Sarah Breeden, BoE Executive Director of Financial Stability, Strategy and Risk, has delivered a speech emphasizing the role governments, businesses, finance and central banks play in the transition towards climate change action. Governments globally are responsible for developing the policy pathways and infrastructure that deliver the transition plan. Central banks and regulators can operate within their objectives to catalyse those policies and sure financial resiliency in respect of climate change risks. The finance sector can facilitate the net zero ambition through transition driven business decisions.
The speech evaluates the progress of the three phase journey formerly set out to achieve this objective:
- recognising and identifying the financial risks climate change poses;
- capabilities to turn aspiration into action; and
- making business decisions to advance the transition.
The speech identifies the barriers encountered during this transition, and that there is still a way to go before we reach the tipping point where we have the skills and tools conducive to drive climate action. It also considers what else is necessary for progression.