sabine lautenschlager : central bankers, supervisors and climaterelated risks panel remarks by ms sabine lautenschlager, member of the executive board of the european central bank, at the ngfs ( network for greening the financial system ) conference, paris, 17 april 2019. * * * the financial community ’ s most important action with regard to climate change has happened in the last few years : many stakeholders in the financial industry, and central bankers, too, have realised that climate change is not an issue for next century. it ’ s an issue for now, and it ’ s a topic not only for other sectors but also for the financial sector and for central bankers and supervisors. the ecb is paying a lot more attention to climate risks, not least through its participation in the network for greening the financial system ( ngfs ). we think about and work on climate change - related risk from four broad perspectives : there is the question of how we use our microprudential supervisory arm to assess and address climate change - related risk in banks. there is the question of climate change - related risk and its impact on financial stability. there is the question of whether and how we take climate change into account in our investments in own funds and pension funds. and there is the question of how we assess the potential impact of climate change on the factors that are important to monetary policy. we continue to conduct further research from all these perspectives. for example, we are collecting more information on the topic of climate change risk and green finance in order to have a better view of how exposed euro area financial institutions are to climate - related risks. collecting data and evidence is not an easy task, as we all know. there are no common definitions or taxonomies and we lack the overall data we need to assess the risk in the financial sector correctly. as the challenges posed by climate change are largely unprecedented, we need to dedicate considerable resources to understanding them. in the area of banking supervision, this year the ecb has formally identified climate - related risk as one of the key risks facing the banking sector. here, we will assess how the banking industry looks at climate change - related risks from a risk management perspective. and on this front, too, further knowledge is key. ecb banking supervision is collecting evidence on whether and how banks are dealing with climate - related risks. we would like to learn more about the constraints banks face when they assess environmental risks, and when they

sector, and this will have an impact on their probabilities of default, value of debt and equity. these changes will then be mapped onto banks ’ capital positions, or corporate bond and equity portfolios held by other intermediaries, to determine the overall impact on the supply of funds to the economy. this is very ambitious but important work. directly linked to this topic is the question of how climate change - related risk will affect the underlying factors that guide our monetary policy. here, research is needed to get an idea of how the transmission channels can be influenced by climate change. so there ’ s more than enough work to be done, and this work is urgently needed and complex. we shouldn ’ t delay. 3 / 3 bis central bankers'speeches