Yet the race to achieve net-zero emissions (‘net zero’) by 2050 is a multi-decade marathon, where the starting gun has already fired, and getting to the finish line will require a sprint start, with a reduction in global emissions of a half by 2030 [figure 1 in the Appendix].1 What I would like to talk about today is how we get there – both what we know and what we don’t know - and the important role of climate scenario analysis in helping us plot the best course. Governments will of course play a central role in laying the track, removing hurdles and setting the pace as we move to net zero. Over 110 countries, including the UK, have now moved to enshrine net zero emission targets in policy or law and are working on detailed plans of what these look like in practice.2  But climate change and climate policy will affect everyone - businesses from all sectors of the economy, public bodies like the Bank of England, households and individuals. And so we all have a stretch of the race to run. Some will perform strongly, others may struggle, and some, particularly in less developed countries, might need a helping hand. But let’s be in no doubt. We need everyone to finish. Role of the financial sector  Let me first say a few words about financial institutions given the unique role they play in this race. As corporates, these firms have some direct emissions but they are not significant.
The working group on scenario analysis has produced some really useful guidance and tools that should be useful both to financial firms and to businesses.10  Next steps  It is critical that financial firms recognise now that the race to net zero has started. Indeed many have.11  9  See Climate Biennial Exploratory Scenario. See Climate Financial Risk Forum. The Glasgow Financial Alliance for Net Zero includes 87 asset managers representing $ trillion in assets under management; 43 banks with $ trillion in assets; and 58 asset owners with $ trillion in assets under management. 10 11  In support of their ambitions, and consistent with our expectations, they need to run climate scenarios as part of business as usual risk management and embed climate risk management within day-to-day decision-making. Time is running out. Perfection tomorrow cannot be the enemy of progress today. We also need experts from academia, think tanks and consultancies to fill in the blanks, helping turn the high-level into ground-level decision-useful material. A lot of promising work is already happening – including NGFS-led work to increase the sectoral granularity of risks and to quantify the impacts from flooding and tropical cyclones. But more research is needed. I will highlight three areas in particular:   What are the implications of government policy design on the transition, particularly on jobs, productivity, prices and different sectors of the economy?