established institutions. advances in data science allow analyses of extensive publicly available climate data sets. there is a lot of information from news agencies and public bodies, weather reports, geo data etc. big data analytics helps to evaluate and condense such data sets into so - called “ heat maps ”. they allow gauging the overall economic impact of climate - related risk on a local basis. they help, for example, to visualize and quantify the physical risk of climate change, which is typically driven by 1 / 2 bis central bankers'speeches extreme weather events such as typhoons. heat maps can be a useful instrument for investors and lenders to identify climatic high - risk areas before making decisions on the capital allocation. 2. 3 … by pushing green financial products using digital technology thirdly, the application of digital technology is not limited to analysis. it can also help to further develop and push green financial products themselves. issuing green bonds is a vivid example. the eu green bond standard is still in the making, but it shows how green bonds come – compared to conventional bonds – with higher requirements : quite a few boxes are to be ticked before a bond may carry the green label. i see two immediate benefits of using digital technology here : more efficiency and more credibility – and these relate to both the issuance as well as the verification process of green bonds. with regard to efficiency, using “ blockchain - based smart contracts ” could smooth the complex issuance process of green bonds, saving costs and time for issuers. this could open up the green bond market to a wider investor base, including retail investors. a study1 shows that using blockchain can greatly reduce the typical denomination of green bonds. in terms of costs, there would be no difference between a usd 10 and a usd 10 million green bond on the blockchain. in turn, this would also make the issuance of green bonds a viable option for a new and much broader range of companies and project developers and could give a much - needed boost to the supply side. besides, the built - in features of blockchain technology ensure that the transfer of value is tamper - proof and secure, thus ensuring credibility. furthermore, by leveraging blockchain, internet of things ( iot ) and ai, readings from sensors in solar panels, for example, could be uploaded directly to the distributed ledger. this allows investors to monitor the environmental impact of their investment in real time. in a nutshell, green

globally systemically important financial sector. we are, so - to - say, a “ coalition of the willing ”. central banks always play a key role in the financial system, and this is also the case for green finance. in many ways, the market for green assets can be compared to the early stages of other relatively new market segments. for market dynamics to fully unfold, investors need a stable investment framework, including reliable market standards, market indices and transparency. and central banks are trusted parties. given our advisory role in politics and our perceived role as anchor investors, we can serve as catalysts for further market growth. but given our enormous market power and our independence, we have to act responsibly and be accountable. to address central banks ’ crucial role, the ngfs sees itself as a platform for best practices and for the exchange of views and experience between central bankers and supervisors. in our first comprehensive report, published in mid - april, we put forward six practical recommendations. 1 / 4 bis central bankers'speeches the four recommendations addressed to central banks and supervisors are : 1. integrating climate - related risks into financial stability monitoring and micro - supervision. this includes assessing climate - related risks in the financial system and integrating them into prudential supervision. 2. integrating sustainability factors into own portfolio management. the ngfs encourages central banks to lead by example in their own operations. 3. bridging data gaps. public authorities are asked to share data relevant to climate risk assessment and make these data publicly available. 4. building awareness and intellectual capacity and encouraging technical assistance and knowledge - sharing. the ngfs encourages all financial institutions to build in - house capacity and to collaborate to improve their understanding of how climate - related factors translate into financial risks and opportunities. two ngfs recommendations are addressed to policymakers : achieving robust and internationally consistent climate and environment - related disclosure. investors need to know about the climate risks in their investments. and supporting the development of a taxonomy of economic activities. a taxonomy makes investing green easier and prevents “ green washing ”. it creates more market transparency on which activities are really green and which are not. the ngfs is tackling these challenges in three workstreams : on banking supervision, on macrofinancial supervision and on scaling up green finance. i am a member of the ngfs steering committee and, as of april, i have also taken over the chair of workstream 3. tomorrow, workstream 3, hosted by the bundes