therefore a precondition for almost all other steps to follow. in this context, the green finance study group was tasked to focus on two themes. first : what approaches are financial actors taking to identify and quantify environmental risks, and what analytical tools do they have to assess the financial impact of these risks? in this regard, the group has found that many financial institutions encounter difficulties in quantifying environmental risks in spite of increasing evidence of the potential negative effects on asset values. second : how can publicly available environmental data, for instance on greenhouse gas emissions or projections of natural disaster probabilities, be better used for the purpose of financial analysis and to inform decision - making in the financial sector? a separate but complementary work stream ( of the g20 ) is the industry - led task force on climate - related financial disclosures convened by the fsb. the task force developed recommendations and guidance for helping businesses to disclose climate - related financial risks and opportunities in the context of their existing disclosure requirements. their standard aims to provide the information that investors, lenders and insurance underwriters need to appropriately assess the sustainability of business models by adequately pricing future risks and opportunities in a low - carbon economy. both the recommendations of the task force as well as the 2017 synthesis report of the green finance study group were presented to the g20 leaders summit last week. 2 / 3 bis central bankers'speeches 3. promoting green finance while green finance is becoming increasingly important in funding investment, “ green bonds ” are still merely a tiny segment of financial markets. less than 0. 2 % of the global bond market is currently explicitly designated as “ green ", which means that the bond is explicitly issued to finance an ecological project. that raises the question whether the public sector should support or even promote the development of the market. as regards the issuance of green bonds, promotional banks like the german kfw are playing a pioneering role. such “ semi - public ” issuance helps to address the problem of information asymmetries associated with new financial products. however, the public sector can also support the development of green finance in its role as investor. in the german public sector, sustainable investment recently gained momentum, especially for equity investments. the bundesbank has several mandates of public sector entities, notably pension funds for federal and state governments ’ civil servants. while we are responsible for the operational implementation of investment decisions, it is the clients ’ task to define sustainability criteria. in some cases, sustainability criteria are

already applied, through passive replication of a green equity index preselected by our customers. green bonds, however, do not play an important role in this regard. due to the small market size and low market depth, they could only be used as an addition to a portfolio. ladies and gentlemen, to foster the necessary transition to a low - carbon economy some observers are actually calling for monetary policy to take climate risks into account. however, neutrality is an important principle of the eurosystem ’ s operational framework. in a monetary union with 19 national financial systems, which differ in various ways, it is important not to favour certain financial instruments over other forms of financing. any type of privileged treatment would increase national differences in the transmission of our single monetary policy. thus, to avoid opening pandora ’ s box, we should not to award preferential treatment to green bonds, for example, either in the corporate sector purchase programme or in the collateral framework. the eurosystem ’ s mandate is to maintain price stability. and in order to safeguard its ability to maintain price stability, monetary policy should not be overburdened by other policy objectives. 4. conclusion ladies and gentlemen, i began by telling you about goethe ’ s studies on the weather. the reason why his weather theory was widely ignored by mainstream scientists is that he made an abstruse hypothesis concerning the mechanism of air pressure variations – which shows us that even universal geniuses sometimes get it wrong. but it doesn ’ t take a genius to understand why the transition to a green economy is necessary. a financial system that facilitates this transition is indispensable. on that note, i wish you a fruitful debate and thank you for your attention. 3 / 3 bis central bankers'speeches