investments. risks that we must take into account. but it doesn't end there. as a guardian of monetary and financial stability it is also our responsibility to contribute to a smooth transition. this cannot take place without the involvement of the financial sector. in that role, we encourage embracing impact investing as a means to accelerate the sustainability transition and reduce systemic risks. in my view, this also means that we need to ensure that we are not a barrier to your transition to impact investing, while at the same time managing your risks effectively. that means that we have to change too, that we have to make choices too. for instance, when we assess financial risks for investments, we have to consider whether or not they are future - proof. or when applying the prudent person principle, one could argue that we should be concerned not only with the financial returns that participants will receive from fund investments, but also with whether there will still be a liveable world where participants can enjoy those returns. however, it is important to note that impact investing is often associated with illiquid and more complex products, such as venture capital and private equity. here again, our different roles come together. indeed, such investments require a sufficient level of knowledge and expertise to manage these products responsibly. 3 / 4 bis - central bankers'speeches to further tailor the way we supervise and help funds like yours, we have developed a good practice guide for sustainable risk management. we will update this guide next year and we also intend to include faqs for clear expectations. i hope these tools, and of course close cooperation, will encourage you to use forward looking indicators. to apply scenario analyses rather than focus on historical track records. and motivate you to implement a concrete transition plan and more long - term, sustainability - focused kpis. yes, there is work to be done, there are choices to be made. this transition will take time and energy. and it will take teamwork. between government and the financial sector, but also between the funds you represent and the central bank i represent. but as edmund burke once said : " nobody made a greater mistake than he who did nothing because he could do only a little. " i am convinced that all our'littles'will add up to one liveable planet, where your participants can really enjoy their pension -. 4 / 4 bis - central bankers'speeches

the implications of these choices may be for the diversification of our portfolios. second choice : finding the right people and creating the right processes to make this work. that means recruiting the appropriate capacity and competences and reorganising our organisations. that means defining new or additional kpis to also reward decisions that contribute to impact goals and put less emphasis on classical views, like the markowitz modern portfolio theory. third choice : being more transparent about what you do and the results you are aiming for. that means : moving away from the short - term focus that keeps you locked in the past and present, towards a sustainable, long - term future. 2 / 4 bis - central bankers'speeches however, it's not only the financial sector that has to make choices. like i said : it's undeniable that policymakers, regulators and the financial sector are mutually dependent. these upcoming national elections are therefore important. because to make the transition to a sustainable future a success, or even a possibility, we need a government with a clear long - term vision of sustainability. not only at the national level, of course, but also at the international level, where global standards and a unified approach to the big issues are sorely lacking. a global setting investors can have confidence in and build on. policy stability and a clear destination are key conditions for financial institutions to embark on the road towards sustainability and of course, central banks and supervisors have their role to play, their responsibility to take, their choices to make. we may not sit in the driving seat ; we are definitely part of the team : as a supervisor and regulator and as a watchdog over monetary and financial stability interests. the latter will clearly be threatened by a disorderly transition. today i want to elaborate on these roles in a more holistic and integrated way. in our role as supervisors and regulators we make sure that financial institutions identify, recognise and mitigate climate and nature - related risks, and – should risks materialise – prevent them from having serious consequences. risks that – we must acknowledge this – not only involve the mitigation of climate change and nature degradation or risks stemming from sudden transition policies, but that also require us to adapt to risks and realities that can no longer be avoided. risks our planet is already facing every day, like extreme heat and drought that cause wildfires, or torrential rains that cause floods. risks that have financial consequences for our food supply, health and housing ; for insurance and