the best possible solution at the time. no, national accounts were not harmonised. and yes, the data were patchy and incomplete at first. but as imperfect a measure as it was, it enabled progress and was a fundamental step towards lifting economies out of the great depression. fast forward 90 years – and you will find us here, today, facing an even greater challenge than the great depression : climate change. we have got better at collecting information on the consequences of climate change. as patchy as those data may be for now, it will enable progress in climate issues too. and in any case, banks do already have access to enough information to start making real progress. climate change and banking supervision let me give you some background. 1 / 4 bis central bankers'speeches the ecb has identified climate change as a key risk factor for the european banking sector in 2021. the latest edition of our financial stability review1 suggests that around 80 % of european banks are already exposed to climate - related physical risks. in november of last year, ecb banking supervision published a guide on climate - related and environmental risks. 2 in that guide, we make it clear that we expect banks to take a comprehensive, strategic and forward - looking approach to disclosing and managing all climaterelated and environmental risks – which also include, for example, the risks of biodiversity loss and pollution. 3 we then asked banks to conduct a self - assessment relating to the expectations we set out in that guide, and to draw up action plans for how they intend to comply with them. this supervisory exercise will begin with, but not be limited to, taking stock of banks ’ self - assessments – and it will have important consequences for banks. we are now in the process of benchmarking the banks ’ self - assessments and action plans, and will then challenge them as part of our ongoing supervision. next year, we will conduct a full supervisory review of banks ’ practices for incorporating climate risks into their risk frameworks, as we gradually roll out a dedicated supervisory review and evaluation process ( srep ) methodology that will eventually influence banks ’ pillar 2 requirements. let me clarify that in the context of next year ’ s stress test exercise the reflection of its outcomes will be of a qualitative nature. a possible impact – if any – will be indirect, via the srep scores on pillar 2 requirements. but let me stress as well that this is not the end game. gradually we will start treating climate related risks

banks have developed implementation plans, and many have started to progressively improve their practices. there are some areas where banks have made substantial progress. for instance, roughly half of them have started to integrate climate risks into their client due diligence. they have developed dedicated client questionnaires to better understand the climate risks to which they are exposed, and they use this information when deciding to whom they grant credit. in addition, roughly half of banks are now integrating climate risks into their lending policies, sometimes requiring that a specialised climate - related risk function advises them on higher - risk transactions. what is remarkable is that the progress we are seeing on all these fronts was identified in banks from different countries, with different business models and different asset volumes. some banks have also been proactively trying to overcome the scarcity of climate - related data by independently developing their own indicators – such as financed carbon emissions, financed technology mix and energy performance certificates – to identify corporate clients with high sensitivity to climate transition risks. they have then set limits at portfolio level to manage those risks. and one bank has developed a climate risk dashboard to present to its board ’ s risk committee on a quarterly basis. this shows that data scarcity can be overcome. finally, some banks have already started to identify and manage other environmental risks beyond climate, such as those associated with biodiversity loss and pollution. for instance, one bank has started to develop a methodology to measure the biodiversity footprint of its investment and lending portfolios, while others have developed a dedicated group policy regarding their commitments and lending criteria related to biodiversity risks. in our guide, we recognise that other environmental factors related to the loss of ecosystem services, such as water stress, biodiversity loss and resource scarcity, have also been shown to drive financial risk. and we therefore expect banks to evaluate all environmental risk - related information, beyond climate risks, to ensure that their risk profile is sufficiently covered against them. 4 these practices are proof that, contrary to some of the industry ’ s claims, what the ecb is asking is not unreasonable or impossible. some banks have effectively raised the bar, and those lagging behind should take inspiration from them and follow suit. conclusion to conclude. for all their many flaws, national accounts data continue to be extremely useful for policymaking to this day. they have been extensively reviewed and gradually harmonised – the same path we should expect for climate data and the architecture supporting them. no, climate data are not harmonised yet. and yes, they are