Also, according to this exercise, the Spanish banking sector could absorb the impact of the increase in costs of productive sectors that would be generated by an ambitious climate transition policy, without significant impairment of its solvency. At the same time, as I have already said, we are working to measure the costs of failing to act on climate change. In this respect, certain episodes have already been observed that enable this cost to be approximated to some extent. One of these episodes – the degradation of the Mar Menor – has been analysed by our economists.18 Using econometric exercises, they estimated that the ecological deterioration has already had a significant negative impact on the value of housing in the areas affected; in cumulative terms, house prices have risen by approximately 40% less than in comparable areas that have not suffered a similar impact. For the banking sector, the loss of value of residential housing obviously entails a lower value of the available collateral and increased risk in the event of impairment of the loan portfolio, and especially of mortgage loans. More generally, this exercise shows that the materialisation of climate change may have a significant impact on the economy as a whole. Conclusions To conclude. I have referred today to various initiatives that show that we financial regulators and supervisors, within our mandates to guarantee financial stability, can (and should) actively contribute to international action to combat climate change.

08.04.2022  Sustainability and climate change: measurement and management challenges* “Private capital: investment with an impact” / Annual congress of the Asociación Española de Capital, Crecimiento e Inversión (ASCRI) Pablo Hernández de Cos Governor *iEnglish translation from the original in Spanish. Good morning. I should like to begin by thanking the Asociación Española de Capital, Crecimiento e Inversión (ASCRI) for inviting me to participate in their annual congress. This congress is today going to address environmental sustainability, one of the main challenges facing our society, as we have very recently been reminded by the Intergovernmental Panel on Climate Change (IPCC). As you know, the IPCC has just published the third part of its Sixth Assessment Report, which stresses that we are still in time to limit the temperature increase by the end of the century to 1.5ºC, although immediate and decisive measures are required.1 In particular, the transition to a more sustainable economy (one that generates lower emissions) requires a very significant volume of economic resources. In the European Union alone, according to European Commission estimates,2 complying with the emissions reduction target set for 2030 requires investing approximately an extra € billion per year over the current decade. The financial sector clearly needs to be involved in mobilising this enormous volume of resources. Given our mandate to preserve financial stability, the contribution of supervisors and financial regulators to the achievement of these targets involves ensuring that intermediaries identify, measure, manage and disclose the financial risks associated with climate change.