This reporting has been voluntary, but we believe it now needs to be made a requirement. Another cause we are supporting is a comprehensive standard for sustainability reporting in line with the new International Sustainability Standards Board (ISSB). We will also work towards good standards for reporting on indirect emissions in companies’ value chains, known as Scope 3 emissions. In many sectors, this is crucial for understanding a company’s climate risk. We will also work on other climate-related issues where we believe international standards may be useful. One example is the use of emission allowances. Our work with companies begins with setting clear expectations. We have formulated our expectations in a set of expectation documents. When it comes to climate change, we already expect companies to have a climate strategy, set emission targets, report on progress, and stress-test their business models against various climate scenarios. In future, it will be natural for us to emphasise towards a net zero emission horizon. This will give clearer direction to our ownership activities. Exercising ownership Active ownership will play a key part in work on addressing the fund’s climate risk. A dialogue with companies will be particularly important. Chart: Climate increasingly a dialogue topic Our dialogue with companies reflects our expectations. Last year, we held around 3,000 meetings with companies. As you can see from the chart, sustainability is increasingly on the agenda. 3/6  BIS central bankers' speeches  We plan to increase both the breadth and the depth of our climate-related ownership activities.
How do banks in Hong Kong measure up in terms of environmental issues? As an international financial centre, Hong Kong provides a base for a number of multinational banks that have developed detailed environmental policies and procedures. In the case of local and regional banks, I would say that environmental issues are less highly articulated. This is why I welcome this conference and the involvement in it of the Hong Kong Association of Banks. It is not my purpose in this speech to anticipate the more detailed advice that subsequent speakers are going to offer. But I would like to offer a few general recommendations that banks should take into account in dealing with environmental issues. First, banks should keep themselves informed about international and regional initiatives on the environment, particularly those that directly concern financial institutions. In this connection, I would draw the attention of those institutions that are not already aware of it to the work of the United Nations Environment Programme (“UNEP”). This is the main UN institution that deals with environmental questions. As part of its work, it has established a Financial Institutions Initiative on the Environment which is a partnership between UNEP and leading banking and insurance companies to promote sustainable development and environmentally sound business practices. The basic role of the Initiative is to promote the integration of environmental considerations into all aspects of the financial sector’s operations and services.