from operational failures in many businesses or entities at once, some banks argue that capital requirements for a large and diversified firm as a whole might be less than the sum of capital requirements calculated for each individual entity. the committee acknowledges the technical and practical challenges associated with developing and implementing amas for large, diversified firms. we are working to reduce unnecessary burdens on banks adopting them. while we have not made any decisions yet, this is an issue that we are still discussing actively with the industry. but we face even tougher questions if we consider the allocation of capital across not just legal entities, but also across national borders, as some have requested. this is a very difficult question to address in the basel context. the committee must respect the legal responsibilities charged to national supervisors in regulating locally chartered banks, branches, or subsidiaries. all bank supervisors must have access to sufficient, comprehensive and detailed information on a bank ’ s operational risk control structure, including its ama, to evaluate the quality of risk management at banks they supervise. that may include a need for banks and other supervised entities to demonstrate the adequacy of their capital resources on a stand - alone basis. we are giving significant thought to the international implications of this issue, but i should caution that we may not be able to find a completely satisfactory solution at the committee ’ s level. consistency in application of ama standards the challenges of implementing the new accord across borders raise concerns as well about consistency in the application of ama standards. these concerns also address more broadly competition between ama banks, which is the final theme i ’ d like to mention today. while many banks welcome the flexibility to use their own methodologies under the ama, some are concerned that too much flexibility might allow competitors at home or abroad to employ methods that are subject to less rigorous supervision. ensuring the consistent application of the new accord in its entirety is a critical concern for the committee. the minimum standards were developed to help ensure that global competition in banking markets will be driven by each bank ’ s strengths, rather than by differences in each country ’ s rules. moreover, pillars two and three were created to a great degree to promote a more level playing field for banks. for example, incorporating supervisory review - or pillar two - into the international guidelines represents a genuine breakthrough for all of us. by developing guidelines for the supervisor ’ s evaluation of a bank ’ s internal capital allocation process, the committee believes that supervisors and banks will engage in more focused, more consistent, and less burdensome

multiple interrelated drivers and, moreover, that it depends on the area we are considering, whether asset management, the investment industry, corporates or benchmarks, but we can conclude that a common element in greenwashing is the lack of transparency. the quality of the indicators and the assessment of investments will further improve as more and better data sources become available. see esma ( 2023 ). progress report on greenwashing. may. several regulatory initiatives in the european union will make new data available as a result of new climate and sustainability reporting requirements for financial and non - financial institutions. currently we have the sustainable finance disclosure regulation ( sfdr ), that sets mandatory environmental, social and governance ( esg ) disclosure obligations for financial markets participants, and the corporate sustainability reporting directive ( csrd ). with regard to the latter, the european financial reporting advisory group ( efrag ) is working on the details of the thematic standards for collecting information on esg aspects, trying to reconcile csrd with the recommendations of the task force on climate - related financial disclosures ( tcfd ) and the work of the international sustainability standards board ( issb ). as you know the tcfd issued a set of recommendations to disclose climate - related risks and opportunities, grouped into four categories : i ) governance, ii ) strategy, iii ) risk management and iv ) metrics and targets, but again they are voluntary. the issb is working on a global framework for sustainability but it has a different approach from efrag. for example, the issb considers single materiality while efrag considers double materiality. as you can see we have an alphabet soup to negotiate in the drive for transparency. in reality, there is as yet no global standard for disclosure, and it will take several years to achieve a complete framework. according to an analysis conducted by eurosif, through a quantitative survey and qualitative interviews of asset managers and owners operating in europe, one of the most frequently mentioned challenges is a lack of data necessary to comply with european union regulations. some respondents commented that they currently use sfdr - related data merely for compliance reasons and do not consider them to be decision - useful information. however, the responses gathered during the qualitative interviews indicate that this view could change as the coverage and reliability of these data increase. 6 see eurosif ( 2023 ). climate - related data : the investors ’ perspective. report, may. we have a new challenge