, governments are taking action to mitigate and adapt to the consequences of ongoing climate and environmental crises. in the united states, the inflation reduction act contains unprecedented measures aimed at supporting the green transition. similarly, in the eu a multitude of policy, regulatory and legislative measures – including the european climate law [ 4 ] – are being implemented to reduce net greenhouse gas emissions by at least 55 % compared with 1990 levels by 2030 and to ensure climate neutrality by 2050 at the latest. measures at the eu level are being complemented by action in individual member states, while action is also being taken at individual state level in the united states. not only public authorities and non - governmental organisations acknowledge these physical and transition risks of the climate and environmental crises for the financial sector. banks themselves are also telling us that they see these risks as material to their risk profiles in the near term. put simply, climate - related and environmental risks cannot be ignored and, fortunately, they are no longer being ignored. on the contrary, they are being taken very seriously. preserving the soundness of banks let me now turn to how climate - related and environmental factors are increasingly being taken into account in banking supervision. it is worth recalling the guiding principle for prudential regulators and supervisors around the globe : that no material risks should be left unaddressed. this polestar of banking supervision is enshrined in the core principles of the basel committee on banking supervision ( bcbs ) and has been included in legal requirements for decades. according to this simple but crucial principle, banks must identify and adequately manage the risks they are exposed to. this also holds true for climaterelated and environmental risks. to be clear, it is not for supervisors to tell banks how green their lending policies must be. supervisors are not pickers of winners and losers in the green transition. however, the international community of banking supervisors does insist that ignoring the ongoing climate and environment crises as well as the transition towards a more sustainable economy is no longer compatible with sound risk management. at the ecb we published our guide with supervisory expectations for banks ’ risk management practices of climate - related and environmental risks in 2020. [ 5 ] in the two years that followed, we conducted a number of supervisory exercises focusing on banks ’ approaches to managing these risks. we looked closely at how banks are performing relative to our expectations and found that they still have a long way to go before they are fully compliant. for example, most banks have put in place organisational

yandraduth googoolye : small and medium - sized enterprises in mauritius address by mr yandraduth googoolye, first deputy governor of the bank of mauritius, on the occasion of the signing of an agreement for a line of credit to the mauritius leasing company limited by the european investment bank for sme financing, caudan, 19 december 2011. * * * ladies and gentlemen it is a great honour for me to be among you for this memorable event and i welcome this opportunity to address this forum on a subject that has been much talked about lately, both at the national and international level. smes have played a key role in providing the necessary impetus to the advancement of some of the world ’ s economies like the united states, china, japan, taiwan, korea, hong kong as well as many countries in europe. ninety - nine per cent of all european businesses are in fact smes. they provide 2 out of 3 of the private sector jobs and contribute to more than half of the total value added created by businesses in the european union. in some countries, such as the uk, governments have entered into an agreement with major banks to determine how much they will lend to smes. in south africa, smes are said to contribute 40 % of gdp and 40 % of employment opportunities. there are currently over 100 million smes in africa and this figure is deemed to grow even more. india and countries in south america have been concentrating their efforts in developing the sme sector. in developing countries, smes serve as a useful bridge between the informal economy of family enterprises and the formalised corporate sector. as such, most policymakers deem the health of the sme sector to be highly important for an economy mauritius is not an exception to this. i believe that smes are critical for our future economic prosperity given that it has been placed on the national agenda by the government. indeed, the government of mauritius has endeavoured to bolster the sme sector by providing various incentives, including industrial space and special grants amongst other measures. some of the former smes are now big players in the mauritian corporate landscape. a survey conducted by statistics mauritius in 2007 revealed that there were around 92, 000 smes which provided employment to some 209, 000 individuals. these numbers are estimated to have reached 94, 000 and 250, 000, respectively, in 2010. sme jobs represent around 46 % of total employment in the economy and are mainly concentrated in