##ice as a central bank we are not only concerned with resilience at a micro - level, but also at a macro - level. that is why in july 2019 we announced our plan to launch a climate stress test exercise. 5 when the pandemic hit, we decided to postpone the exercise in light of strain on firms ’ resources, and to ensure the ambitious scope of the exercise could be maintained. we have used the extra time to continue our work on the design of the exercise, and firms have been busy preparing for it. and today i am pleased to announce a launch date, june 2021. the exercise will explore three different climate scenarios, testing different combinations of physical and transition risks over a 30 - year period. we expect to use the exercise as a tool to size the risks faced in these scenarios, to understand how different bank and insurance business models will be affected and how they might respond, and finally as a way of improving firms ’ risk management practices through the process of carrying out the exercise. we set out our proposed approach to this exercise in a discussion paper at the end of last year. building on feedback we received in response to that paper, ahead of the launch, we will share with participants more detail on some key aspects of the exercise – for example around data requirements and scenario variables. this active engagement with participants, which we will map out this week, will help build their assessment capabilities and prepare for the exercise. we will not use the results to size firms ’ capital buffers. but that does not mean firms should not be thinking about near - term capital requirements. as we have set out in our supervisory expectations, firms must assess how climate risks could impact their business and review whether additional capital needs to be held against this. investments that look safe on a backward look may be existentially risky given climate risks. and investments that might have looked speculative in the past could look much safer in the context of a transition to net zero. uncertainty and lack of data is not an excuse. we expect firms to make reasonable judgements rather than default to “ zero ”. uk banks and insurers must work to develop these capital assessments over the coming year and the bank will be working in tandem to develop its approach to reviewing them. there is at least one further role for the financial system to facilitate investment in the economy to support climate change. it is important to put this into a broader context. the level of investment in the uk economy as a whole has been

resurgence of covid and the necessary measures to tackle it, we plan for the future and act on these plans. we all know an economy - wide transition to net zero is a huge task. but our experience with covid has powerfully demonstrated our ability to adapt which should give us all comfort that the task we face should be achievable. and to illustrate the importance of getting that focus back, let me draw on a parallel from history. one of the most fundamental reforms – if not the most – of the international financial system was the bretton woods agreement of 1944. wisely, our predecessors did not wait for the second world war to end to determine what the future should look like, and thereby tackle problems that had beset the inter - war period. there are two strong messages from bretton woods that we should have at the front of our minds. don ’ t wait for today ’ s problem to be over before setting the course for the future. and, once again we need a multilateral approach, and we have the opportunity to strengthen that multilateralism. but, if you read the history of bretton woods, you learn that the agreement was not easy to reach and there were costs attached to it, all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice which had to be met. it laid the platform for a sustained recovery from a terrible crisis. there is a lesson in that story. so what are we as a central bank and regulator of the world ’ s leading global financial centre doing to ensure the financial system plays it part to tackle climate change? our goal is to build a uk financial system resilient to the risks from climate change and supportive of the transition to a net - zero economy. in the aftermath of the financial crisis we took far - reaching action to make the financial system more resilient against crises – covid is the first real test of those changes. the financial system has supported the real economy in the crisis, as it must. we need that same ambition in our approach to climate change. but what is different with climate change is that we know now it is coming, so we can identify where risks will arise and start managing them in advance. compared to the financial crisis and the pandemic, the risks from climate change are even bigger and more complex to manage. and acting now gives us the best opportunity to manage those risks. the