And you can, and must, make progress now whilst policy is developing – ahead of regulation and to support the development of best practice. A necessary foundation for that is investing in education to increase your staff's understanding of climate issues. Without that, none of this can happen. Transition plans are fundamental to driving the right transition. They allow financiers both to manage their risks and to allocate capital to support real economy decarbonisation. And by highlighting where there is clarity about the way forward and  4/7  BIS - Central bankers' speeches  where gaps remain, they compel the right conversations. I encourage you all to engage in them now. The second challenge is that the world does not stand still. We have seen unexpected political and economic headwinds and it seems prudent to assume more will come. With unexpected headwinds and limited bandwidth, longer-term issues can end up deprioritised. Issues do not though go away – quite the opposite, they build in the background. So we all need to be nimble and adaptable in our responses to the nearterm whilst continuing to make progress on the long-term. We must also learn lessons as we go. Russia's illegal invasion of Ukraine, for example, was a shock to our transition pathway and highlighted the sorts of disorderly transition risks we have been worried about. We saw first-hand the economy-wide costs of a necessary reduction in (Russian-imported) fossil fuels before alternative energy sources were in place - a reminder of the costs of disorderly transition.
But this is a collective action problem where seemingly rational individual inaction makes our collective future problems much bigger. So we must not let perfection be the enemy of progress. And after all, managing uncertainty is what you do all the time. Be brave here too. 6/7  BIS - Central bankers' speeches  I will leave you with an encouragement (again) to each play your role, and to make the most of this important network. I would like to thank Jenny Clark, Tim Rawlings, Chris Faint, David Swallow and Theresa Löber for their help producing this speech. 1 In pathways that limit warming to 1.5°C with no or limited overshoot, net global GHG  emissions are projected to fall by 43% below 2019 levels by 2030. See IPCC (2023), ' AR6 Synthesis Report: Climate Change 2023Opens in a new window' 2 World Economic Forum (2022), 'Analysis: Global CO2 emissions from fossil fuels hits  record high in 2022Opens in a new window' 3 From around 0.1% in 2012 to above 4% in 2021. See The City UK (2022), 'Green  finance: a quantitative assessment of market trendsOpens in a new window' 4 40% of homes in England now have an EPC rating of B and C or better.