when conducting monetary policy, central banks need to assess the economic situation and price conditions. this assessment should no doubt take into account climate change and the effects of government policy responses to climate change. whether a central bank should be more proactive in introducing measures to support sustainable finance deserves further discussion in the context of the central bank's mandate and the market neutrality of monetary policy measures. these issues relating to monetary policy will not be discussed in detail at this workshop. nevertheless, they are important topics, and the bank of japan will continue to explore them. climate change and financial system stability, the topic of this workshop, has come to be recognized as an important issue to be addressed by central banks, as climate change could destabilize the financial system in the medium to long run. ii. increasing understanding of climate - related financial risks against this background, there has been remarkable progress in the understanding and management of climate - related financial risks. this progress is due to the work of participants in this workshop today, along with policy makers, academics, and the private sector, including financial institutions. in the following, i would like to note four points in relation to this progress. the first is the deeper understanding gained of the transmission channels of climate - related financial risks. the idea has become widely shared that the impact of climate change on the financial system through the real economy comes mainly through " physical risks " and " transition risks. " " physical risks " refers to the risks that physical phenomena triggered by climate change, such as large - scale disasters and rising sea levels, will cause damage to firms and households. " transition risks " refers to the risks of an economic impact on firms and households due to changes in policy, technology, or consumer preference as we move toward a low - carbon economy. the second is the methodology for measuring climate - related financial risks. as past experience is not necessarily an appropriate guide when measuring climate - related financial risks, it is difficult to rely on conventional methods to measure risks, such as value - at - risk. with this in mind, some financial authorities and financial institutions have taken the initiative in conducting research about how to measure climate - related financial risks, and have begun to explore new measurement methods, including stress tests. the third is the disclosure of climate - related financial risks. in this regard, the task force on climate - related financial disclosures, or tcfd, was created in 2015, to develop climaterelated financial risk disclosures. in the final report

enhancing its structure for promoting information sharing and cooperation, and for addressing the issues related to climate change. for example, the bank has launched an integrated committee structure within the bank called the climate coordination hub. v. expectations for this workshop this workshop will be discussing topics i consider important in addressing climate - related financial risks. we, central bankers, must consider climate change in the context of central bank responsibilities. however, at the same time, we should not forget the broader picture of the effects of climate change on society and the economy around the globe. i believe professor sachs of columbia university, who will next take the floor, will share with us his broad perspective on this. in the paper session after that, one of the bank's economists will provide an overview of the latest academic studies on climate - related financial risks. then, leading scholars in this field will take the floor. research on climate - related financial risks is advancing rapidly, and the field is wide - ranging. from the perspective of financial stability, this workshop covers studies that focus on the impact of climate change on bank behavior and the factoring of the risks into asset prices. i hope discussions at this workshop will help to deepen our understanding of the complex relationship between climate change and finance. as for policy panel discussion and closing remarks, i believe fruitful suggestions will be provided by my colleague central bankers and bank supervisors ; specifically, insights on how to grasp and manage climate - related financial risks, their philosophy in addressing this issue, the latest responses made to climate change, and the challenges we face. thank you for your kind attention.