be the most difficult. the taxonomy and standards need to be credible to prevent greenwashing, but inclusive enough to allow sustainable investment products to be developed. similarly, the company disclosure regime needs to be credible. but at the same time, it should not place an undue burden on companies. thus, with sustainable finance we constantly need to balance between different perspectives. we need to try to make sustainable finance inviting, but not at any cost. this is best exemplified in the discussion on promoting sustainability with the prudential framework. 1 / 3 bis central bankers'speeches we still have no idea to what extent the greenness of an investment correlates with the financial risks. and as we should preserve the prudential framework to insure against risks, we should figure out other ways for incentivizing sustainable investments. for financial institutions and supervisors, my advice is to take climate risks seriously. many already do, despite the difficulties with the data and methodologies, and especially in communicating the results of climate risk analysis. the ecb climate stress test coming in 2022 will further ensure that everyone starts thinking about climate risks. central banks and supervisors all around the world have joined forces in the network for greening the financial system, or ngfs for short. this network is, among other things, working to bridge the data gaps and build scenarios for the long - term forward - looking analysis required for climate risks. the results of this are available to all. i encourage you all to take a look at them and investigate if these can help you in your own efforts. helping the financial institutions in analysing their climate risks is not the only thing that central banks do. many central banks want to lead by example and are measuring the climate risks in their own portfolios, while embracing responsible investment policies. the ngfs is doing its part in identifying best practices and spreading them across all central banks. according to the latest ngfs survey, central banks mentioned “ reputational risks ” and “ to set a good example ” as their main motivations to adopt responsible investment practices. it is worth mentioning that the ngfs survey is a global, not a european survey, with 40 central banks in over five continents participating. i would also like to highlight the joint decision made by eurosystem central banks earlier this year to measure and disclose the climate - related risks of the euro - denominated non - monetary policy portfolios. non - monetary policy portfolios fall within eurosystem national central

approximately 80 % – very rapid increase in welfare. some countries did even better : in poland and estonia corresponding increase in economic welfare 1 / 2 bis central bankers'speeches was approximately 170 %. research from the ebrd shows that the countries that joined the eu have also been better in ensuring that growth is inclusive. rapid economic growth in the region, integration with the older eu countries and convergence towards them has been an economic success story for the whole continent, showcase example of economic reforms yielding benefits that can be and are shared widely. many eu member countries that joined in 2004 are now integral parts of eu - wide production networks. i was happy to witness the arrival of the new member states and also new members to the european commission 1. 5. 2004 before moved to the bank of finland and to the ecb governing council in july of the same year. as we celebrate these achievements, we need to remember their prerequisites. global economy is full of sad examples of countries failing to catch up, failing to improve welfare of their citizens. if institutions are not stable and credible, and if the rule of law is not respected, then it is not possible to attract investments and not possible to ensure sustainable economic convergence in the longer term. in this regard performance of the countries in the region was helped by the european union, which was the anchor. it offered both economic assistance and also a model of democracy, which respected rule of law and separation of powers. while this model of independent institutions and rule of law has been successful, many see it now challenged in various parts of the world, and the issue is not unknown here, either. every country and every nation has her right to choose their political leaders and political tendencies. but membership in the european union, which is based on common values and respect of the rule of law, brings also its obligations. the question is : how to preserve the rule of law, how to preserve independence of public institutions, including central banks and financial supervisors, from undue political influence? economic literature and history tell how important the role of institutions is for sustainable economic growth. countries that are able to share increasing prosperity and, for example, ensure education opportunities are better placed to uphold functioning institutions in the long - run. however, countries with good economic performance are not immune to temptations of various degrees of populism. one type of populism is that establishment and the forces in power is challenged. this is a challenge everyone in power must accept and can be