As shown in Chart 3, 2008 stands out as one of the worst years in this period. Ten years ago, on 25 November 2008, Norges Bank presented the GPFG’s results for the third quarter. Lehman Brothers had gone bankrupt. The world’s central banks were making large and frequent cuts in policy rates. In the course of autumn 2008, the US stock exchange fell more than five percent on as many as ten separate days. Norges Bank wrote in its press release that “The third quarter of 2008 was an unusually demanding quarter for the management of the Government Pension Fund – Global.” And it was to get worse. The GPFG posted a return for 2008 of minus 23 percent, measured in terms of the fund’s currency basket. Chart 4: Post-crisis paths have differed Chart 4 shows developments in the US equity market from 2008 onwards. The rapid reversal in equity markets, shown in the chart, also affected the GPFG’s results. In 2009, the fund posted a positive return of 26 percent, largely thanks to a 34 percent return on the equity portfolio. The return continued to rise in 2010. While the fall in the fund’s value as a result of the financial crisis in 2008 was historically large, the fund’s recovery in 2009 was stronger and faster than had generally been expected. Owing to a weakened krone, the GPFG’s return was less negative in terms of NOK than in terms of the fund’s currency basket.
We are the first Asian jurisdiction mandating climate-related disclosure across the financial sector by 2025, in line with the global framework set by the Task Force on Climate-related Financial Disclosures. We also made an early commitment to adopting new standards promulgated by the International Sustainability Standards Board. Hong Kong adopts the Common Ground Taxonomy jointly developed by China and the EU. We are now exploring the development of a green classification framework on the basis of the China-EU taxonomy, in order to provide the necessary disclosure and guidance to inform capital allocation and encourage market discipline. The HKMA has set clear rules – for example by formulating clear supervisory requirements and integrating climate-risk into the supervisor-driven stress-testing framework. The various regulatory requirements help build climate resilience into our banking and financial sector. In the process, financial intermediaries such as banks also act as facilitators to help the real sector adapt and transition, in line with global consensus and commitment to achieving carbon neutrality. Second, on data. Currently, there is a lack of accessible, standardised data and analytics support in the market. It presents a challenge, not just for climate risk management but for other purposes such as portfolio assessment and business development. We are working with other regulators and the private sector to address these issues, by improving data accessibility and developing a data repository and analytics capability for the industry. We are making good progress.