Transition towards lower-carbon economy, through transformation of the current modes of production and consumption may come at a cost. Some have argued that on a macro level, this could lead to a positive ‘green growth’ effect. Climate policies associated with structural reforms, including mandatory climate-related financial disclosure could increase investment and benefit the global economy in the medium term. Investment in research and energy efficiency could have a positive impact on innovation and knowledge spillovers, while creating opportunities for economic growth, job creation, and financial innovation. An example of a new business opportunity that could arise is the upcycle of waste materials into new products. Nevertheless, as in many policy shifts of this nature, there will be winners and losers and public policy must strive to strike an acceptable balance to all the communities and sectors that have been adversely impacted. Ladies and gentlemen, To conclude, the journey towards sustainability requires careful and well-informed assessments, policy planning, coordination, execution and communication. Long-term planning is crucial to remain focused on the end goal. With a long lag between present actions and the impacts, as well as the prominence and visibility of the short-term outcomes, perseverance is key. We may have to overcome “sustainability fatigue” that may arise in the the efforts and resources that must be invested in pursuing sustainability. Failing to do so would lead us to fall into a pattern of disregard and laissez-faire, thus derailing us from achieving sustainability.

For example, reduction in fossil fuel use may lead to significant trade-offs with growth and poverty reduction objectives, particularly in the short to medium-term. Targetting sustainable growth and development amidst capacity and funding constraints can thus present significant challenges for political leadership, economic priorities and social outcomes. In this context, given the higher cost of transition, the country may need a longer time to transition towards more sustainable growth policies. This may however result in delayed actions which would heighten physical risks. For the Bank, given the importance of financial inclusion, this could also involve placing different priorities on the impact of climate change in different community segments and to tailor interventions that are appropriate and relevant to provide effective financial protection, particularly to vulnerable segments. A corollary of our pursuit towards a more sustainable, greener economy, would also be that some segments of the economy may face declining demand, big shifts in asset values or higher costs of doing business. “Brown assets” or non-sustainable assets such as fossil fuel reserves for example would potentially become “stranded assets”, which has implications on the value of investments in energy companies, particularly those dealing with oil, gas and coal. Globally, it is 4/5  BIS central bankers' speeches  estimated that more than 80% of the known coal deposits, 50% of gas, and one third of the oil reserves cannot be used for energy production if global warming is to be kept below 2°C .