##s perhaps via bcp ssc, “ core guide 3 : getting to great ; lead reviewer insights from the performance improvement framework ”, april 2013. bis central bankers ’ speeches exercises, security penetration testing, and external review etc. risk management committees have a place in maintaining the focus. 6. engagement and conversations are vital. risks need to be talked about. this builds awareness and action. developing a culture in which risks and risk - taking can be discussed, managed and accepted is a key leadership challenge. while we are not wedded to explicit, whole of organisation, risk appetite statements, the conversations about risk tolerance for particular risks are crucial. it is important to send clear messages to an organisation about whether, why and which risks should be reduced or relaxed a little. some are below the waterline and must be averted. others may be above it and permit greater risk taking. strong, consistent senior leadership is vital. often staff or lay observers contend that risk management will tie an organisation up with process and overhead, slowing it and its innovative capacity down. this need not be the case. motor racing and sail boat racing enthusiasts recognise the finely balanced science and art of incurring increased risk to increase speed, and then set about optimising the tradeoff. recall sir peter blake ’ s famous dictum that the black magic campaign was about doing everything to make “ the boat go faster ”, without making it unstable. organisations need to incur risk in order to prosper. we are not there to tie down all the hatches and keep the sails furled. our goal is not risk avoidance but risk awareness, risk management and, indeed, calculated risk - taking. bis central bankers ’ speeches

these criteria into their decisions and actions. and banks are certainly no exception to this trend. banks have, for some time, had corporate social responsibility areas. but their involvement needs to go further. as we supervisors have been insisting, banks also need to incorporate these elements into their risk analysis and management. in this respect, both the european single supervisory mechanism ( ssm ) and the banco de espana have recently published supervisory expectations relating to the inclusion of environmental risk in banks ’ management. we are also working on the inclusion of these risks in the stress test methodology for the spanish financial sector. in sum, banks and supervisors alike are moving along this path, which poses all sorts of challenges. for instance, it is in no way straightforward to envisage these risks as part of the commonly used valuation and measurement methodologies. moreover, there are cultural factors hampering their inclusion, which calls for involvement from the uppermost levels of organisations. and, above all, one of the main challenges is the lack of information, which enormously hinders further progress. allow me briefly to refer to these valuation - based aspects and the absence of data. traditionally in finances there is a tendency to value investments exclusively from the standpoint of economic return. the classic focus of study in finances would be cash flows ; once capitalised or discounted, these enable us to compare different investment options. from a theoretical standpoint, responsible investment reminds us that we should not value and compare different investments looking solely at an excel chart. rather, we should perhaps look at variables that are not directly monetisable in the expected return on each investment. measuring this “ non - monetisable ” return is clearly not straightforward. the approach being followed focuses on the measurement of “ impact ”. for example, environmental sustainability has for some time used measurements that take “ footprints ”, be they carbon, hydric, environmental, etc. in corporate and labour market circles it is becoming commonplace to consider what the value or social impact of a specific activity is, and to attempt to evaluate the economic and labour consequences of regulatory changes. one good example of regulatory impact is the ecological transition bill that is currently pending parliamentary approval. the aim, as you know, is to switch our economy towards an environmentally more sustainable model. this aim is very broadly shared in our society, but its achievement will have large - scale implications for our productive model that may also entail undesirable social consequences. the banco de espana is working with the