frank elderson : delivering on the glasgow declaration - actions by the european central bank on the road through sharm el - sheikh to a paris - compatible path panel contribution by mr frank elderson, member of the executive board of the european central bank and vice - chair of the supervisory board of the european central bank, at the euro - mediterranean economists association cop27 side event on " investing in and financing the acceleration of sustainable development in a net zero scenario ", sharm el - sheikh, 9 november 2022. * * * at cop26 a year ago, as the outgoing chair of the network for greening the financial system ( ngfs ), i presented the ngfs glasgow declaration entitled " committed to action ". with this declaration, the members of the ngfs – 100 central banks and supervisors at the time, and now 121 – reiterated their willingness to contribute to the global response required to meet the objectives of the paris agreement. and we made concrete commitments on what we will work on and deliver in the coming years, covering all the core activities of the network of central banks and supervisors. 1 i have since passed the baton of chairing the ngfs to ravi menon, managing director of the monetary authority of singapore. yet in my role as a member of the ecb's executive board and vice - chair of the supervisory board, i am part of an institution that is not taking the glasgow declaration lightly. quite the contrary : across all the ecb's tasks and responsibilities – including monetary policy, banking supervision, financial stability monitoring and all our operational duties – we have taken, and we continue to take, further action to incorporate the consequences of the ongoing climate and environmental crises into our work. in our monetary policy, for example, last month we started tilting our corporate bond purchases towards issuers with a better climate performance. and in our work as banking supervisors, we have continued to roll out what i previously described as an immersive approach to the supervision of climate - related and environmental risks. 2 an approach in which these risks are fully integrated into the day - to - day activities of our joint supervisory teams, who are in constant contact with banks. an approach in which climate - related and environmental risks come to form an integral part of our ongoing dialogue with supervised entities and our supervisory review and evaluation process, which ultimately affects banks'capital requirements. an encompassing and integrated approach that is not new to supervisors or banks, because it is one that we have been taking for years

unprecedented effort, also on our part, to understand more fully how far the 2 / 4 bis central bankers'speeches banks we supervise are exposed to these risks. it will also give us a clearer picture of their resilience on this front. the second of these initiatives is a comprehensive review of banks ’ practices related to strategy, governance and risk management – the thematic review on c & e risks, which is a key topic of the session today. two years after we launched the supervisory guide on c & e risks, we are conducting this thematic review to follow up on the self - assessment exercise conducted last year. our main goal will be to assess the evolution of the soundness, effectiveness and comprehensiveness of banks ’ c & e risk management practices, as well as their ability to steer their c & e risk strategies and risk profiles. do all banks ’ processes and analyses have visible consequences? does the way in which banks actually steer their balance sheets and risk profiles reflect the materiality of c & e risks? these will be some of the core questions of this review. as part of this exercise, we will monitor banks ’ alignment with the supervisory expectations set out in the guide, and encourage banks ’ progress towards the industry ’ s best practices. fortunately, those practices were identified across different european banks over the last two years. they show that some banks are already doing what we are asking. the ecb is doing its part by guiding banks in their climate journey, setting forth supervisory expectations and sharing updates on good practices in the industry. in light of the efforts banks have already made in devising their action plans, as well as all the information on this topic published to date – by both the ecb and several other public and private organisations we expect to see material progress in banks ’ implementation deadlines and concrete actions. as part of the thematic review, we will also be looking more closely at the risk management practices for environmental risks such as risks to biodiversity, water stress and pollution. all have similar features and warrant a coordinated approach. banks can make significant savings if, taking advantage of the momentum, they extend the range of their preparations to cover all these risks, and are thus ready for a new, more concrete, supervisory and regulatory environment. our benchmark from last year shows that, as of early 2021, very few banks were looking into environmental risks beyond climate. we have highlighted this gap to banks. this year, we will assess how banks are managing their exposures to environmental risks beyond