transform climate adaptation strategies in agriculture14 ( e. g. through optimized water use, early warning systems on invasions of alien species and selection of resistant crop varieties in response to climate change scenarios ) and in the insurance sector15 ( e. g. providing vast amounts of data to improve climate risk assessment and the pricing policies for climate - related damage protection ). bi, k. et al., 2023. accurate medium - range global weather forecasting with 3d neural networks, nature, 619, 533 - 538. lam, r. et al., 2023. learning skillful medium - range global weather forecasting, science, 382, 6677, 1416 - 1421. kyungmee, k. and boulanin, v., 2023. artificial intelligence for climate security. possibilities and challenges, stockholm international peace research institute. de baerdemaeker, j. et al., 2023. artificial intelligence in the agri - food sector, scientific foresight unit, european parliamentary research service. mclaughlin, m., 2022. climate change is a major challenge for insurers, but ai and cloud can help, ibm ibv blog. digital solutions can help with climate disclosure and climate - risk identification other areas in which digital innovation can help with climate transition are the assessment and selection of tools to channel funds towards green and sustainable finance, the progress in sustainability disclosure, the collection of climate - related information, and the evaluation and monitoring of climate - related financial risks, just to name a few important themes. let me briefly describe some of the efforts in these areas. first, the bis innovation hub and banca d ’ italia launched the g20 techsprint initiative in 2021, a global technological competition in the form of a long hackathon designed to show the potential for new technologies, new ( big ) data, and other innovations to leverage on the potential synergies between digitalization, finance and the energy transition. 16 another initiative in which banca d ’ italia was involved is the 2021 first call for proposals by the milano hub, the banca d ’ italia innovation centre located in milan. some of the projects developed under this umbrella showed how technology, and particularly ai, can contribute to improving financial services, in terms of esg data collection and production. 17 second, supply chain partners, financial regulators and financial entities increasingly require that companies, including small and medium enterprises ( smes ),

financial sector. the various forms of misconduct impose direct costs such as fines, legal fees in investigating allegations and defending lawsuits, and internal monitoring costs that should matter to firms. in this view, a principal benefit to a financial firm of having a strong culture that builds trustworthiness is the avoidance of the bad behavior that can carry significant monetary costs and can inflict destructive damage to the organization ’ s reputation. firms should have every incentive to manage and internalize those potential costs. more broadly, there may be additional adverse effects on other firms or the financial sector as a whole if there is a widespread lack of trust in financial services. similarly, my colleague michael strine has argued that the financial industry exists, in part, to enhance the public good and thus faces a higher degree of social responsibility due to its role in supporting the broader economy. 4 both of these effects suggest a role for the public sector in facilitating appropriate behavior and conduct in the financial services industry. supervision can contribute to this through support for the development of effective internal governance regimes, prudent risk management policies, and strong compliance and control structures, all within a framework of effective oversight from the board of directors. conclusion to conclude, i ’ ve spoken today about the conceptual rationale for public sector intervention through supervision and some practical issues related to how we execute on our supervisory responsibilities at the federal reserve bank of new york. our goal is to promote a safe, sound, and stable banking and financial system that supports the growth and stability of the u. s. economy, and we will continue to strive to meet these responsibilities. thank you very much for your attention this afternoon. i ’ d be happy to take some questions. forming the next generation of bankers : the future of business education and ethics, michael strine, march 22, 2016. bis central bankers ’ speeches