– scenario that could bring a sudden recognition of the scale of stranded assets and the economy - wide disruption that a delayed and disorderly transition will bring. 10 our stress test of the world ’ s leading international financial centre will show how major financial firms expect to adjust their business models, as well as the potential collective impact of these responses on the wider economy. the stress test will reveal the financial firms - and by extension the companies - that are preparing for the transition, and it will expose those that have not. the bank ’ s stress test will build on the scenarios being developed by the network for greening the financial system ( ngfs ) – a coalition of over 50 central banks, representing half of the world ’ s emissions. 11 this spring, the ngfs will make these scenarios open source and publicly available, so that any company, in any sector, can use them to assess their strategic resilience. to embed climate - risk management, we ’ re encouraging the financial sector and our international peers to : 1. help shape the climate stress testing framework, which sam woods will describe later this morning, by sharing your expertise and responding to the approach that the bank has put forward in its discussion paper. 12 2. start building capability within your firms. expertise in managing the physical and transition risks associated with climate change will be a core competency for banks and insurers. 3. share knowledge and expertise. climate risk management is a nascent field, and we all need rapidly to improve our skills. that ’ s why the bank and the fca have established the climate financial risk forum ( cfrf ) to publish the sector ’ s collective view of risk management and scenario analysis best practice. 13 4. run stress tests in other jurisdictions. already, 15 other authorities have committed to run stress tests. through the ngfs, the bank of england will share our experience so that others can conduct stress tests for their own financial systems. this will help improve and refine the methodology. 10 https : / / www. bankofengland. co. uk / news / 2019 / december / boe - consults - on - proposals - for - stress - testing - the - financial - stability - implications - of - climate - change. 11 https : / / www. banque - france. fr / en / financial - stability / international - role / network - greening - financial - system. 12 https : / / www. bankofengland. co. uk

most promising investment opportunities in the transition, providers of capital could measure and disclose : 1. the percentage of assets that comply with tcfd disclosure ; 2. the percentage of assets that are net zero - aligned ( “ paris aligned ” ) ; 14 see e. g. giuzio, m. et al. ( 2019 ), climate change and financial stability in the financial stability review of the european central bank, may 2019 ; and piera de silva, l. a. ( 2019 ) research on climate - related risks and financial stability : an " epistemological break "?, speech at at the conference of the central banks and supervisors network for greening the financial system ( ngfs ), paris, 17 april 2019. all speeches are available online at www. bankofengland. co. uk / news / speeches 3. progress on transition as assessed against industry - specific transition pathways to help identify the leaders and laggards in the transition ; and 4. degree warming potential of the portfolio, which assesses the quality of transition plans relative to the paris goals. firms such as aviva, axa and allianz have already voluntarily disclosed this information. they are now feeding into a tcfd group that is considering whether the warming potential, or any other metric, is the best way to measure the potential opportunities in the transition. for cop 26, we intend to leverage the success of existing groups and coalitions, like the net zero asset owner alliance, climate action 100 + and the un pri to build a large coalition of asset owners and asset managers who expect their portfolio companies to become net zero aligned. mdbs and innovative finance the work on reporting, risk and returns will put in place the foundations for private finance to help drive the transition to net zero, but much more must be done across the full spectrum of the financial sector. multilateral development banks and development finance institutions have essential roles in mobilising blended finance for adaptation, resilience and mitigation, especially in the communities most exposed to the devastating effects of climate change. as the secretary of state noted, we will be asking these institutions to develop robust implementation plans for paris alignment in the run up to cop26. we will also consider how to best channel the expertise, experience and ingenuity of the financial sector to develop innovative approaches to meet the biggest challenges in the transition to net zero. this will mean : 1. understanding which new financial products, such as transition bonds and transition