourselves, but also the ones we love. Bank accounts, social media profiles and even medical information can be abused to put us and our family in harm’s way. In the months following the hacking revelations, more than five billion dollars was wiped off Yahoo’s market capitalisation.