climaterelated ﬁnancial risks will also affect the ﬁnancial actors that provide those companies with funds. it is thus in the interest of banks, insurers and other investors to recognise climate - related ﬁnancial risks and to adjust their risk management properly. this, in turn, could help companies to manage their underlying climate risks. indeed, a survey among institutional investors even found that most of them had already actively approached their portfolio companies on the issue of climate risks ; only 16 % had not taken any action. however, a different survey painted a bleaker picture of ﬁnancial institutions worldwide, as only a quarter of respondents reported on the emissions they ﬁnance. for these institutions, their ﬁnanced emissions were ( on average ) hundreds of times larger than their operational emissions. as many respondents did not analyse the climate impact of their portfolios at all, this may suggest an underestimation of climate risks. investors still lack a clear view of how exposed many companies are to climate risks and how they handle those risks. what is needed is comprehensive disclosure of consistent, comparable and reliable climate - related information. the task force for climate - related financial disclosures ( tcfd ) already offers a framework for companies to disclose important climate - related information voluntarily. and it may be encouraging to see that support for the tcfd recommendations has grown substantially in recent years. but unfortunately, the disclosure of aligned information is still low. last year ’ s status report found that, in each category, only a minority of the reviewed companies disclosed information consistent with tcfd recommendations. [ 7 ] moreover, having analysed reports from tcfd - supporting ﬁrms, researchers concluded that “ ﬁrms cherrypick to report primarily nonmaterial climate risk information. ” this sobering ﬁnding should not come as a surprise. disclosure has characteristics of a public good and may therefore be riddled with free - rider problems. [ 9 ] thus, a voluntary approach may not provide the optimum quantity and quality of information from an aggregate point of view. given the experiences gained thus far, governments ’ current initiatives for moving toward mandatory climate - related disclosures are a step in the right direction. in this context, we should acknowledge that, globally, even basic information is still lacking. according to calculations by bundesbank staff, only 15 % of all stock market - listed companies disclosed their greenhouse gas emissions in 2019. considering the urgency of the matter, we

attention, not least because of its thought - provoking title but mainly due to its profound analysis of the new challenges. climate - related ﬁnancial risks have been on the agenda of several bis meetings, starting in 2016 when central bank governors talked with guest speaker lord nicholas stern. since 2018, the bis has participated in the network for greening the financial system, the global alliance of central banks and supervisory authorities advocating a greener ﬁnancial system. the bank ’ s activities in the ﬁeld of policy and regulatory issues concern the bis - based standard - setting bodies like the basel committee. furthermore, staff contribute to the climate - related work of hosted associations like the financial stability board and the international association of insurance supervisors. and in its role as a provider of ﬁnancial services to central banks, the bis has launched two green bond funds – one of which is denominated in us dollars and the other in euro. with these investment vehicles, the bis is helping central banks to incorporate environmental objectives into the management of their own funds and supporting the development of green ﬁnance. 3 managing climate - related financial risks and enhancing transparency ladies and gentlemen, when it comes to decarbonising our economies, carbon pricing is certainly the key tool, giving important incentives to consumers, producers, inventors and investors. yet it may not [UNK] to drive the necessary transition to net - zero on its own – the high speed required to limit global warming to the paris targets may necessitate additional measures. the ﬁnancial system has a pivotal role to play in this regard, as it will have to channel trillions of dollars or euros into private investments needed to transform the economy. without doubt, ﬁnancial market participants form expectations on both factors – the likely pathway of carbon prices and additional measures – to gauge the implications for asset prices. however, these expectations are conditional on the information available. thus, in terms of channelling ﬁnancial means to their most [UNK] uses, [UNK] information can be regarded as a precondition for the needed reallocation of resources towards a greener economy. the dynamic growth of green ﬁnance in the last few years has demonstrated how eager private investors are to decarbonise their portfolios. however, greening the ﬁnancial system goes beyond strengthening the market segment of green ﬁnance. both climate change and the transition to net - zero may cause ﬁnancial risks, especially for companies in the real economy. by extension, these