to our economies and, basically, life itself. think of pollination, which is crucial for farmers, and for our food supply in general. to give you an idea of the magnitude of the exposures, let me give you some numbers. more than 500 billion euro in investments by dutch financial institutions are highly dependent on one or more of the services we find in our natural environment. also, the global carbon footprint financed by dutch financial institutions is at least 82 megatonnes. this is equivalent to the emissions caused if all the inhabitants of new york city would fly to london and back. ten times. this carbon footprint can lead to increased credit and market risk, among other things, as a result of the transition to a carbon - neutral economy. 1 / 4 bis - central bankers'speeches this is exposure, not risk. but still, these exposures could develop into a substantial amount of risk. because business models that are reliant on sectors and markets which are particularly vulnerable to climate - and nature - related risks may not be future - proof anymore. simply because transition risks may impact the current - day business models. for example, the dutch agricultural industry will likely need to shrink in order to meet long term bio - diversity requirements. hence, banks that are heavily involved in financing the agricultural industry today, must prepare for a changing demand for credit from this sector, in the future. in addition to physical risk and transition risk, financial institutions also face potential reputational and legal risk. these risks follow from an increased awareness in society of the effects of climate change and nature degradation. for instance, if a bank promises to be more green and to reduce its investments in fossil fuel sectors, but does not live up to its commitment, its reputation could be harmed. people will react and activist measures or changes in consumption patterns could follow. their goal being, ultimately, to drive banks towards a more environmentally friendly business model. it is clear that people have become more and more aware of the importance of climate change and environmental degradation and their consequences for daily life. people are prepared to take action. and they are prepared to take legal steps as well. therefore, banks may also be exposed to increasing litigation risk. if a bank, as a signatory to a climate commitment, does not live up to what it promises, not only could its reputation be harmed, it could also be subject to litigation, for example by ngos. actions against greenwashing are a good example. environmental organisations, policymakers

to understand it, we have to quantify it. so we accumulate essential data to monitor developments in order to take effective decisions. we do that as a national central bank but especially tandem with the ecb and fsb. for example, statisticians from central banks in the euro area have recently been working hard with the ecb to generate sustainability data. data that indicate the carbon footprint of the financial sector's investments, which can be used to gauge the degree of exposure of the sector to transition risks. data that indicate'physical risks'due to climate change through loans and investments. data that indicate the extent to which financial institutions have invested in bonds aimed at promoting sustainability, the socalled green bonds. of course, these data are not yet complete, but they are urgently needed. today, not tomorrow. because we need to know as much as we can to take on our role as long - term economic advisers. not only for the financial institutions we supervise and advise, but as policy advisers for our governments. nationally and internationally. 2 / 4 bis - central bankers'speeches because they have to take the lead in the transition that must take place. they have to develop and enforce a clear climate policy. they have to take the responsibility to enable and inspire the sustainable choices we must all make. tough, major choices will have to be made : between intensive farming and nature, between fossil fuels and green energy, between heavy industry and air quality. we can help to make that happen. in our role as forward thinkers. especially because'forward'means to me : independent and for the long term, not under the influence of voters, not just until the next elections. that is an important role we have to invest in : to be that angel or devil, or the jiminy cricket on the shoulder of our politicians, whispering in their ears – or pulling themto make sure that sustainable choices are not only made, but are successfully stimulated and implemented. and that takes us to our third role : a leader by example. as an organisation we can and must set an example, we must make our own sustainable choices. for instance in our payment systems, in our monetary operations and of course in our own investments as a central bank. that is our responsibility as a central bank. that is why i am proud that dnb was the first central bank to sign the principles for responsible investment in 2019. this marked the start of our journey towards the integration of responsible investment in our own -