##ilised. the beginning of the end … succeeding sustainably i have already said that it is hard to think of a more complicated economic scenario for policymakers globally – the scale, duration, and relative impact on demand and supply from the covid - 19 pandemic. the health - driven nature of the economic challenge means there remains more downside risk to the economic outlook, prompted by uncertainty and caution. likewise, i have highlighted that monetary and financial stability are necessary to economic success, but far from sufficient especially in times of pandemic. as appropriate, starring in the times of covid - 19 are health, fiscal, and regulatory policy responses. globally, health outcomes are key to driving business and household confidence levels in the long - term. monetary policy may not be the lead role, but it is playing an important support role. the reserve bank cannot just step aside and say ‘ sorry, not our patient ’. we have a clear mandate to provide our economy its best chance of thriving. covid - 19 and the reserve bank ’ s balance sheet, 20 august 2012, speech by christian hawkesby https : / / www. rbnz. govt. nz / research - and - publications / speeches / 2020 / speech2020 - 08 - 20 6 monetary policy statement august 2020 : https : / / www. rbnz. govt. nz / / media / reservebank / files / publications / monetary % 20policy % 20statements / 2020 / mpsaug2020. pdf? r evision = 3ca8a4de - 673e - 41d5 - bff6 - 408f0198ad09 the monetary policy committee stepped up to this challenge as recently as our august monetary policy statement, announcing an immediate easing in monetary conditions and outlining policy options ahead. the policy tools that we ’ ve used to date and the additional tools that we are considering using as a package in the near future are not new to central banking. the instruments include various forms of negative wholesale interest rates, further quantitative easing using large scale purchases of domestic and foreign assets, direct lending to banks, and forward guidance as to what needs to be done under certain conditions. however, we acknowledge that these tools are technical and unfamiliar to most new zealanders. we recognise we have an ongoing communications challenge to ensure people remain confident in our intentions and actions. table 1 : principles for using monetary policy7 decisions the monetary policy committee makes regarding the use of policy tools

as environmental tax reforms. likewise, a number of central banks and supervisors have joined their hands in the network for greening the financial system. in the eu, and also globally, the financial sector still lacks adequate instruments for mainstreaming green finance. the eu commission, through its plans for a capital markets union and sustainable finance action is working on this. climate - related criteria should be better reflected in the key tools used for decision - making by market actors, such as benchmarks and credit ratings. apart from the simple carbon footprint, we also need to look beyond that. in addition to the production and life - cycle of things, it is becoming more important to consider what happens to products in their afterlife. many things considered green are not that, if we do not reuse and recycle the resources. electric cars is one of the prime examples. similarly, many things considered brown might be less so, if 1 / 2 bis central bankers'speeches the product lifetimes are long enough and resources can be recycled in afterlife. looking at what the financial sector can do for the circular economy, in my view the financial industry does acknowledge the problem, and there are ample amounts of capital looking for sustainable companies. more work needs to be done on how companies can cost - effectively and reliably indicate the sustainability of their operation. but for all companies planning their future, now it ’ s the time to think deep about how to transform their business models sustainable, and turn that into concrete actions. not least because there is a paradigm shift going on in the sentiment of the investor base, and it is starting to affect the selection of companies that attract investments and funding in the future. i know this first - hand, because this is what we do in the investment policy of the bank of finland. ladies and gentlemen, let me conclude. as i said, environment - and climate - conscious business models are becoming increasingly mainstream. that is fine, but the transition should be much speedier. hence, i want to encourage us all to recognize the urgency of concrete climate action, and build a timely and consistent transition path to the sustainable circular economy. 2 / 2 bis central bankers'speeches