In the aftermath of the financial crisis we took far-reaching action to make the financial system more resilient against crises – Covid is the first real test of those changes. The financial system has supported the real economy in the crisis, as it must. We need that same ambition in our approach to climate change. But what is different with climate change is that we know now it is coming, so we can identify where risks will arise and start managing them in advance. Compared to the financial crisis and the pandemic, the risks from climate change are even bigger and more complex to manage. And acting now gives us the best opportunity to manage those risks. The good news is that progress is being made. A mere five years ago climate change was considered more of a charitable cause within the financial sector. Although it can sound prosaic, this progress has to focus on data and disclosure. The Taskforce for Climate-related Financial Disclosures (TCFD) has led the way on this. What we cannot measure we cannot manage, so it is important that financial firms and their clients use the TCFD framework and the latest tools available to measure, model and disclose the climate risks and opportunities they are exposed to today and in different future climate scenarios. We at the Bank started to do this ourselves when we published our own climate disclosure this summer.1 We are now working with the Treasury and other regulators to consider the UK’s approach to climate disclosure.
To support this, we need to see a strong focus on public metrics that set out the climate impacts 5  Climate BES was first announced in the July 2019 Financial Stability Report and further detailed provided in the December 2019 Discussion Paper 4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  of both investment and corporate activities. In turn, this will help to facilitate the development of capital market instruments that package risk and return and asset allocation strategies that align portfolios with the transition. The Bank will support the work to make this happen, consistent with the objective of our Financial Policy Committee to support productive finance and thus the economy. Returning to Bretton Woods for a moment. The UK economy and financial system is very open, and like Covid, climate is a common global risk and we cannot hope to insulate ourselves through domestic action alone. We are committed to working closely with willing international partners through initiatives such as the Network for Greening the Financial System (NGFS), of which we are a co-founder and very active member, and where much progress has been made in raising our collective ambition as central banks and regulators as well as identifying best practice in identifying and mitigating climate risks in the financial system.