is not my place to convince you to start financing green investment, or to buy green bonds just for the sake of it. some of you may even be skeptical about the scientific evidence for climate change, still others may doubt the ability of governments to take action. coming from an oil and gas - addicted little country below sea level, i would understand you for not believing me. but you don ’ t have to. as uniform disclosure standards start to be adopted better information will become available about the carbon intensity of companies, and how they manage their risks and prepare for a low - carbon world. information that will allow you to assess for yourselves how their valuations might change over time, and what the risk is to your capital. information that brings the horizon more sharply into focus. on this very day, 6th of june, 73 years ago as part of operation overlord 62, 000 british soldiers crossed the channel to liberate western europe from barbarism. churchill said of the normandy landings : “ this vast operation is undoubtedly the most difficult that has ever occurred. it involves tides, wind, waves, and contact with conditions which cannot be fully foreseen. ” those soldiers overcame the challenge brilliantly by showing courage, devotion and skill. and i believe this spirit is still alive and well in the british business community. it ’ s the spirit that does not walk away from a challenge, but stands up to meet it, and turns it into an opportunity. not oblivious to risk and danger, but with your minds and motives sharpened by it. aware that what is in your company ’ s interest also helps preserve a world that is rapidly changing. the challenge today is called climate change. let ’ s be aware of the risks and turn them into opportunities. ladies and gentlemen i wish you a productive, stimulating and memorable conference. thank you.

earth cannot afford to ignore these risks. at the same time, new regulation will create great opportunities for those who invest with foresight. and as the financial sector, seizing opportunities and managing risks is your core business. being a prudential regulator, you ’ ll forgive me if i start by discussing the risks. there are generally two types of climate - related risk. first, physical risks : the impact today on insurance liabilities and the value of financial assets arising from climate - related events, such as floods and storms that damage property or disrupt trade. second, transition risk : the financial risks that could result from the process of adjustment towards a low - carbon economy. changes in policy, technology and physical risks could prompt a reassessment of the value of a large range of assets as costs and opportunities become apparent. while some are still debating the scientific evidence for climate change, representatives of the insurance industry know that physical climate risks are already a reality, affecting their underwriting strategies. as governor carney stated in his climate speech, a lloyd ’ s of london study estimated that the twenty centimeter rise in sea - level around manhattan since the 1950s increased insured losses from superstorm sandy by 30 % in new york alone. ever since hurricane andrew in 1992 led to serious losses, the insurance industry has used natural catastrophe models to analyse and measure risk more accurately. use of these instruments is now the norm. insurers therefore seem well - prepared to manage physical risks in the near term. but further ahead, beyond the typical insurer ’ s horizon, previously unimagined levels of physical risk could shift the balance between premiums and claims significantly. this threatens solvency, and may even make some risks uninsurable. if high levels of greenhouse gas emissions continue, scientist predict that oceans could rise by close to two meters by the end of this century. just think of the threat to the combined value of coastal property. and by the way, this estimate could turn out to be on the conservative side, given current uncertainties surrounding the stability of the antarctic ice shelfs. while physical risks pose a serious threat, transition risks may be even more important for financial institutions. transition risk could also be called the risk of success. take for example the commitment made in paris to limit global warming to well under 2 degrees celsius. estimates vary, but it is certain that the remaining budget for carbon emission relating to this target will make large amounts of existing reserves of oil, gas