draw on its capital reserves. second, transition risk. transitioning to a net - zero society could lead to adjusted or new governmental policies, technological progress, or changes in market sentiment and market preferences. governments, for example, could impose higher taxes on green house gas emissions. as a result, a company's revenue could decline, and with that, the company's creditworthiness and its ability to repay outstanding debts to banks. to manage physical and transition risks, they need to be identified, measured and monitored. they need to be incorporated in your risk management frameworks. 2 / 6 bis - central bankers'speeches i know many of you are aware of this. i know many of you have started thinking about how to provide finance for the transition as well as how to translate sustainability risks into your business operations. and i know that this complex transition demands a lot from you as banks. the ecb and de nederlandsche bank, on their part, have progressively integrated c & e risks in their supervisory methods. the ecb, for instance, introduced supervisory expectations in its guide of november 2020. this publication urged banks to analyse those risks and integrate them into their business model, governance, risk management and disclosure. in the follow - up assessments of november 2021 and march 2022, results showed that banks have made some progress. however, significant gaps still remain, for example regarding banks'disclosures, as well as the substance of such disclosures. about three out of four banks do not disclose whether climate - related and environmental risks are material to them. this shows that these institutions either are unaware of the potential impact of these risks on their balance sheets – or are aware of their impact, but do not transparently disclose it. this year, together with the ecb climate stress tests, the joint supervisory teams are conducting a thematic review on c & e risks. this means that those risks are part of the methodology for the supervisory review and evaluation, and the ongoing supervisory dialogue. these conversations will most likely not be easy for banks that lag behind in terms of c & e risks. with the introduction of various european disclosure requirements, such as the corporate sustainability reporting directive and the eba pillar 3 esg reporting, little time remains for banks to close the disclosure gaps. and even more standards are currently being developed, such as those from the international sustainability standards board. next to supervisory dialogues and disclosures, there is another important subject i need to talk to you about :

more streamlining of resolution regimes. although that does not necessarily have to mean that resolution will be applied automatically to any teetering bank in europe. we should not forget our final aim, and that is an efficient resolution of a failing bank. i guess the job will never be completely finished, and it is not meant to be. resolution planning is an ongoing process that has become an indispensable complement to going concern prudential supervision. what that means for you is : memento mori, which as you know is latin for'remember that you are mortal '. go about your going concern banking business like you always have, but : be prepared, get your house in order, just in case. on that rather cheerful note i would now like to conclude, and i am more than happy to take your questions. and in case if you would ever like to work for a bank that cannot go bankrupt, even with an expected deficit in the billions, consider dnb. 4 / 4 bis - central bankers'speeches