sharon donnery : climate risk and sustainable finance forum capacity building working group remarks by ms sharon donnery, deputy governor of the central bank of ireland, at the launch of the " report from the climate risk and sustainable finance forum's working group on capacity building ", dublin, 27 march 2024. * * * my thanks to dorothy and kevin for the warm introduction. i am delighted to be here with you all at the launch of this report from the climate risk and sustainable finance forum's working group on capacity building. as many of you will be aware, the climate forum first met in june 2022, and is made up of senior - level representatives from the central bank and the irish financial sector, as well as climate risk and sustainable finance experts and academics. its main aim is to build and accelerate a shared approach between the financial sector and the central bank in the understanding and management of the financial risks and opportunities posed by climate change. we seek this through discussion of high - priority climate issues and the establishment of a framework within which industry can progress work on these topics. having identified climate - related capacity building as one of the high priority issues, i am very pleased to see the publication of the working group's report, and the first external piece of work from the climate forum come to fruition. i also look forward to the publication of the risk management working group report in the coming weeks. on behalf of the forum, my thanks to all working group members for their efforts and a special thanks to dorothy and kevin for co - chairing and delivering this work. the willingness of climate forum members to come together and support the working group, to devote time and resources, and to collaborate on this topic is very welcome, and to my mind reflective of the importance of the issue and the seriousness we must all treat it with. the transition to a sustainable net zero economy is critical for the economy and society and we encourage the ambitions and progress shown already through the climate forum to support financial services in playing its part to make this a necessary reality. while this report does not represent central bank requirements or guidance and is, rather, the work of the climate forum, i very much welcome its publication today. the work of the climate forum seeks to identify the ways in which progress can be achieved in a manner that is accessible for all financial market participants – and today's report is a good step forward in this journey. 1 / 2 bis - central bankers'speeches building capacity by enhancing our

significantly to enabling price stability to be maintained. as the riksbank's monetary policy is guided by the development of inflation one to two years'ahead, the inflation rate is sometimes allowed to deviate from the target in the short term. if monetary policy were aimed at continuously minimising these deviations, it could require major adjustments in the steering interest rate, which would in turn lead to large fluctuations in production and employment. this was the reason behind the decision not to try to achieve the inflation target of 2 per cent as early as 1993 and 1994. we chose instead to allow the first effect of the increase in import prices that followed in the wake of the floating krona to have an impact on the system first and to accept a temporary and limited rise in the inflation rate. what we wanted to avoid was the second round of effects. it is also for this reason that we have tolerated a'deviation interval'since 1995. while inflation has been low, growth in both sweden and finland during the inflation targeting period has been good from a historical perspective, and unemployment has fallen gradually from the high levels during the crisis years. there has been a successful consolidation of public finances in both countries and a fall in the central government debt measured as a percentage of gdp. additionally, fiscal policy in sweden has become more predictable with the introduction of a rolling nominal ceiling for public expenditure. moreover, a number of measures have been taken to improve the functioning of the swedish economy. these include deregulation and changes in the tax and social insurance systems. this has meant that the conditions for a favourable development have improved and confidence in the swedish economy has increased. at the end of 1996 ; however, finland chose a different direction for its exchange rate policy by taking part in the erm as a preparation for full participation in the emu from its start in 1999, while sweden decided in 1997 that it would'wait and see '. however, an unforeseen obstacle over the past decade has been the large fluctuations in the exchange rate. from an international perspective, these fluctuations have not been greater than those experienced by other countries with a floating exchange rate, but they have played a prominent role in the swedish debate and have probably been discussed here in finland too, bearing in mind our close trading connections. let me say here that while the variations in the exchange rate have been larger than we anticipated, the effects of this volatility have been much less than might have been expected. our central bank and many