en / ubs - news / r - news - display - ndp / en - 20190121 - wef. html see : https : / / www. ishares. com / us / strategies / sustainable - investing # esg all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx in this way, recent progress in disclosure, risk management and return optimisation is creating a path to a new horizon. a virtuous circle is becoming possible where companies disclose more information, investors make better informed decisions, and sustainable investment goes mainstream. but the speed with which this market develops will be heavily influenced by the coherence and credibility of climate policies. finance will complement - and potentially amplify – but never substitute for climate policy action. the policy frameworks with the greatest impact will be : time consistent ( not arbitrarily changed ) ; transparent ( with clear targets, pricing and costing ) ; and committed ( through treaties, nationally determined contributions ( ndcs ), domestic legislation and consensus ). as countries build their track records and their credibility grows, the market will allocate capital to deliver the necessary innovation and growth and pull forward the adjustment to a low carbon future. the more prolific the reporting, the more robust the risk assessment and the more widespread the return optimisation, the more rapidly this transition will happen, breaking the tragedy of the horizon. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx

s tail risk is closer to today ’ s central scenario. sadly with climate, history repeats not as a farce but as tragedy and with growing frequency. for banks, the financial risks from climate change have tended to be beyond their planning horizons. the pra ’ s survey of 90 % of the uk banking sector, representing over $ 11trn of assets, found that these horizons averaged four years – in other words, before risks would be expected to be fully realised and prior to ambitious climate policies taking effect. 9 that notwithstanding, the pra ’ s latest survey finds that almost three quarters of banks are starting to treat the risks from climate change like other financial risks – rather than viewing them simply as a corporate social responsibility issue. banks have begun considering the most immediate physical risks to their business models – from the exposure of mortgage books to flood risk, to the impact of extreme weather events on sovereign risk. and they have started to assess exposures to transition risks in anticipation of climate action. this includes exposures to carbon - intensive sectors, consumer loans secured on diesel vehicles, and buy - to - let lending given new energy efficiency requirements. prudential regulation authority. ( sept 2015 ). the impact of climate change on the uk insurance sector. available : https : / / www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / publication / impact - of - climate - change - on - the - uk - insurancesector. pdf prudential regulation authority. ( sept 2018 ). transition in thinking : the impact of climate change on the uk banking sector. available : https : / / www. bankofengland. co. uk / - / media / boe / files / prudential - regulation / report / transition - in - thinking - the - impact - of - climate - change - onthe - uk - banking - sector. pdf? la = en & hash = a0c99529978c94ac8e1c6b4ce1eec. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx informed by these findings, the pra will soon publish its final supervisory statement for banks, insurers and investment firms. 10 this statement will set out the pra ’ s expectations regarding firms ’ approaches to managing the financial risks from climate change