support for the disclosure recommendations. with better disclosure, a market in the transition to a 2 - degree world can be built. that market will expose the likely future cost of doing business, of paying for emissions, and of changing processes given both those charges and tighter regulation. and it will help smooth price adjustments as opinions change, rather than concentrating them in a short, dangerous space of time. early disclosure rules allowed 20th - century financial markets to grow our economies by pricing risks more accurately. the spread of such standards internationally has helped lift more than a billion people out of poverty. climate - related disclosures could be as transformative for 21st - century markets. bloomberg data and bank calculations using market capitalisation as at 12 december 2016 and assets at end - 2015. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx

. org / about / # all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx since the 1980s the number of registered weather - related loss events has tripled. inflation - adjusted insurance losses from these events have increased fivefold since the 1980s to around $ 50bn over the past decade. insurers are therefore amongst those with the greatest commercial incentives to understand and tackle climate change in the short term. their response here in london is at the cutting edge of the understanding and management of such risks. for example, lloyd ’ s of london underwriters were the first to use storm records to mesh natural science with finance in order to analyse changing weather patterns. today lloyd ’ s underwriters are required to consider climate change explicitly in their business plans and underwriting models. the bigger risks and opportunities are still to come for nearly every industry. public policy, consumer demand and technological innovation are all driving a shift towards a low carbon economy. a year ago in paris, 195 countries committed to limit the rise in global average temperatures to less than 2°c, with 117 countries having now ratified that commitment. so citizens, consumers, businesses, governments, and international organisations are all taking action. and entrepreneurs are developing disruptive technologies that will create and destroy value. but which financial institutions are best positioned to gain and which to lose from this transition? which companies and industries are most, and least, dependent on fossil fuels? which businesses are most vulnerable to potential damage from rising physical risks? in every case, which firms have the governance, resources and the strategy to manage, and profit from, these major shifts? at present, the challenge is that investors currently don ’ t have the information they need to answer to these questions. this must change if financial markets are going to do what they do best : allocate capital to manage risks and seize new opportunities. without the necessary information, market adjustments to climate change will be incomplete, late and potentially destabilising. but with the right information, financial markets can smooth the transition to a 2 - degree world. risks to financial stability will be reduced if the transition to a low carbon economy begins early and follows a predictable path. see carney ( 2016 ), “ breaking the tragedy of the horizon – climate change and financial stability ”, speech given at lloyd ’ s of london, september 2015. all speeches are available online at www. bankofengland