additional efforts in this direction are needed, with particular attention towards their improved adoption, compliance and monitoring. naturally, more transparency and clarity regarding the projects that are being financed, as well as the associated risks, would result in increased confidence and, thereby, interest from the broad investor community. importantly, this would also help overcome important barriers for institutional investors who, owing to their more strict criteria and requirements, may have been impeded to resort to this type of instruments due to insufficient visibility of the projects and activities to which see organisation for economic co - operation and development ( 2017 ) : “ investing in climate, investing in growth ”, may. resources are being channeled. additional barriers for the development of the green bond market are the absence of a developed domestic debt capital market and the insufficient number of bankable and standardized green projects. closely related to the above, significant efforts must still be made in order to bridge remaining data gaps. 5 the better equipped investors are to more accurately assess returns and risks associated to green financial instruments, the more likely they are to partake. to this end, central banks and other authorities, not exclusively in the financial sector but perhaps also in the environmental and related realms, must join efforts to gather, generate and publicize relevant, dependable statistics of trusted quality. more directly, central banks themselves can “ lead by example ”, specifically by evaluating the possibility to systematically incorporate sustainability considerations as part of their portfolio allocation decision process. the potential for action in this front is ample, in view of both the amount of financial resources ( i. e. international reserves ) managed by these institutions, on the one hand, and the still - low extent to which they take action along these lines, on the other. for instance, in a recent bis survey, nearly two thirds of the respondents answered “ no ” to the question “ does your central bank include sustainability considerations in the pursuit of its policy objectives? ”. 6 an increased demand by central banks of green bonds may have the added although the nature of said data gaps is diverse and, in most cases, activity - or project - specific, they are in general related to information that can be needed to efficiently price externalities ( both negative and positive ), assess and manage risk - return trade - offs, and evaluate the extent to which market - based mechanisms have aided to allocate resources and risks optimally. for further details, see fender, ingo et al. ( 2019 ) : “ green bonds : the reserve

remarks by javier guzman calafell, deputy governor at the banco de mexico, at the panel on “ developing sustainable capital markets : mapping the challenges and setting priorities ”. omfif – dz bank, washington, dc, october 19, 2019. 1 i thank the organizers for the invitation to participate in this panel. mainly as a result of increasing carbon dioxide and other greenhouse gas emissions that have come about as a byproduct of economic activity at large, but particularly in sectors heavily reliant on fossil fuels, global temperatures are at present higher relative to pre - industrial levels, and are projected to rise further in coming decades. in addition to the environmental, health and broader welfare costs that such damage is already impinging, climate - related risks are among the main threats faced by the world in the medium - to longrun, especially in view of scenarios with potentially catastrophic and irreversible consequences, which are currently envisaged as plausible. given the complex and multidimensional nature of the issue at hand, as well as the extensive and, to a significant degree, unknown ramifications that may ensue, any sensible proposal with realistic chances to effectively contribute to a solution must contemplate the simultaneous and coordinated action of diverse, albeit complementary, policy tools. in addition, even though unilateral efforts at the domestic level are essential, international cooperation is needed to successfully overcome these challenges. why is the involvement of central banks in these issues important? the views and opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the institutional position of the banco de mexico or of its board of governors as a whole. to start with, climate change is expected to have substantial macroeconomic consequences in coming decades, as it will adversely affect output in a number of sectors. the most severe impact will fall on climate - sensitive sectors, such as agriculture, forestry, coastal real estate and tourism. this may also be reflected on global inflation, to the extent that agricultural and other prices fluctuate more widely, as a result of more frequent and more severe extreme weather events. it is also worth noting that although vulnerabilities vary across countries, those that will likely be most exposed to these risks are among the group of developing economies, in view of the sectoral composition of their gdps, their geographical location, their poverty levels and a more limited capacity to adapt. average estimates of the impact of a 3 degrees celcius