s work on climate change in 2016, at a time when there was only a handful of people at a handful of central banks working on climate - related issues. but since then the scope and depth of our work and that of other central banks has expanded significantly. we are working domestically and internationally with key stakeholders including government, industry, investors, regulators, and climate scientists to further this critical agenda. bank of england annual report 2020 all speeches are available online at www. bankofengland. co. uk / news / speeches climate action at the micro - level : disclosure and risk management so what are we asking financial firms to do? put simply, they need to make financial decisions that take the risks and opportunities from climate change into account. the first step in achieving that is to have the right information. that is why the bank has been making the case for some time for consistent, comparable, and comprehensive climate disclosures. the financial stability board ’ s ( fsb ) task force on climate - related financial disclosures ( tcfd ) provides the go - to framework for companies to disclose key climate - related information. 9 this initiative has significant backing, with over a thousand companies showing their support. 10 but support alone is not enough, we need action. and the quantity and quality of climate disclosures is not yet good enough. climate change is a risk we see looking forwards not backwards. companies with the exact same current carbon footprint today could have very different strategies for the future – one might have a clear path to net - zero, another could be gambling on new technology or policy inaction, and a third might just not have thought about it yet. so to be decision - useful, disclosure has to move from the static to the strategic. to be forward looking. using scenario analysis to help us better understand the impact of different climate pathways. that naturally raises the question as to whether disclosure should be mandatory. given the scale of the change required, we think that does need to happen, and soon. and so we, together with other regulators, are exploring a possible pathway to mandatory through the government - led taskforce on climate disclosure. 11 but you do not need to wait to be forced to disclose. you can choose to act now. to that end, and because we expect as much from ourselves as we do of the firms we regulate, we at the bank recently published our very own first tcfd - aligned climate disclosure report. 12 task force on climate - related financial disclosure

. as with disclosure and risk management, the stress test will not be a straightforward task. we will test risks under not one, but three scenarios. the first where no additional policy action is taken and where, by continuing on our current emissions path, warming exceeds 3 degrees above pre - industrial levels. the second where policy action starts now enabling us to achieve net - zero in an orderly fashion by 2050. and the third where policy is implemented late, leading to a disorderly transition to net - zero. cfrf guide 2020 the financial policy committee ’ s july 2019 financial stability report set out that there would be a climate change related biennial exploratory scenario ( bes ) in 2021. a discussion paper on the climate bes was published in december 2019. autorite de controle prudentiel et de resolution ( acpr ) publication ‘ climate change : which risks for banks and insurers ’, 04 / 10 / 19 australian prudential regulation authority ( apra ) letter to firms on ‘ understanding and managing the financial risks of climate change ’, 24 / 02 / 20 reply to parliamentary question on including climate change - related risk in the monetary authority of singapore ’ s ( mas ) annual industry - wide stress test, 04 / 02 / 20 speech by luis de guindos, vice - president of the ecb, at the european savings and retail banking group conference, ‘ creating sustainable financial structures by putting citizens first ’, 21 / 11 / 19 all speeches are available online at www. bankofengland. co. uk / news / speeches the scenarios will look ahead decades, not the next three to five years. they require firms to understand how their real economy customers are exposed to these risks and the actions they would take to manage the risks. that will in turn prompt conversations about stewardship to net - zero and what opportunities an orderly transition might bring. at the heart of this is scenario analysis. most firms have significant gaps in their climate scenario analysis capabilities. that is not surprising given it is a relatively new field. but to assist firms and policymakers in this challenge, we are working with climate scientists and our partners through the central banks and supervisors network for greening the financial system ( ngfs ), and last week we published a number of reference scenarios. 22 these reference scenarios provide for the first time a harmonised set of high - level climate scenarios, available in a publicly accessible database, in which both transition and physical climate change impacts are included