And the financial sector should be instrumental in driving that change. Today I want to move us from aspiration to action, and set out how we can achieve this in practice - both at a micro-level, through the decisions each of you make as individual financial institutions, and at a macro-level, across the financial system as a whole. Risks from climate change  But first, a reminder of why climate change matters to you as financial institutions and to us as the central bank and supervisor. Clearly, climate change matters for the environment and for our planet. But what has become self-evident now, even if it was not five years ago, is that climate change creates financial risks.2  These can arise from physical risks, whether acute weather events like floods and wildfires, or longer-term climate trends like the rise in sea level and record-breaking temperatures in the Arctic Circle3. They can also arise from transition risks – the changes in government policy, technology and consumer preference that move our current emissions pathway towards one consistent with net-zero. And let me remind you that the need to transition is economy wide, not just in the energy sector – in transportation, agriculture, real estate, all parts of industry, even sovereigns.
But to assist firms and policymakers in this challenge, we are working with climate scientists and our partners through the central banks and supervisors Network for Greening the Financial System (NGFS), and last week we published a number of reference scenarios.22  These reference scenarios provide for the first time a harmonised set of high-level climate scenarios, available in a publicly accessible database, in which both transition and physical climate change impacts are included in a consistent way. They provide a foundation for decision-useful financial and economic analysis, including stress testing, that will be as relevant for you and your customers, as to the authorities. And we will continue to build on these scenarios, taking on board your feedback and putting in place plans to publish a second iteration around the turn of the year. International coordination  This is only one example of our work with international partners. We are one of eight founding members of the NGFS, which was set up for central banks and supervisors to share expertise on climate-related risks. In the two and a half years since it launched, the NGFS has grown to 66 members and 13 observers spanning 5 continents and from jurisdictions that account for over half of global emissions. This reflects the broad recognition now that climate change matters to central banks and supervisors. Climate change is of course a global problem that requires global solutions. So the work we do through the NGFS and other international fora is essential.