We have identified two categories of risks that climate change and our response to it can pose to the financial sector: physical risks and transition risks. And we have reached a basic understanding of how they work. What we have not sufficiently understood is how material these risks are, and whether financial institutions and markets are suitably taking them into account.
I have named a number of steps that I believe will bring us closer to this goal. Clearly, we have only begun to work on this. The French poet Victor Hugo once said: “You cannot resist an idea whose time has come". I believe that the transition of the economy and the greening of the financial sector are just such ideas.