in assessing this impact on sectors and the economy. lastly, it would be remiss of me not to mention in this forum the role of investors. the creation and subsequent development of green bonds, aside from official initiatives and, essentially, in response to private investor demand, shows the growing interest for responsible investment. a brief look at the press will prove that this is a consolidated trend. in sum, the financial sphere, including both the banking sector and investors, supervisors and central banks, is committed to achieving sustainability goals ; but, as is known, transparency and information must be enhanced in order to continue moving forward. clearly, just as business solvency cannot be analysed without reliable and uniform accounting information, the risk of environmental activity cannot be evaluated in the absence of comparable information. allow me to conclude by stressing the importance of us all making every effort to row in the same direction so as to achieve an ambitious goal such as decarbonisation. events like today demonstrate the resolve and commitment of all those involved with this challenge. we must act realistically, mindful of the limitations, but also with sufficient ambition to overcome the difficulties we will have to face. i wish you all a very productive session. 2 / 3 bis central bankers'speeches thank you. 3 / 3 bis central bankers'speeches

economy towards full decarbonisation? the response is straightforward : through correct risk measurement. when banks manage their risks properly, they are promoting the effective allocation of available economic resources, by distinguishing between those projects more likely to succeed and those not viable in the medium term. lending standards are thus geared to detecting the future ability to pay or, otherwise expressed, to measuring the credit risk of customers and firms. banks also measure and manage other conventional risks, such as market and operational risk. but, to date, they will not have been fully considering the so - called physical risks, arising from the direct effects of climate change, and 1 / 3 bis central bankers'speeches they will have only partly weighed up transition risks, stemming from public policies and regulations, technological change and decarbonisation - related behaviour. i should stress that the incorporation of these new elements into the traditional management of bank risks poses no conflict whatsoever ; the opposite is rather the case. both physical and transition risks can ultimately affect bank customers ’ solvency and the value of certain assets, which may be either traded or used as collateral. in addition, they may also experience an increase in the frequency and severity of weather - induced operational events. it is widely acknowledged that the transformative measures to change our productive model will affect bank borrowers. in some cases, opportunities will arise, but we cannot hide the fact that these changes will bear down negatively on certain sectors ’ business models. by incorporating these elements into banks ’ measurement of their classic risks, we pursue two goals. first, to improve the sensitivity and robustness of the management framework and, further, to promote the process of transition in the economy thanks to this better risk discrimination. to encourage the incorporation of climate risks into risk management, both the single supervisory mechanism and the banco de espana, within their supervisory remit, have recently published supervisory expectations relating to proper risk measurement and management. naturally, as supervisors and central banks we should consider these risks in our analyses, whether in our work as macroprudential supervisors or in economic forecasting. as in the case of the banking sector, the inclusion of these impacts in our analyses does not only pose no problem whatsoever, beyond the methodological challenges, but is also patently necessary. for instance, in our work we clearly cannot ignore the changes posed by the transition law, given that they will have most considerable – even systemic – effects on certain sectors of activity. in fact, we are collaborating with the ministry for ecological transition