 Good afternoon and welcome. My name is Nick Robbins. I'm a Professor in Practice for Sustainable Finance at the Grantham Research Institute at the London School of Economics. My pleasure really to welcome you to the launch of our new report, Climate Neutral Central Banking, how the European system of central banks can support the transition to net zero. I was delighted to be a co-author of this report along with Simon Decau, my colleague at the LSE and also Oli Volts, who is the Director of the SOAS Centre for Sustainable Finance at the University of London. In a few minutes, Simon and Oli will present to you the key findings and the recommendations of that report. I'm really pleased to introduce three leaders in climate action and central banking who will give their views and their views on the report and the way ahead. So firstly, I'd like to welcome Soledad Nunes, a member of the governing council and executive commission of Banco de España, welcome Soledad. And then Doug Schoenmacher, who is a Professor of Banking and Finance at the Rotterdam School of Management at the Erasmus University, Rosam. And then Lawrence, to be on the CEO of the European Climate Foundation, and also chair of the Board of Directors of Agence Francaise Board of Development. Of course, Lawrence was also Francis Climate Change Ambassador and Special Representative for the Paris Climate Conference in 2015, and it's really recognised as one of the key architects of that Paris agreement. So you will have, as I say, a brief presentation of the key findings. We'll then have the thoughts from our three distinguished respondents. And then we'll really have an opportunity for you to ask your comments and please use the Q&A function for that and we'll try and answer as many of the questions as possible. So clearly, 2021 is a really big year in terms of making a green and inclusive recovery from COVID reality and making the irreversible shift to a net zero and resilient economy. Clearly, greening the financial system is essential to make this happen. As well as efforts from banks and investors and insurers and financial consumers and civil society. It's really remarkable, I think, to see the increasing engagement from central banks and supervisors over the last year, really unprecedented engagement, which I think we've seen on display at the recent Greenswan conference. So I think a remarkable shift. We are in a race race to net zero and to net zero finance and our theme for today is how can the central banks within the European Union, the European system and central banks notably the ECB and also the member state central banks, how can they best support the EU's position of achieving a climate mutual economy by mid-sentence? Clearly, this is very timely. We have the ECB review underway and we obviously have the COP26 marker later this year. So really timely discussion, hopefully. And without further ado, I'd like to hand over to Simon Uli to take us through the reports, findings and recommendations. Simon, over to you. Yes. Thank you, Nick. So I would like to walk you quickly through the overall rationale for climate neutral central banking in the EU, and I will then hand over to Uli for our recommendations. So these are our two reports on net zero central banking. The first one here in the back was published in March, and this is essentially the high level narrative setting report that discusses the rationale for alignment in the international context. And the second one, which is the one we are launching today, presents the EU application of our key arguments and recommendations. So, yes, the science to start with, with what is very clear to all of us, achieving net zero greenhouse gas emissions is a is a central goal of of climate policy, and in order to limit global warming to 1.5 degrees Celsius, global emissions need to reach net zero around around 2050 in terms of policy so that in total around 127 countries must be more by now responsible for around 63% of emissions are considering net zero targets, and quite a few have also legally adopted them already. So there is the financial sector, and well finance is of course critical in achieving this transition and across the financial system, a small but growing number of banks and investors are committing to align their portfolios. And they have committed assets worth many trillions to to net zero by 2050. And then, yeah, this brings us to to central banks and supervisors and so the starting point for our thinking was that that when we started to work on this project a year ago, the, the observation that central banks in some sense were missing from this from this race to net zero. However, and, and we will discuss this on the next slides it's very clear now that there is some emerging net zero consistent thinking among, among central banks. So this is where we are in terms of in terms of action and thinking, I think European central banks as well as supervisors have become very involved in responding to, to mostly the financial stability implications of climate change. And they have also been very clear that this is in line with their with their current mandates. And the issue is that most of the past and also still the current action was or is framed without a clear positioning on on the EU's climate neutrality objective. But this is important. We are starting to see some emerging net zero net zero aligned thinking. So for example there has been this this updated Bank of England remit letter, asking the Bank of England to align it's with with the net zero transition as a as a government priority. Then the ECB well at the ECB there is this mandate and alignment question which is now being discussed very openly by by executive board members. And, and well the NGFS is also doing very important work in this area. So in a, in a recent report on monetary policy the NGFS discussed how to ensure that central bank operations do not undermine this transition to a to a low carbon economy. Then last week the NGFS published its latest set of reference scenarios, which are also increasingly connected to net zero by to the net zero by 2050 target. And Nick mentioned in the beginning there was this recent BIS greens born conference, where a lot of central bankers also discussed net zero and the, and the potential implications. Yes, so why should central banks and financial supervisors act on net zero. Well first macroeconomic and financial stability. So net zero can be seen as the best way of minimizing the risks of climate change to the stability of the financial system, and also the macroeconomy. And then we would, yeah we would argue that that central banks have a role in ensuring that the financial sector alliance with with net zero targets, which would then also accelerate the transition in the real economy. And so this is this the essential point here, help to avoid macroeconomic and financial instability in the future. The second point is policy coherence. So the argument here is that the central banks and supervisors need to ensure that their activities are aligned or coherent with with net zero government policy and relevant in this context is the secondary mandate of many central banks to support the economic policies or priorities of their governments, which may now include includes well net zero or climate neutrality targets. Just to illustrate the urgency in the EU for this for this transition. So the Commission has has set out these these ambitious, these ambitious targets that will necessitated very quick facing out of investment in carbon intensive activities and in order to somehow achieve climate neutrality by 2050. And this will require well a large scale structural change in which a lot of these carbon intensive industries that that you see in figure one here will have to decline very rapidly. Yes, so why should European central banks care about climate neutrality and how does does net zero relate to their to their mandated objectives I guess this is this is the crucial question here for us. The starting point for all of this has been has been for this net zero debate has been the green the green deal and the European Commission has proposed the first European climate law, which will then make the climate neutrality objective legally binding. Then there's also the EU action plan on on on financing sustainable growth. And all of this has implications for the ECB and the European system of central banking. So the treaty sets out that the ECB shall support the general economic policies in the union. This is article 127 of the treaty. And this has now started a very interesting debate about ensuring policy coherence between the the ECB operations and the EU climate neutrality objective. Yes, so our case for action here. We have several points first financial stability. This is the uncontroversial one this is where a lot of central banks are very active already then price stability. This is also very much on the agenda of the ECB and it's it's it's current strategy review then policy coherence so this is what I just outlined and where the debate is I would argue what happening right now at the at the ECB and for example, executive board members Frank elders and Isabelle Schnabel have very prominently discussed this in in in recent weeks at a podcast and in different speeches. And then there's also market neutrality which is an important convention for the ECB and the European central banks, and which yeah which needs to be we thought in light of of of the alignment with climate neutrality. And with this, I would like to hand over to to only for for our seven recommendations. Thanks a lot Simon and hello everyone, really great pleasure to be with you. So, in our report we argue that that the European system of central banks with the ECB at the helm really needs to take a very comprehensive approach. It's clear it's an imperative that we align the financial system across the European Union with the net zero goal swiftly, and it's clear as Simon laid out that there is a very important role for the ECB the national central banks of the various supervisory authorities across the Union. And so we have put down and report seven different recommendations which we think have to go together so this is not the time now to be tinkering at the margins we really need to have a comprehensive approach. It has to be sought through consistently. You could please move to the next slide Simon. If you can click through all of them. So, firstly, on strategy, we need to have a high level strategy for the European system of central banks. They need to develop a climate neutrality roadmap, which really lays out the long term ambitions of that strategy but also near term action. This gives a clear steer for market participants, everyone in the financial system what to expect so so this has to have a guiding function for the entire financial system but of course also this needs to guide the action of the different institutions in the ESCB and the supervisory world. We also argue that as part of this high level strategy the ECB should updates its mission statement so many people actually don't probably know that the ECB does have a mission statement but we argue that climate neutrality should become part of it because it really is such an important element of the ECB's mission going forward. Every recommendation is around prudential policy. So that involves the ECB but of course also the national central banks to the extent that they are responsible for micro and micro prudential policy but also the other prudential and a lot has been done already in terms of analyzing financial stability implications of climate change. Now there's a need to really move ahead quickly to integrate climate neutrality into micro and micro prudential tools and instruments and one very concrete suggestion that we are putting forward in our report is that all financial institutions in the European Union should be required to submit net zero transition plans where they lay out how they will achieve their own net zero transition and these can be then also used for regulatory micro and micro potential purposes. The third recommendation is around scenario. Scenario analysis has become incredibly important and also the monetary financial authorities in the European Union should lay out clear scenarios that can be then used by financial institutions and these scenarios should include scenarios that are consistent with the climate neutral pathway and there has been of course a lot of work done by the NGFS and then we've just a few days ago seen the new set of scenarios so there's a lot to build on but that is an important area and that of course should also be then extended to be used for stress testing and so on. Next slide please. The first recommendation about monetary policy and so we argue that the European system of central banks needs to integrate climate neutrality into the monetary frameworks and the models. So the models really need to take that as a baseline assumption and the various instruments and tools need to be aligned with the net zero pathway and so that would include for example adjusting collective frameworks but also very importantly asset purchase programs and that does not mean that the ECB has to conduct green QE but is about excluding assets that are not aligned with this transition pathway and we've seen a lot of movement on this including the Bundelbank president who's given a note of speech at the Greenspawn conference recently. The fifth recommendation is around portfolio management also an area where a lot has been happening so all the central bank portfolios should be managed according to responsible investment principles and they should indeed adopt a climate neutrality target and that should then also involve publishing how these targets are met. The sixth recommendation may be a bit surprising for some it is about the role of the European central banks in facilitating a just transition. So central banks are doing a lot of analysis of the microeconomic developments in the Union and they also have to analyze how the transition is impacting the national and regional economies and this is really important knowledge that can be put to use also for government policies. So central banks could be stress testing analyzing downside sectoral and regional risks and and and feed these information to policymakers and then last but not least we argue that there has to be a strong international cooperation component climate change obviously the global challenge and many European central banks have been leaders already in this space. And so we need even more cooperation than we have seen so far of course there are different foreign especially the NGFS. So it's important also to to bring this to the standard setting bodies so that the global regulatory framework is being aligned with net zero. There's also a very important role for important international organizations such as the International Monetary Fund, which has to safeguard the global financial system and they're also in the monitoring surveillance of the IMF. This needs to be adjusted again, quite a lot is happening now, and given that the Europeans have a strong voice at the fund, they should slow their full weight behind these processes. And I would also like to mention that European central banks and also supervisors can play a very important role in supporting their counterparts in developing emerging economies in developing the capacity set of course are also now being built up in Europe. So, a lot of central banks across Europe have training centers and they can can run courses the NGFS is starting to work on this now. And of course that also an important role for academia if I may add. Next slide Simon. Could you move on. Thank you. Yes. And so now is the time really for implementation. There has been a lot of momentum, but this year really should be a year of action the crop is coming up. So it's really the time to develop all these strategies and move to implementation very swiftly. Again, this is not not really optional. Frank Eldersen has put it very nicely, you know the, there is actually a mandate for for moving ahead with this. And central banks and also supervisor silly have a role to play in complimenting catalyzing and amplifying the net zero policies that the European authorities, the European Parliament the national government sense on have put forward. So these really are key priorities now. It's clear that central banks alone will not be able to get us through this transition, but it's also clear that we will not be successful in this transition. If central banks and supervisors don't play a leading role in guiding financial markets towards net zero. Will this let me finish I'm really looking forward to the comments from our distinguished commentators. Well, thanks so much Simon thanks much for the lots of good meat there for discussion and thanks for people already putting questions in the Q&A. Please do send your questions through and after our respondents will will start so drawing that in a discussion so thanks very much for setting the scene. I have sort of feedback and thoughts from our three respondents. Sorry that I may turn to you first to give you a sort of high level views on this approach and some of the recommendations so sort of that ever to you please. Okay, thank you. Thank you so much for inviting me to to form part of this panel. And here in these five minutes what I want to make is some general comments. And afterwards we can discuss I mean I can discuss more the, the more detailed the recommendations. And as a general comment, it will also I also should say that I am here and my opinion side of my own is not the Spanish opinion. The reasoning of the report is a very good one is very positive. I think it's very clear is explains the reasons why to act in a very clear way and simple, but it's a very complete. The recommendations are very demanding, we have to say, but this is what is needed. Anyway, I have some comments in some of them that as I said before. In general, I will support it. And I will like to make to general remarks that I think that Simon, I mean, have made more clear than they are in the, in the presentation. The first one is that we have to recognize because I think that we have to be positive. When you recommend something and to go ahead, you have to be positive of what has been achieved. And in this sense, I think that central banks has gone a lot. A big a huge way from in the in the recent years. I mean, Nick, probably you remember a the G 20 green finance study group and the synthesis report. Central banks were this is 2016 central banks were not almost not mentioned. I think that the only mention that was made there was that some kind of role for coordination with other regulators that that was all me. And I think that in general, in particular, European banks have gone from an attitude or position that besides supervision and financial stability. And other things is a matter of the government's policy thing. And I don't have Monday for that. And they have gone from that to, well, there is an important role for central banks, but we are not the only game in town. This is a very, I think I have seen this change. And this change has been mostly in the last two years and what, what are the reasons we have this movement. But first, because there is there is a much more decide political commitment through net net zero, especially in Europe, no by the parliament by the European Commission and by the Women Council of the of the European. And also, because I think that as we have learned, what are the risks, the awareness have increased. So this is also something that is behind this change of activity. And the third one ball is that they have realized that advocacy is not enough. I mean just seeing things and they have to act and to act by a with a sample no lead by lead by a sample. There are three important reasons behind this change of attitude. Also, something that my second general remark is that we have to recognize the challenges I think that the report does not recognize the challenges so much specifically. I think that we have to recognize them. I mean there is a data gap. There are model gaps. There is taxonomy gap. There are many gaps, but as it is very important that I mean greening central banks. Because nobody said that it's an easy task. But this, I mean this, this difficulty shouldn't stop them. Because no action is worse. So, that's to make it very clear. I think that something that probably the report or future report because this is more general. And I miss is sometimes mentioned in the, in the report is that we need to know what net zero plans. I mean when we are saying net zero plan for central banks or net zero plan for banks. We, we don't know what this is at least and if we just use the word net zero. This may be may give room for a lot of greenwashing. So, I think it's important to define what is that exactly. And something I want to say is that there is, from my point of view, there is one missing recommendation. Maybe it's not so sexy, but it's important. And this is that the one regarding physical operations and bank notes production and destruction by central banks. I think, I mean, there are at least the Euro Euro system has some steps towards that, for example, in production in bank notes production. There is the commitment that for 2023 100% use of cotton paper. Now the commitment is 75% but in 2023 will be 100% on in relation to waste. There will be the prohibition. I think that is starting 2022 I think more or less the prohibition of using land landfield for for for waste. I mean, they have to go to recycle. And I think that even if there are these commitments, probably we should recommend central banks to commit to net zero in these tasks and to disclose the footprint in these tasks. I think it's less policy but I think it's important because it's another thing that I mean affects a lot. I mean, this is the second materiality. I mean, it affects the action of the bank affects the rest of the world too. And I think that I will stop here. I don't know if I have spent all my, my time but let's see for the second round. Thank you very much. And I think really good thoughts are particularly spot on about this night zero transition plans I think that's a really good focus for all our attention and always good to have another recommendations, particularly in the financial world, and digital financial what something which is about physical things so I like that a lot. Thank you for all of that and we look forward to engaging your discussion. Thanks again for the Q&A, the questions are piling up very good. I'd like to turn to you Lawrence, if I may, your thoughts again on the on the report and where this fits in the current with the current moment we're in, in terms of sort of European climate policy, thank you. And again, congratulations for that report. It's a very timely one because we need really to make concrete at this, in a way, the way to go to the implementation of the net zero goal which is, of course, the Paris agreement goal. But of course, because the governance system on climate is so distributed there is no one decision maker there's many. And if the objective of net zero doesn't is not all by every major decision maker, you cannot implement Paris so that was very mostly behind the Paris framework. In a way, elaboration and so it's really important to check that every decision maker on the net zero and begin to implement it. So that said, of course, it's very good that central banks and recognizing exactly what Soledad said the major achievements and you know as a step forward as a central banks in you have done. But of course now and the good that's a recognition that they are the financial stability objective mandate that's clear. But then there is a secondary mandate on policy currents and climate, of course, come in. And I know, of course, in some jurisdiction we see that the legal debate is continuing or whether they can or they cannot have a mandate on climate change so that's very important to insist, and to say there is no other way. And again, following the famous work, when she was at IMF, if climate is macro critical then then there is a direct consequences on finance stability as the report is showing. And that said, it's the question of the merit order, the link between price stability and the secondary mandate is certainly something to begin more. And, but there is a clear avenue of discussion and again building on Soledad comment. And that would be in a way understanding what the net zero plans are. And by the way, it's not only banks or asset owners or asset managers, or private banks that has to define that it's a, this issue about what is a pathway to a net zero So it's a very, it's a question mark for every business and then comes what I think I liked in the, in the report the ideas that we have to check that and to create some kind of accountability mechanism just to understand how this, this mandate now these proceedings happen. So, there is no now few, you know, a few people ignoring that they need to act on climate is urgent. And at the same time, we see central but Laurence you're on mute. Oh, sorry. Sorry, so I was just having a big discussion. Do you hear me now, do you hear me now. Yes. Let's make it short then. So I was saying that the central banks that this issue about the mandate which is still open and the report, which recognized that discussion. It's very good that across the crime is a climate action. Again, it's not only government only meaning the policymakers, but we need really to do have the net zero concept embedded every decision maker. Action and strategy so it's really it's this question of having to net zero everywhere is important and in a way is a condition for central bankers to understand how they can articulate financial stability with the net zero target and the policy currents because of course they cannot operate on void. And this is comes to the my command that, and I think we can build on the report and develop this even more that the question about the relation between the price stability is a primary mandate of price stability is connected to a positive duty to support EU climate goals. And that's part of their policy current mandate and that has to be developed even if and you're actually this is not there so there is a discussion even by the way at the board of ECB as we know it. So because everybody recognize now mostly that climate action is urgent. I mean, finally, we don't have the data we will lack quality data in many areas that's why in my muted comment, I said that we need net zero pathway by 2050 or soon after or earlier that has across the board, asset owners asset managers private companies, everybody and of course government and the policy have to displace and net zero, because if not of course I understand the remark of central bankers today to say we will lack that time. But the other side but meantime, we cannot just wait to have this that existing data because we in a way it's it's not the first, it will not be the first occasion where central bankers are making decision and uncertainty. So you don't have a really total predictability of course on the financial market so I don't think it's a totally strong excuse. And by the way, it's really important to that central banks that are displaying their macroeconomic modeling, which is of course a key element of reference for many actors. Just invest in this new type of modeling that integrate the long term. And, and of course, it's not the, it's not the way it works now. But I saw the, I do think that there is an effort and investment and intellectual and technical investment that central bankers has to do that. That can, in a way, make a reference for and I, I think this, these elements that the net zero have to be developed plans in the report exactly should, you know what be developing in even in the macroeconomic modeling. I think that the idea that central banks should be neutral should merely follow markets and policy makers really creates a risk of central bank going missing in action. As Christine Lagarde noted that the Greens one conference some earlier on, and I do think these ideas that the protection is, we don't have the data, and we have to be in a way neutral. To really reinforce the existing situation this market neutral approach, and that of course, reinforce the high carbon status quo of financial markets and this cannot be prolonged so I think, of course, how to do that it's probably something we, we could improve in the following research. After this launch more concrete elements again I cited the modeling the investment in new type of modeling that integrate the climate risk and the and the capacity and all the investment infrastructure that is needed to respond to that. But in a way that that because the role of the of the central bankers in orienting to macroeconomic vision. I think that that's part of the duty you know where even if they operate into, of course, the data set that is not perfect but they could push everyone to be serious about displaying their scenarios and checking their scenarios. There is one point I like in the report as well which is, you mentioned that very quickly in the presentation but this is the accountability element. So that there need to be mechanisms that we understand what what what it is consistent. And when really what are the action that makes a mandate consistent with supporting climate policy and these net zero scenarios. So, I do think that, of course, central banks of a visor in Europe can requires a reporting and disclosure of climate risk data, of course that every other discussion and GFS and again I saw that signaling and really recognizing that it's, but we need to do more than that and go for, again, the idea what could be a financial stable system of course different, and there are different economic structures or would say are all different, but that will really help, including the framework. I do think that will, this will help as well to fight against the net zero greenwashing which I see a danger really these days and ensuring that there is and central bankers of course and regulators have a responsibility in this case not to in a way induce false expectations and to check that in a way and could play a role not have not specific idea that could play a role in this accountability mechanisms. So, I do think that last element I would like to mention is because the net zero has to be inclusive. As the reports notes, it's important to use climate stress this thing to identify regional and sector hotspot for climate related and particularly the employment risk and in particular on the just transition elements so that are my remarks, I do think that I think just this report is a very important contribution, the language of this report I think can be really adopted by many central bankers, and I hope that that would be the development we will see. Well thank you, Lawrence, and really good to hear those those thoughts and again thank you for your partnership in from the ECF and making this report a reality. So, your thoughts really follow that as they say. So over to you for your remarks. Thank you. Thank you Nick and thank you for the invitation. And I want to congratulate the three authors on an excellent report on the movement to net zero and the involvement of central banks and supervisors. And what I really like is that it is clearly pinching on the secondary mandate, because I've been in legal conferences and let's be clear it is not a major issue for price stability. It is really the secondary mandate so let's be clear on that so I like that. And for the sake of time I have two points to make to make. And the first one is with solid already mentioned. You have a movement to net zero by 2050. Everybody's making these China makes it for 2060 60 and the court in the Hague has set to shell nice that you have a target but your transition plan is not credible. You have to tell you to do more. And I think that that's exactly summarizing the needs targets are only useful if we have pathways. And I would. So you build a clean but you downsize at the same time fossil you have to do both sides of the coin. And I would say we need annual milestones, because both plans have an increase in the next five years and then a decrease that's not credible at all. So, annual milestones for decreasing starting tomorrow. The good news is the blunder task force and a new IFRS rules will require disclosure. Actual emissions can be checked. And then we need to check financial institutions have to do it. And the comment, the question of Alex liman, a colleague at broykel. Yes, we have to do all supervisors not only banking, but also pensions insurance and non bank financial intermediary so across the board otherwise we get used to shift. And I have one recommendation for for Nick for the LSE. Your colleague Simon Deets is doing the transition pathway initiative, and I would recommend to put the financial sector in as a new one, so that you can check whether the financial sector is one and a half degree aligned. That would be really great service if that's feasible. Then my second point. Central banks and supervisors have a tendency to think at risk, they're almost trained to be risk a first and that you always see a problem when you walk on the street. And I think I'm a finance person. If you talk about net zero that means funding moving away from fossil and moving to low carbon technologies. That's an allocation role. That's the primary role of the financial system. So I would say let's be clear about that risk is only a tool to avoid unnecessary losses. So this about allocation. And then how bring your allocation to the central bank mandate. Nick asked me to be specific. First of all, all economists know that monetary policy is allocational. And at the LSE I learned from Charles Cuthart that central banks are not for profit. So risk is not a consideration in the monetary policy operations apart from taking a haircut of course. It's allocational admit to it, admit that we want to move allocate to lower carbon, and then be honest about it because otherwise we have fussy discussions about risk. Well, we mean allocation. The second thing is supervisors have started to look at business models of the clients of financial institutions. So they're worried that banks, pension funds insurance companies are financing companies with an outing a business model. That's a basic source of credit risk. So thinking about the climate. We will see whether the bank, the pension fund is checking the business model of the clients, whether that's aligned with one or half or two degrees, or whether that is behind. That's transition preparedness, the second about the future and that's why some already stressed it is the need for scenarios but then credible scenarios. On that note, I would like to ask to finish, and that we update ourselves from the risk perspective which is really scaring everybody and normally won't put people in action, but try to be positive. And that is also far nicer if you work on it. So I would say let's recognize it as allocational. And let's get on with it with annual milestones to be checked and not far away plans, which are pie in the sky so let's what the court did in the take. Let's take that serious for ourselves. Thank you. Thank you, Doug really really really interesting I think this focus on the on the near term is really important I was on the themes I think came out of scenarios being essential, but actually we know that the reallocation this decade is going to be critical to what we're talking about, which I think is something which is much more within the regime and culture of potential supervisors, actually what banks and funds and so on, are thinking about in the next three five years in the business cycle that actually yes 2050 bringing that forward to to sort of near term action is going to be what's what's needed. We've got lots of questions thank you all for those. I think we've sort of touched on a couple of them the just transition point I think that was a sort of an interesting point that we were trying to make so thanks for asking asking that we've got question in from Indonesia as as well, and also price stability I think we touched on that a little bit Lawrence. So one of the things that I think is an interesting question. So two interesting questions that come through from from this. One is actually about actually are there potential downsides in terms of this ship to net zero central central banking. I think is that are there risks in terms of taking this approach. I just wanted to get, I think it's Alex layman's question so thanks Alexander. So, could net zero and bank supervision be counterproductive banks. Could they should be shifting assets and so on so maybe some to some thoughts on that we don't have to answer that but I think that's an interesting one. I think we'll, I suppose thinking about central bank supervisor always thinking about unintended consequences I think there's a consensus this is important area but are there any potential unintended consequences who would like to take that we just have one or two hands for that if anybody has any thoughts. Thank you. Alex, and it's a great question I alluded to already a little bit of it. I think the financial stability board is quite clearly in the Marconi and now also in the new leadership, looking at non bank financial intermediation because risk are shifted to markets and then they are nowhere. So I think you're completely right that we have to have a financial system wide view. I think that's recognized in macro prudential where it is feasible is number two. I see as the main risk that we move to slow, because the International Energy Agency said very clearly is no scope for new exploration of oil and gas. Still, major all companies are doing that. That's where the risk is that you have a stranded assets on your balance sheet, not that we move too fast. So I would see the main risk is that you move to slow. And that financial institutions, although they do a bit of clean energy they didn't downsize the fossil fuel holdings, because they just didn't look carefully at it. And then kept the stranded assets of Ben Caldecott. So I see that as the main risk. Great. I'd like to add to that Laurel, so any thoughts on this in terms of because I think obviously do raise these. I totally agree with the problem is, and that's an argument that comes often know if we withdraw too fast from the stranded asset then we create a supply crisis or a demand crisis, whatever, depending on how it managed but anyway we are losing capital which is still invested and many represent sometime, a major part of the equity, or is in the portfolio is in the portfolio of all financial actors by the way. But if we stick to that, that will be a big, you know, you just, if you prolong that at that conversative attitude, then you will have a major shock. And the shock will be you will not be able to respond to that shock so we have to really repeat that that's why the elements on the milestone, what are the milestones who is doing the job. That is a job where regulators and everyone listening to you and even more convinced that the regulators has to believe this role of checking that that really we don't go for that risk. I'm very happy of the comment I would just build on that because I do think we for the moment there is nobody checking really nobody checking and and that that's a major reason we double doubling down. Can I come to you Soledad, you said you have some further thoughts on specifics. And maybe this on this, I also want to compliment that is really important in the, the one of the biggest outside I see is, or risks is developing countries, I mean, they don't have the tools they don't have the funds. It's absolutely important that the developed world, help the developing countries and I think that's crucial because otherwise, I mean, we will, I mean, this is a global thing, if just one part of the world doesn't fight against climate change, then we are all of us lost. This is absolutely important. And the downside consequences that they can they can have in terms of employment and production. So, I mean, they need some really international cooperation. There's not so much in central bank and central banks to I mean I for for making the role, the role, you know, and as the report said, and we'll reach it in his presentation, but mostly from from the other, from the other part, not only central banks but finance and international institutions for instance has to help a lot in that. So, we've got a question actually from her right young from the bank Indonesia which is interesting and I think if we just think about the, the challenge, the EU peaked carbon emissions in 1979. And so there's a sort of almost 70 years from from peak to zero. And I think for some of the major emerging economies that sort of shift is obviously been going to necessarily be much faster. So we're probably coming into the, the final final landing zone for this session. It's been fantastic so far, and we should probably have had a longer session. I would like really to be thinking about next steps that I think we've had some good discussions and good questions and good pushback added recommendations thank you for that and so on. Where do we go from here in this sort of moment, particularly the next six months if I can start with you, Lawrence, because I know you have to head off I think. But maybe particularly a sort of a couple of action points about where we can achieve sort of sort of practical change I think in the in the in the coming months thank you. Basically, as Soledad said it's not easy to know what to do. And, and so taking some examples digging on on some, maybe some case studies over how central bank can achieve that, and what the tools are needed to elaborate on the, you know, as a toolkit and how to do it. I would like to give us another song, simple message before leaving, leaving you. There is of course a big international discussion now that us are coming back to the, to the table about what we'd see this regulation would look like. And I, I would like to insist on, we have made a lot of thinking and progress and definition within the EU community in a way. And I just urge that we stick to that that we, we, I know the US concept will not be the same that will be of course discussion with developing countries that fine and normal, because again that matter of definition for everyone to understand and make of this discussion and how to handle it, because they are different context, but I think we should not just want to, in a way, lose the keys that we did with all these conversations and definitions, because others are lagging behind for many good reason So cooperation on one side as Soledad said, and on the other side, I think we, like many times in climate action, we have to stick with the progress we made in, and hope that others will finally recognize that the taxonomy was, you know, a good result, and that the type of regulations on the mandate is very important on the mandate by the way you see that on us we will probably find a similar concept and even very strong on their side, but on, for example, the taxonomy of the type of disclosure will not be the same but I think we should conserve the intellectual capital and the political gain so far so just wanted to say that I think we should. Very good, thank you so much Lawrence and thanks again for joining us, I appreciate that Soledad you're just closing thoughts in a few seconds if you could. We can't hear you Soledad, sorry. Okay. My finger didn't work. Sorry. Well, I think that the next steps for the your system mostly, I think is to have a more active role in monetary policy and on the, the elaboration of a plan as the first, the first recommendation says, although I am not so serious to say so in the mission statement I think that the mission statement should include for, of course, the secondary mandate, the secondary objective that is not there now. And if he does, if he's there, because the mission statement is very general. So if it says price stability and the secondary objective then implicitly, all the, all this stuff is there. And in terms of that on the action plan and making more clear what is going to do on monetary policy, I am really, I mean, it's a pity that we don't have more time to elaborate that but I see the movement, I mean, among, governors, I mean, all of them recognize defects on price stability and balance sheet and transmission of monetary policy and so on. And some of them, not all of them, but some of them also recognize that following the market neutrality principle or the purchasing of corporate bonds is not very, very good principle. Now, because it, I mean, it leads to a bias towards high intensive sectors and then, because of the main pricing of the market, then it increases the risk of the portfolio the ECB's portfolio plus is against EU policies, because with this bias, I mean, if you and face the mispricing by doing so, then at the end you are against the EU policy commitment. But, and then I am on the opinion of that is optimistic of a governor of back of France, the law, that said the other day in the green transmit that he hopes that when the comparison of the review of the monetary policy strategy comes comes in fall. And we will see, well, more modeling, more models, more research, which is very important, more transparency, asking our counterparties disclosure, which is a very, really, I think it's a very, very powerful tool. And really somehow the, the, the purchases, although this is limited because they, they are, I mean, the purchases are limited in time and in quantity, and it's tricky to do so. It seems that a better than going from a to a is classroom method, a way of doing it is better. So it might make a way that of tilting it gradually tilting it. But I think I mean so I, at the end I am on the opinion that a lot will come next fall. Very good. Thank you. I don't know if I was clear because I am in certain a hurry to because I know that the time is running. Normally, we have a guillotine which chops off all our heads on the guillotine hasn't fallen yet. So maybe if I can ask our participants to stay because I think I'd like us to hear from Durk and Simon and wrap up if we can maybe just give you some closing remarks, but if you could keep it brief, watch out for the guillotine because it may fall. So Dirk first to you and then Simon then only then we'll wrap up. So thank you. Yeah, I will do my mind is one minute. Three items, the climate front of 100 billion. We have to fill that and that's solving Soledad's issue because I fully agree with you if we have solved it but we didn't solve the developing countries, then we didn't solve anything. So let's do what we have said. Afterfall the European Parliament has approved the ECB strategy can start in January 2022 with reducing the carbon bias in multi policy don't do further modeling but just do it. But in the strap, put the animal milestones for the transition path ways of financial institutions. So then in the strap, you can give banks higher capital, if they don't have clear emissions and reductions. Thank you. I do like this idea of annual milestones and also, I think, focusing on what needs to happen 2022 as well I think sometimes we can be obsessed with cop and so on that's very good. Thanks. Well then it comes to you, your rapid fire conclusions and what next. Well I'll just pick up on the developing emerging market world I think clearly we need much greater support and of course on the fiscal side but I also think on the analysis side and so on so I think they have the major role for the IMF World Bank modular that is not only about electoral development banks, but also really kind of peer to peer support and capacity building. And again, I do think actually, we also need to need to build capacities in academia in all these countries that directly feeds into the work of Central Bank survivors. Thank you. Thank you so much. There's a bird singing somewhere I don't know where it is but nice to welcome you as well. Simon over to you. Maybe just to pick up also what what Danny, Danny's question. Yeah, I think it will be very interesting to see where central banks are moving next as as we are increasingly realizing that this is actually quite quite a big task to achieve this transition by 2050, and that this will bring a huge structural change for the economy and I mean historically to to also bring in charts good how again. I've never seen that central banks were always very quick to to to throw all their or their or their approaches out of the window once there was a huge crisis. So I think that will be very interesting to see whether central banks once we realize how big this and significant this transition will have to be whether central banks also will will return to a to a much more involved approach. Thank you all again thanks to Lawrence in her absence. Again thanks to the European Foundation for supporting the research. I think maybe in a homage to to Lawrence clearly within the Paris agreement there is the famous article 21 C, a government of governments to make financial flows consistent with low carbon and climate resilient and and I think sort of thinking through now so five six years on the role clearly finance ministries that was a big cog cog in the picture that Simon showed but also central banks the role in delivering that clear commitment of making financial flows consistent. I think in terms of the international debate we've had particularly about developing an emerging economies. There is interesting, maybe spillover effects of thinking about a net zero financial system in the EU if we think about the, the assets of banks and investors that are headquartered and in the EU, clearly these are these have global implications these are often global assets and so on. So there will be necessarily implications and we need to make sure that these have positive implications for that scale up in capital in developing emerging economies so I would like to thank you all. And this work will be continuing. We will continue to work on the themes around net zero climate neutral central banking, both in the EU, but also hopefully in other parts of the world in the US emerging economies and so on I'd like to thank our remaining panelists, Soledad Nunes, Dirk Schumacher, my co-authors Uli Volts and Simon Dekker and thank you all to you for your questions I hope you found that they some of them went out of and let's continue the discussion so thank you very much. Thanks Nick.