beyond a horizon of five years. they rely on past experience and on expectations for a rather short forecast period. this means that longterm, non - linear, non - cyclical risks that extend beyond that period are likely to be missed. in other words, the horizons of market players are compressed. one of the obstacles to incorporating longer - term developments into the analysis is a lack of forward - looking data reported by issuers. data on climate - related financial risks are scarce and often chaotic, since there is no framework that standardises their disclosure. as a first step to change this, an industry - led task force convened by the financial stability board recently published recommendations for voluntary, consistent and comparable disclosures of such risks by corporates. this is an important first step, and its success will depend on whether a critical mass of corporates follows the recommendations. in parallel, the g20 is working on improving the availability of public environmental data. the next step we need to take is to improve analytical tools. many banks and institutional investors have yet to develop the capacity to identify and quantify the risks that arise when environmental aspects are factored into the valuation of their assets. promoting the use of environmental risk analysis in the financial sector is one important topic of the current german 4 / 5 bis central bankers'speeches presidency of the g20. first and foremost, of course, it is a task for financial institutions. banks need to incorporate climate risks into their risk management – in particular, but not exclusively, for long - term project financing. the bundesbank and other central banks are in the process of improving their analytical capacities for climate risks. but i believe that the role of central banks can go further. as supervisors who are in close contact with financial institutions, we can foster an awareness of physical and especially transition risks, and make sure that they are taken seriously. where appropriate, we will also incorporate climate - related risks into our supervisory risk analyses. for example, the analysis of portfolio risks stemming from physical or transitional risks – a concept known as carbon stress testing – has been a niche topic so far. i believe that this will have to change. furthermore, central banks can help in generating knowledge. for example, the central bank of the netherlands has established a sustainable finance platform to promote and encourage dialogue on sustainable finance in the financial sector. i expect we will see more initiatives like that in the near future, and i think they can play an important role in promoting knowledge. an important task

be negatively impacted. that speaks, in my point of view, in favour of close and open cooperation between the major economies in the world. the deutsche bundesbank is deeply involved in the debate on cbdc. but, we are also thinking of alternative solutions which could help to overcome existing pain points, reap the benefits of digitalisation and support new payment use cases without introducing cbdc – and without the possible undesirable implications related to it. one way could be to enhance conventional payment systems, both at the domestic and global level. in this respect, we support the market in developing a pan - european payment solution with full deployment of the new instant payment infrastructure. in addition, we believe that the roadmap developed by the financial stability board ( fsb ) provides an excellent plan to enhance cross - border payments. 6 in this respect, it is also becoming clear that cbdc is not the panacea to a multi - faceted problem. we are also examining the possibilities of interlinking blockchain - based solutions with conventional payment systems – like our real - time gross settlement system : target2. there could be a technical connection between a smart contract and target2, where the smart contract initiates or rather triggers a payment in target2. which is why we call such a connection a “ trigger - solution ”. the trigger - solution would have the benefit that the existing payment infrastructure could be used in a tokenised economy without the need to issue cbdc. furthermore, such a solution could be made available for different payment infrastructures, and in the short term. 4 conclusion ladies and gentlemen, let me conclude here. first, introducing cbdc is a political decision rather than a technical decision. therefore, a comprehensive conceptual analysis and assessment of cbdc relative to alternative options is necessary – especially in terms of the fulfilment of our mandate, but also regarding its impact on society as a whole. 4 / 5 bis central bankers'speeches second, the fact that many central banks are currently analysing this topic speaks in favour of international dialogue and close cooperation. that is also true in order to achieve quick and substantial progress in international payments. third, i believe that it is in the interest of the global central bank community that new payment arrangements, like stable coins, with potentially global reach should only be offered if appropriately regulated and supervised. i am well aware that i may have raised more questions than answers given. but let me finish with another confu