 126 governments have now committed to net zero including three global giants China, Japan and South Korea in the last few weeks. And more and more countries are recognizing that green stimulus is essential. Building a sustainable future will be capital-intensive after a period when there's been too little investment. It will be job heavy when unemployment is soaring. It's what the world needs for its future and it's what we all need right now. Given the whole sales shift in economic and social drivers of values since COVID, it will be a rare company whose pre-crisis strategy remains optimal. And so businesses of all stripes increasingly recognize that changing consumer preferences and new climate policies are creating the greatest commercial opportunity of our time. The leaders are publishing their transition plans for net zero. There's now 500 major companies that have science-based targets and there's a further 500 in the pipeline. By Glasgow, net zero transition plans will become the norm for large companies. Private finance will fund the initiatives and innovation of these plans provided that is provided that private finance has the necessary information and the tools and markets. And that's why our objective for COP26 is to build the framework so that every financial decision can take climate change into account. We're publishing today our COP26 private finance strategy to build a market in that transition. It rests on four pillars, three Rs, comprehensive climate reporting, a transformation in climate risk management and mainstreaming of climate returns and 1M, creating new markets to mobilize private capital, especially private capital and investment into emerging and developing economies. Now I want to spend the balance of my time outlining the progress that has been made since February in the Guildhall and setting out what more needs to be done by the time we arrive in Glasgow. We start with reporting. We all know what gets measured gets managed. Investors representing over 140 trillion of assets are demanding this information and disclosure in line with TCFD. They're also calling on companies to disclose whether or not the assumptions in their financial statements are compatible with the Paris Agreement. With Ireland's announcement last week, over 60 countries and national authorities now support the TCFD and the most forward looking are enshrining it in law with New Zealand leading the way. Regulators are moving as well. The FCA in the UK has completed its consultation on comply or explain disclosure obligations and as the Lord Mayor just said, you'll hear more from the CEO later in this summit. Since February, guidance from international standard setters has sharpened. The IASB has made clear that where climate change risk is considered material, the standards already require that it's disclosed in mainstream financial statements and the IASB's guidance to auditors shows that climate change is an issue that must be regularly assessed by the accountancy and audit professions. So allow me to translate. We have governments setting the goal of net zero. We have over $100 trillion of capital demanding action. At a minimum, companies must disclose whether the assumptions in their accounts are aligned with Paris. In other words, are they joining us on the road to Glasgow or not? Now the best companies are responding. Almost half of companies with market capitalization greater than 10 billion are disclosing in line with most of the TCFD recommendations. But most isn't yet enough. We need full disclosure and we need full disclosure particularly about forward-looking strategies. And this underscores the need to make climate-related disclosures mandatory. Now there are many routes to mandatory and they are complementary. But the important thing is to agree the direction of travel. And so we're calling on governments by Glasgow to use the TCFD as the starting point for any mandatory disclosure regime. Secondly, to publish pathways to show how authorities in their respective jurisdictions will be responsible for implementing climate-related reporting rules. And thirdly, to work with international standard setters, particularly the IFRS Foundation. And that's the body responsible for the accounting rules in over 140 jurisdictions. And it is currently consulting on sustainability standards and how they might be developed. And we would urge all companies, particularly in the financial sector, to engage in that consultation. Now let me turn to the second R, which is risk. Like in the case of reporting, there has been considerable progress since we met in the Guild Hall in February. The NGFS, the group of central banks and supervisory authorities, has grown to over 75 members accounting for jurisdictions that represent over two-thirds of global emissions. It's now developed standards for supervision and the management of climate risk, as well as approaches for climate stress testing and central bank policies for climate change. 14 of those authorities, major authorities, are issuing guidance to major banks and insurers. The NGFS has published its set of scenarios for climate stress testing, which will allow investors to compare results and readily differentiate the strategic resilience of companies they lend to and ensure. 18 central banks have committed to running climate stress testing. And the NGFS scenarios will be important to aligning these approaches and reduce the burden on firms and allowing comparison across jurisdiction. And you'll hear more about these approaches when the governor of the Bank of England speaks later this morning. International authorities are also starting to embed this approach. The IMF included the impact of climate-related financial risks in its most recent financial sector assessment of Norway, and we'd encourage the IMF to now mainstream this approach. And in recent months, as you heard from the Lord Mayor, some of the world's largest banks, including Barclays, HSBC and Morgan Stanley, have committed to net zero by 2050 on a scope 3 basis, which means bringing all of their financed emissions in line with net zero. For Glasgow, we're calling on more firms to use these NGFS scenarios, more central banks to conduct climate stress tests, and to develop and disclose and manage the climate risks on their balance sheets. Turning to returns. Given that climate change is an existential risk, it follows that those companies that are part of the solution to climate change will create enormous value. The financial sector is increasingly focused on this opportunity of a lifetime. In fact, it's an opportunity for a lifetime. As one illustration, the assets under management for the UN's principles for responsible investment have grown over 20% this year to over a hundred trillion dollars. Goldman Sachs estimates that the implied carbon price for long-term oil projects is around $80 a ton, and that hurdle rates for renewable power investment are one quarter of that of long-term oil developments. Investors are increasingly calling as a result for credible transition plans from all companies. Climate Action 100 plus, a group of 500 institutional investors controlling almost 50 trillion dollars of assets, recently demanded that the world's 160 largest emitters, emitters that count for more than three quarters of global industrial emissions, publish their strategies to reach net zero by 2050. And on the road to Glasgow, investors are clarifying those expectations for those plans, with emerging best practice, being publishing plans that include scopes one, two, and ideally three targets, balancing absolute emissions with appropriate offsets, governing the management of those risks at the board level and tying executive compensation to their achievement. Transition plans will reveal the leaders and laggards on the road to Glasgow, but rather than have authorities be overly prescriptive on plans, it may be desirable to have investors have a say on transition. In other words, an automatic annual advisory vote on transition plans just as they have a say on pay. This would establish a critical link between responsibility, accountability, and sustainability. Now, over time, investors won't just judge company transition plans, they too shall be judged. Investors should disclose how closely their portfolios are aligned with the transition to net zero. And some of the world's largest and most influential asset owners are already doing that. The members of the net zero asset owner alliance, five trillion of assets, have committed to manage down their carbon footprints by up to 29% on a scope three basis by 2025 and to be net zero compliant by 2050. And such a metrics-based approach will become increasingly common. So one of the challenges by Glasgow is for investors to agree how best to demonstrate how their clients' investments are aligned with climate targets. A measure of portfolio alignment needs to be forward-looking, it needs to be anchored in real-world targets, and it needs to be dynamic. And these are the criteria that will ensure that investors are engaged with companies that are seeking to decarbonize because, and I mean all companies because we will not get to net zero in a niche, it requires a whole economy transition. Now, there are several ways to measure who's on the right and wrong side of climate history. And today, the Measuring Portfolio Alignment Report, published by a private sector team led by David Blood, the founder of Generations Investment Management, assesses various metrics, including the percentage of assets that are net zero aligned, secondly, transition progress against scientifically determined transition pathways that vary by sector, and thirdly, calculation of a portfolio warming metric to assess the quality of those plans. Over the next 12 months on the road to Glasgow, the industry should use David's report as a basis for discussion and consensus on the most useful measurement. And as you'll hear from Richard Curtis later in the summit, investors need, will need, transparent and readily understandable answers when their clients ask whether their money is being invested in line with their values. The challenge to the industry is to make a material and meaningful metric so that people can make their money matter. Turning to last pillar, mobilization. Climate change is clearly a global challenge. Much of the critical investment will take place in emerging and developing economies. In fact, probably three quarters of the infrastructure investment, the 3.5 trillion of annual infrastructure investment that's required for decades will happen there. So we need to turn billions of public capital into trillions of private capital. Part of this will be through scope three emissions, transition plans. Part will be through investing to mitigate physical risk by increasing infrastructure investment, resilient infrastructure investment and widening insurance cover. Part will be through new platforms such as the GISD for blended finance. And part will be through the creation of new markets, particularly one for carbon offsets. As more and more companies commit to net zero, demand for credible and verifiable offsets will soar. And the most cost effective of these with the greatest emission reduction potential will be in emerging and developing economies. These can generate large flows of capital for many decades. Now, currently, that market doesn't properly exist. It's opaque, it's cumbersome, it's fragmented. The amount of offsets last year was just over $300 million. In order to conserve the carbon budget, we need to spell million with a B. For finance to flow to these projects, we need professional, transparent and resilient market. So we put together a group of experts under the leadership of Bill Winters, the CEO of Standard Chartered, overseen by Annette Nazareth, former SEC commissioner and now Davis Polk, and under the sponsorship of the Institute for International Finance and Tim Adams, this group has been moving at lightning speed and it's on track to deliver a blueprint for a professional carbon offset market earlier next year. Tomorrow they'll launch the consultation for that blueprint and we're calling on all interested parties to engage. So to conclude, I've only highlighted a few of the vehicles on the caravan of private finance towards Glasgow, and you can learn more about them in the detailed private finance strategy published today. But I want to finish by thanking the very many of you from thousands of organizations around the world in the private sector, in the public sector and NGOs that are working tirelessly to make this journey a success. Your ideas, energy and innovation are critical. My Lord Mayor, there's an old proverb, if you want to go fast, go alone. If you want to go far, go together. The private sector has gone a long way in a short period of time. It's moving fast on the road to Glasgow. With the UK and Italian presidencies of COP 26, the G7 and G20 next year, governments now have a unique opportunity to amplify these efforts and ensure that we go far towards our objective of net zero. Thank you. Now with that, it's my very great honor to hand over to the President of the European Central Bank, Christine Lagarde, someone whose innovation, intelligence and drive has led the mainstreaming of sustainable finance and to whose debt we all owe. So with that, I give you President Lagarde. Thank you so much. Good morning. I would like to thank the City of London, the Green Institute for Finance or the Green Finance Institute and indeed the World Economic Forum. Mark, I would like to just pay tribute to your leadership to the excellent introduction that you have outlined for us. And I feel like resting my case because in many ways I will simply compliment many of the points that you have made in a very modest way from my end. The economic challenges of the climate transition are phenomenal. And often I ask myself what is the cause? Survival. And I ask myself who is responsible? All. And then I ask myself how much does it cost? A lot. But nothing that we cannot afford because the cause is our survival. Now, of course, as we all know, a global and accurate price on emissions that would reflect the true underlying climatic and economic externality remains vital to provide the right incentives. But short of that, which I hope will come and not at around two to $5 per ton. Financial markets and institutions can provide powerful and complementary impetus for change. It is crucial that funds be channeled correctly to underpin and accelerate an orderly transition. Just to give you an idea about the magnitude we're talking about. In the European Union only an additional 470 billion euros would be needed annually. To that end, the two priorities that I would like to talk about today fall in under the the headline of information, which Mark has talked about quite a lot, and innovation. More information is indeed essential for financial market participants to understand the link between underlying economic activity and its environmental impact. And financial support is indeed vital for the many innovations that are necessary for the transition. So let's talk about information first. At the moment, information on the sustainability of financial products when available is at best inconsistent, largely incomparable, and at times unreliable. And that means that climate risks are not adequately priced, pausing challenges for financial stability. This is what I would call the pricing gap. We have in Europe a recent stress test that were carried out by the Dutch National Bank and the ESRB, and they point to marked impairments for banks and other financial institutions should a disorderly transition occur. So we're not quite ready. Disclutures of climate related information using standardized and commonly agreed definitions combined with improved data quality can help bridge that pricing gap that I just mentioned. One prominent example is the framework that was developed by the task force on climate related financial disclosures that gave birth to the TCFD. Now in addition to the 60 countries mentioned by Mark, around 1500 entities have now endorsed TCFD recommendations, representing a combined market capitalization of $12.6 trillion. And the supporting financial firms being responsible for assets of nearly $150 trillion. In the European Union, reporting is covered by something that we call the NFRD, which is the non-financial reporting directive. But believe it or not, climate change information remains optional in part because the financial impact is still not well understood. Yet while TCFD and the NFRD are the reference frameworks, there are plenty of other disclosure and reporting frameworks and we're talking about dozens and dozens of them and it multiplies requirements and increases reporting costs. So harmonization efforts are crucial to ensure a proper disclosure of climate related information. Actually a review of the NFRD at the European level is currently ongoing and the ECB will participate in that. We need a leap forward in reaching common technical reporting standards and increased data availability at a granular level, including as mentioned by Mark, adopting forward-looking and dynamic climate indicators. In that regard, I'm really happy that the European taxonomy regulation that entered into force on July the 12th this year marks an important milestone. More to be done, but it's a good one, because it enables a consistent way to classify green activities. More to be done, because it needs to be matched by a widely accepted and applied taxonomy of carbon intensive activities. Such moves would permit both lower reporting costs for firms and greater ability for financial markets to correctly analyze and price risks. Moreover, it is essential that climate risks are included consistently and transparently into credit ratings, if all investors are to incorporate such risks fully into their investment decisions. Rating gap? Well, the recent initiatives by credit rating agencies are certainly moving in the right direction, but still far too short of what is required. Making further progress may involve recognizing the obstacles they face, including insufficient information on climate exposures of rated entities. In this regard, more and better disclosures would support rating agencies in their effort. The euro system and the ECB at the center, by the way, all members of the NGFS, has advocated for mandatory disclosures of climate-related risks from a far greater number of companies, including non-listed entities. Climate change and its impact on monetary policy will be reviewed in depth as part of the ECB's ongoing strategy review. And interestingly enough, this exercise will be completed around the time when the new taxonomy regulation comes into effect in January 2022. More about that later. But achieving a successful transition to a carbon-neutral world requires more than just understanding the risks. It involves the wholesale transformation of the economy. Or as Lord Mayor said, we don't need to talk about the green economy one day. We only talk about the economy. We don't talk about green finance. We talk about finance. Innovation, which is what I want to talk about now, is needed to reduce energy intensity, to boost the effectiveness of renewable energy sources, and to scale up capacity for carbon capture and removal. There is a substantial role for the financial sector to play in fueling and accelerating the development of new firms and new sources of growth. By the way, and this is not incidental, this is critically important. In that way, if we can manage that properly, people employed currently in sunset industries can then transition to new, sustainable jobs that will become even more apparent and more urgent as we're going through this pandemic at the moment. Let me say a few words about the European Union. Because it has been at the forefront of the push for green finance. Europe is already the biggest region of issuance of green bonds and accounts for 48% of the outstanding volume and nearly half of green bonds today in the world are denominated in euros. The outstanding amount of green bonds issued by euro area residents has grown tenfold since 2015. And obviously, the issuance by the European Commission on behalf of Europe under the Recovery and Resilience Fund will push those numbers up. But green bonds may not be enough by themselves. Funding innovation needs to come from all market segments. Indeed recent analysis suggests that an economy's carbon footprint shrinks faster when it receives a higher proportion of its funding from equity investors. For those of you interested, the ECB just recently published that piece of research. This highlights the potentially supportive role that investment funds with ESG mandates can play. Such funds have grown globally by 70% since 2015 and 57% of them are actually domiciled in the euro area. Yet, and I come to the funding gap here. Financing through equity traded on public markets remains relatively uncommon in the euro area as does venture capital. The EU needs to close that gap too and be at the forefront of innovation in green equity financing, which involves fostering deep and liquid capital markets across Europe. Completing the capital markets union, B to green capital markets union is therefore a vital plank in financing the green transition in the EU. So let me conclude. Climate change is happening. Such a truism, but it needs to be repeated over and over. Whether transition to a carbon neutral economy takes place in an orderly fashion or in a disorderly one. There will be impacts on the financial system. But we should keep in mind that the consequences will be considerably worse if the transition is disorderly. And we should also keep in mind that finance can and must play a key role in fueling and accelerating an orderly transition. Financial institutions need to provide more complete disclosures of their climate exposures. And as a result, demand the same from their counterparties. And financial markets need to play a substantial role in accelerating the development of new firms and new sources of sustainable growth by supporting innovation and financing it. We are the ECB and throughout the euro system, we will be active participants and we are on that caravan that you talked about, Mark. Thank you for inviting me to address you today at the 2020 Green Horizon Summit, taking place as the world struggles to overcome the worst recession since the Great Depression. This year, we expect the global economy to shrink by 4.4% and it could have been much worse in the absence of the extraordinary and synchronized actions taken to date. Governments have deployed around 12 trillion dollars in fiscal measures and major central banks have expanded balance sheets by 7.5 trillion dollars. These measures have put a floor under the global economy and helped prevent the destructive macro financial feedback we saw in previous crises. And we are now projecting a partial recovery next year. It will be what we are calling a long ascent, an even, uncertain, prone to setbacks. Many countries will see long lasting scars from this crisis and will not recover quickly. Against that background, it is natural that policymakers are focused on near term policies to ensure that we remain headed in the right direction. But we must also seize this opportunity to create a more resilient and sustainable future. A great deal of fiscal stimulus will be laid on in the coming year. It will be critical to ensure that it is designed not only to boost near-term economic prospects, but also to address some of our longer-term challenges, including, of course, climate change. We estimate that financing of 2.3% of global GDP per year will be required to meet the goals of the Paris Agreement. So this summit has a well-chosen name, the pivotal role of finance. The good news is that public investment in support of the economic recovery from the COVID crisis can help us meet climate goals. In our latest world economic outlook, we show that the right policies can pave a road toward net zero emissions by 2050 and support the growth, jobs, and income equality that are needed for the recovery. Do both. Importantly, we show that well-designed carbon taxes paired with measures to cushion the impact they may have on businesses and consumers can deliver rapid emission reductions without major negative impacts on output or unemployment. To win the fight against climate change, we also must harness the firepower of the financial sector, and this means we need policies that nurture sustainable finance and mobilize funds for green investments. Let me mention three important policy areas highlighted in our recent Global Financial Stability Report where we would like to see improvement. First, regulators should promote the standardization and transparency of information about sustainable products to increase investor confidence and help leverage the trillions of dollars needed to achieve net zero emissions by 2050. Second, stronger disclosure standards about climate risks go hand in hand with taxonomies to provide reliable, comparable, and consistent information that is needed. To fully price in climate risk, investors need more than voluntary reporting. Third, international cooperation is needed to ensure consistency and avoid fragmentation of sustainable asset markets. On this agenda, the IMF is working closely with our global partners to harmonize existing frameworks and facilitate mandatory adoption of global climate-related disclosure standards. In just 12 months, we will meet in Glasgow for COP26. We have a chance to make it there with the record of achievements. This current crisis has confronted us with a sudden social and economic challenge. Getting out of it offers a unique opportunity for transformation, an opportunity not to be missed. To seize this chance for the sake of our children and grandchildren, we must act. We must act now. No time to waste. Thank you. Good morning. It's a pleasure to be with you this morning or by virtually from Brussels. Europe is experiencing a strong second phase of the pandemic, which shows no sign of abeting. Despite a strong rebound in the third quarter, EU GDP is forecast to fall significantly in 2020. And today, climate change is, understandably, not the most immediate concern for families whose loved ones have fallen ill, businesses trying to stay afloat, or workers on furlough. Indeed, according to the latest Eurobarometer survey, our citizens see the economy as the most pressing issue facing the EU. The environment and climate change have slipped from second to fifth place. And yet, the climate change clock has not stopped ticking. Against this backdrop, the EU has taken a strong stance. Supporting the economy and tackling climate change is not an either-or proposition. We will do both. And here is how. The European Green Deal we unveiled in December last year remains our growth strategy. It is our roadmap to transfer our economies and reach net zero emissions by 2050. This is more than just a political statement. We will shortly have in place a European climate law that makes this a legally binding target. Together with an interim goal of 55% less emissions by 2030. As you know very well in the UK, which adopted a similar law already last year, this provides the policy certainty that our businesses and investors ask of us. We are also entering the last stretch of talks on the EU's most ambitious budget for the next seven years. And fully 30% of our budget will be earmarked for climate-related spending across all areas. And we will soon close the deal on the recovery and resilience facility, which lies at the heart of the next-generation EU recovery plan after the pandemic. Under the facility, the Commission will raise up to 670 billion euros on the financial markets and make this money available to our Member States. It will be then up to each Member State to present a national plan for investing these funds. But we have made clear that the green transition must be front and center. At least 37% of this financing will need to support our climate ambition in a host of key areas, from renewables and grid infrastructures to energy-efficient buildings and sustainable transport. We have also committed that 30% of the issuance that will fund next-generation EU will be in green bonds. This would make the EU one of the largest issuance of green bonds in the world. And following the tremendous success of the first issuance of EU social bonds in October, I am confident that we will be able to achieve this target, too. We have put on the table a substantial amount of resources. We want to seize the opportunity offered by the recovery plan to forge a sustainable future for our continent. However, we are well aware that the systemic modernization of our economy, industry and society will require even more investments. Our estimate is that compared to the previous decade, we will need an additional 350 billion euros of energy-related investment each year to meet our 2030 emissions target. That's about the GDP of Ireland in additional investments every year. The green transition will only succeed if we manage to mobilize private sector finance as well. Our task as policymakers is to provide a framework that sets the incentives to direct investment strategies towards the green transition and EU climate targets. The climate law, I mentioned earlier, is one way we can steer the direction of travel. But let me share some other examples. First, our European green deal has an investment arm. That by leveraging a guarantee from the EU budget will allow the European investment bank and other implementing partners, in particular national promotion banks, to invest in higher-risk projects attracting private investors along the way. We have seen this work successfully already with its predecessor, the so-called Junker plan. Second, the recently adopted EU sustainable finance taxonomy will be a tool to help channel private savings towards green investment and companies. Third, we believe that taxation can play a key role in sending the right price signals for sustainable behavior by producers, users and consumers. This is why next year we will present a proposal to revise our energy taxation directive, which is no longer fit for purpose. We will also propose a carbon boarded adjustment mechanism to ensure that the price of imports reflects more accurately their carbon content. By offering better access to the single market to greener products, we can also spread the green transition beyond our borders. Ladies and gentlemen, with one year to go before COP26 in Glasgow, we need to bear in mind that meeting the goals of the Paris Agreement is a global effort. The EU and the UK have led the way with their commitments to net zero targets by 2050. But we need others to follow. And it is encouraging that in the last few weeks, some countries, for instance China, Japan, South Africa, South Korea, have made similar pledges. The green transition is often portrayed as the industrial revolution of the 21st century. The financial sector was instrumental in financing the first industrial revolution. It will be as crucial for the green transition. So I am looking forward to the discussions and the ideas that will emerge from the next couple of days and wish you all a very productive conference. Thank you. Thank you Lord Mayor for your very kind words of introduction. It's a real privilege for 91 to be part of this very important summit. Financing society's mission to decarbonise is probably the most important task of our generation. And as finance professionals from all corners of the industry, we have a critical role to play in making this happen. May I also say Lord Mayor, that it is really pleasing to see how seriously the city is taking this mission and how active you and your colleagues are in leading the discussion, specifically on the financing of decarbonisation. And you are not only leading the discussion, you are leading in action. The City of London Corporation's net zero commitment by 2040 shows this. The financing challenge that we face is enormous. You will all hear this time and again in the coming days. But I ask you now to take a moment to think about it in context. The experts tell us that the financing required to clean our supply side energy system over the next 30 years is anything between $100 trillion and $150 trillion. I am going to say that again between $100 trillion and $150 trillion. If we go with the bottom end of that range, $100 trillion, that is around $3.5 trillion a year. Some broader context to help us all understand the size and enormity of this challenge. The total market capitalisation of all of the world's equity markets, as reported by Bloomberg at the end of 2019, was approximately $90 trillion. The total assets under management of all of the world's pension funds and sovereign wealth funds, as reported by Willis Towers Watson, is approximately $60 trillion. The world's total mutual fund assets under management amount to nearly $50 trillion. The total amount outstanding of the world's global listed bonds is close to $130 trillion. Finally, the total global lending market is estimated at close to only $7 trillion. As you can see, meeting the challenge of decarbonising our society, achieving the mission is therefore not about marginal change. It is not about waiting. It is not about over-analyzing or seeking out the perfect data set. It's about taking action now, meaningful action, significant action. In years past when groups such as this have come together to debate and discuss the climate issue, there has always been a question mark. Is it real? Do we need to take it seriously? How can we quantify the risk? How can we understand and capture the prospective returns? I'm happy to say I think that this debate is over and that everything that is now going on in the world has galvanised all parts of society to take action. We must not underestimate our power to have impact. The investment opportunities are profound and it is becoming increasingly clear that we do not have to sacrifice returns to do the right thing. To this point I would like to share a personal experience that whilst shocking has given me cause for hope in our ability as humanity to face this challenge and to achieve the decarbonisation mission. Our firm 91 has unique routes having started our business as a domestic investor in an emerging market 29 years ago. Today we are a global firm but we have a deep commitment to our roots and origins in Africa. Our African hub is Cape Town where I live and where I talk to you from today and as you may know that in 2018 Cape Town experienced one of the most dramatic water crises ever faced by a major city on the planet. After three consecutive years of two standard deviation low rainfall the city faced the approach of day zero. Day zero would be the day on which the water would stop but day zero never came not because the rain came but largely because the community took action. Water consumption dropped by almost 60 percent from 1.2 billion litres per day to 500 million litres per day. Every person from every walk of life took up the challenge. We spent hours in queues filling water containers from local springs. We bathed, showered and flushed our lures all with less than 50 litres per person per day. The community understood the threat and acted. The crisis was averted. My messages from this experience are relevant to all of us. The crisis is real. It is not distant. It is not average world temperatures that never affect us. It is not the academic debate about whether divesting is right or wrong. It's here. It's in our own backyard and we will all experience it in some shape or form in the coming months and years. This I think we all know. What this example shows us more importantly is that action can make an impact and moreover that action starts at the very lowest level with each of us asking ourselves what we need to do. If we do take positive action we can face down this challenge. In our view too much of the decarbonisation debate and consequential implementation has focused on negative action. How do we divest? What should we exclude? How do we screen? But negative action is not enough. All of the experts tell us that positive action is critical to achieving the decarbonisation mission. What is positive action? As investors positive action is the allocation of capital to businesses, assets and projects that deliver a decarbonisation outcome. It's not that difficult and in addition it could be a very significant driver of future returns. So how are we doing in respect of positive action? Well I'm afraid to say not well. The PRI have confirmed that of the approximately 100 trillion in global investment assets only $1.3 trillion is allocated to positive action strategies. I'll say that again of the 100 trillion only $1.3 trillion allocated towards positive action. The share action and asset owners disclosure project estimates that the world's 100 largest pension funds are investing only 1% of their assets in low carbon solutions. In 2018 the Climate Policy Initiative estimated a total of $579 billion was invested to finance decarbonisation. And if you'll remember this falls well short of the needed 3.5 trillion per annum. So there is a lot for us all to do and it requires more action than we are probably comfortable with. In the investment ecosystem more concerted action could mean. For all asset owners, pension funds, sovereign funds, insurance companies and individuals consider whether you are doing enough to allocate capital specifically to investments and investment strategies which will support and benefit from decarbonisation. Exclusion is not enough. For the asset consultants, do you have a clear advice framework for pension funds who want to allocate more to positive action investment strategies? Have you considered these strategies and the role that they can play in fund portfolios fully enough? A leading consultant recently released a thought piece that suggested on return prospects alone, a sample portfolio should be allocating up to 10% of their assets to positive action investment strategies. Asset consultants are a critical part of this mission. You advise and guide key asset owners. Form a strong view on how to invest to positively support decarbonisation. For asset managers, we have to do more and better. We have to understand and price climate and sustainability risk in all of our investments. We have to engage smartly to drive change in a constructive and effective way. We have to reject box ticking in favour of substance and we need to develop more investment strategies that are dedicated to positive action. This kind of change is change that happens once in a generation in our industry. In the 1970s and 80s, we saw a decline in the direct ownership of equities by individual investors in favour of funds. That was a significant change. In the 2000s, we saw the rise of diversification evidenced by a decline in home bias as well as the growth of alternative investment strategies. In the coming years and decades, it is mobilising finance for the challenge of climate change that is going to be the defining issue. Financing decarbonisation is critical to our future's humanity. It is not going away. It will not cease to be relevant until climate change ceases to be relevant. The good news is that as was our experience as residents of Cape Town, if we all do our part, this is mission possible, not mission impossible. In closing, as we go into two days of deliberation, discussion and debate, I would ask you to reflect on the enormity of the challenge and in doing so consider Sir David Attenborough's words and I quote, this is not about saving our planet. It's about saving ourselves. It's not all doom and gloom. There is a chance for us to make amends. All we need is the world to do so. Thank you. Good morning, everyone. I'm Liv Garfield and I'm delighted to be here with you. Quite an exciting panel of set of three distinguished guests. So let me use my three guests to talk about how we mobilise finance for the greener recovery. First up, we've brought David Shriver, he's Chief Executive of the London SOC Extension, now he's a 20-year veteran of Goldman Sachs. He's somebody whom I'm told speaks fluent Russian. I'm not going to test him now and he's a fan of the New York Mets. My second guest is Jess Daly. He's the Chief Executive of Barclays. He's a 34-year veteran actually of JP Morgan before that. He's actually a fan of the Boston Red Sox, so we'll see whether we get any tension there, but hopefully. And apparently he speaks pretty impressive Portuguese. And last but not least is the lovely Angela Darlington. She's the Chief Executive of a Beaver Life. Now, she's an actually by background. She's a very celebrated LGBT role model and is a graduate of Borek University, which means that Angela at least had the good sense to drink fantastic drinking water, but at least the early part of her life round in the UK. Now then we've got just over 30 minutes for this conversation, 35 minutes. We haven't got Jess unfortunately for all of it, so we're going to make the most of him in the upfront part. So this will start off actually and I'll take the chair's prerogative and begin to quiz our three lovely people. So Jess first. So we're constantly told aren't we that there's lots of cheap money out there that's looking for a good home to go to. And as such, it'd be lovely to understand how the market is going to factor in long-term environmental costs, but what else can we do with our capital to make it work for the green recovery? One, it's great to be part of the green horizon summit and appreciate the invitation to join this panel. Things that clearly we are seeing is a very, very liquid financial markets and very liquid capital markets, which is quite fortunate given the tragedy of COVID-19. Interest rates are low, the markets are open, investors want to put money to work. And fortunately that has coincided with I think the initiative across the financial control to support a move towards the Paris Accords and through a greener society overall. So you listen to the speakers this morning from the World Bank, from the IMF, the numbers are quite astonishing in the manner that has been raised. And so I think the financial community, given that we touch virtually every activity or every economic activity, the impact we can have if we work together as Mark talked about in moving the green agenda, I think will be quite extraordinary. And Angela, so you invest I guess on a daily basis, obviously not all personally, but billions of pounds of money to get the best deal for your business. What are the two or three things that the company was watching today that they wanted to catch your eye? What would be those cover things particularly related to green violence? Yeah, thanks. And like Jess, I'd like to say thank you for inviting me along to the summit today. I think we're looking for a couple of things. I think we're increasingly looking for companies that properly understand and disclose the sustainability and green issues in their business model. But also moving on from that now to companies that are genuinely taking action against those disclosures. I think disclosure analysis has really become the absolute baseline now for companies. And Mark Carney and the PRA have really shown the way with things like the TCFD disclosures. And I actually, I sit on a scenario analysis workgroup for the PRA and FCA that's looking into trying to get more people able to consider at least the physical and transitional climate risk in their business. Because it's difficult to model, but we are now desiring actually demanding people to have that. And we see it as our duty to our customers to collect that data, to analyse it, to use it, to understand the long term impact of the risk of the green risk on our investments. So absolutely, bedrock is the analysis and disclosure. But I think that is now the starting point we are looking now for real credible plans showing alignment to Paris. So disclosure is not enough anymore to get our attention. Really, we want to see, we're as a global investor, agreed that we will transition our investment portfolio to greenhouse gas zero by 2050. And so we need to be looking at companies who are on that journey with us where we're investing. So we're looking for companies that can demonstrate tangible actions to take their businesses in line with the Paris Agreement. And to be honest, companies that can't do that will be be left behind as we're looking to invest in companies that are on that transit trajectory. So first disclosure analysis, secondly, absolutely action. So before I jump to David, just back to you for a second off the back of what Andrew just said. The Barclays has announced hasn't it, that by 2050 that you're looking to make sure that all investments across the piece are net zero. So if you were to invest or to loan money to a company, which isn't by then net zero, you'd have to be loaning, I guess, an increased amount of money involved in a company that, for example, has hit its target early. Can you walk us through? That's obviously going to make a big change. The thought process around that and how you see that playing out. Yeah. So earlier this year, that our ambition to be a net zero bank by 2050 and that that's not all scope one, scope two, but also scope three, i.e. the companies that we're seeing are also net zero. We require a lot of transition. And we've also stated that by the end of this year, we're going to lay out for our stakeholders how we intend to align with the Paris Accord, which I think is something that will be critical as the global economy transitions to a net zero environment. One of the things that we're hoping to be part of is trying to get a consensus around how we identify, how we model the transition to a net zero economy. And we want to put out very clear targets and we'll do that by the end. Obviously, I think initiatives that have been talked about already that Senator Carter and Bill Winters around a market for carbon offset will be very, very important. And we think that market will be one of the important vehicles as we all move to be aligned with the Paris Accords. Very good. Now, look, David, I've done a bit of Google stalking of you over the last couple of days as I began to pull together my panel. And there's no doubt that you've got a very nice international perspective. And it would be good for you to almost give us a bit of a sense that as the UK, when you look at us and get ourselves set up for that green recovery, what do you think we should do as a nation to maximize the opportunity for green recovery to be right at the heart of economic recovery? Thanks, Liv. And it's great to be here with you and Angela and Jess. When I moved to London to become CEO of London Stock Exchange Group a little over two years ago now, I was struck by how many city institutions were trying to make progress on ESG and by just how active the debate about sustainability was and is in the UK. My sense is that the UK is very well set up to mobilize the green recovery. Historically, the investor and issuer dialogue on sustainability has been strong. The focus of UK and international regulators has really helped to advance the agenda with the UK at the vanguard. At ELSIG, we're using our expertise and our long-standing relationships with issuers and investors to play an even greater role in the transition. We've developed a range of products and tools, many of which are focused on climate risk disclosure to help our issuers and global investors meet the challenge around climate change. And one example of this is the green economy mark, which we launched just last year to acknowledge companies with more than 50% of their revenues from green economy sources. And we now have 87 listed companies that have been awarded that mark with a total market capitalization of about 160 billion dollars. And this year, the London Stock Exchange has helped to issue over 69 billion pounds of COVID-19 response financing. That's a market segment that none of us would have imagined 10 months ago. And just to put that into context, that compares to about 15 billion pounds of green social and sustainability bonds issued over the last 12 months. So there's no doubt the UK is helping to set the global direction of travel in this area. We support that and we're proud to be helping the UK be a leader in this field, but always with a view to raising the bar globally while maintaining the UK's competitiveness at the same time. We're also engaging with the FDA as it seeks to move forward in this area. Regulatory, maybe I'll just close with a thought on regulatory focus. It's really important and done right. It can drive globally consistent ESG data disclosure. Financial markets have been pretty effective at encouraging disclosure on climate issues, for example, carbon emission reporting, green bonds and green taxonomies. But going forward, maintaining and strengthening collaboration between the market and regulators will really be critical. So with this real sense, and I think all of you are right that we are seeing a lot of debate in the UK outweigh from an ESG perspective. We're seeing lots of companies transform their business models as they begin to embrace it. So Jess, do you think with the focus being very much on green finance today, a whole three-day summit about it, do you get a sense that non-green finance is going to become prohibitively expensive in the future? Well, I do hope that we get a carbon offset market functioning so we can give a market to determine value to green non-green. I think that would be a step forward. There is another part of the Paris Accord, which is to try to lift a billion people out of poverty. And there will have to be a transition period as we arrive at net zero by 2050. But for sure, the markets will respond to moves in society, to understanding where risks are. I mean, I think we recognize that the climate change is an existential risk. And I think investors in the financial market overall is moving to an acknowledgement of that. So whilst I don't think you can turn off in one shot, I do think over time the attractiveness of inventory will be more and more obvious. And the challenges of non-clean energy will also grow. So sticking with this future trends suggestion, then to David, do you get a sense, as you began to touch on it there, that the COVID impact is going to be a rise in the green economy? Or what's your sense of the connection between COVID and the rise of the green economy? So initially, there was a lot of concern that COVID would halt momentum on ESG and on the rise of the green economy. But counter to that, what we're seeing is that COVID may actually be accelerating the integration of climate risk into investment strategies. And in fact, our view is that the recovery will likely increase demand for sustainable and climate resilient investments. Now I'll share with you some early indicators from the past several months. Our green industries index, the FTSE Environmental Opportunities, has delivered returns of 12.7% for this year through October. And that compares with returns of negative 1.3% for global equity markets over the same period. Just another bit of data, UK green issuers, as defined by the green economy mark, have collectively outperformed the FTSE all share index over the past two years by 36%. While markets have experienced a lot of volatility this year, green economy mark equities have demonstrated greater resilience and subsequently recovered faster than the rest of the market. So time will tell whether this is an enduring theme, but it really is a positive short-term indicator. Now, as well as the rise from the E part of ESG, we've obviously seen the S become increasingly discussed as well, Angel, and I think Aviva have been a heart of that debate to be fair over the last few years. So do you perhaps see something like social finance maybe beginning to be as talked about as the green finance idea, maybe companies opening up more to being socially purposeful? Is that a trend you're seeing? Absolutely, and I think for us it's always been about the whole ESG, not just green. We often talk a lot about sustainable finance, and that includes these much broader social and sustainability issues that you mentioned. And I think increasingly investors are looking to things like the UN sustainability development goals and saying, well, how does what you're doing align to that? And how can we measure progress against that broader set of goals and I think hard as it is actually metrics on climate change are a little bit more advanced than some of the other metrics that we might need to measure things. But we absolutely think that's going to change in the next few years. If you look at the EU is changing their taxonomy of sustainable activity to include social issues. The UK Treasury is examining things like the economic value of biodiversity. So you can really see cutting edge thought going into those broader social and sustainable aspects, not just the green elements. And so I think, you know, those sorts of government measures, as David says, can really drive changing here and can enable those of us who are looking to invest to analyze the risks and invest with much more confidence in some of those areas. So I think again, all companies that are the front of this that they're disclosing that they're demonstrating tangible action in all of these areas I think is all very interrelated in our assessment of the risk of businesses in the long term, which is after all what insurers are looking for. So we're beginning to get some questions coming through. Now this is the bit when it goes a bit wild because I've got to share real life questions to my panelists. So they're going to be on the edge of their seats now. So the first one coming in, there's a few on obviously election and thoughts around whether that makes any difference. So obviously with both David and Jess on, we'll look forward to quizzing them. But just before we do that, Jess, what are the barriers for setting up a global carbon offset market that's come from Amy and reveal the state? Yeah, I don't think that there is a barrier. I think what you, you know, market is a, and David knows this is the LSE better name, but a marketplace is where buyers and sellers come together and find a clearing price where you've got a balanced level of supply and demand. And what I think it's going to take or major institutions like people at this summit, major banks, major exchanges, major investors, recognizing that a market will benefit all of us. And I think I'm going to develop, and I think it's going to develop reasonably soon. So I don't think there is much impairment. One of the questions is how much involvement should there be from governments and regulators? I think to a certain degree that would be very helpful. But I think a market will develop reasonably soon. Now I think as we repeatedly said, the link between government and private capital to create the green economy is essential. And of course we have seen, or I think from the customer seeing, a major government change certainly in the states. And as we head towards COP26 next year being hosted in Glasgow, an important moment for us as a nation to put ourselves on the mark and to make, I think, a really big splash around the economies that we've got here, the sectors that we think we are leaders in. Do you believe that there's been a change, I guess, David, first as a result of possibly a new president? Will that make a big difference to America's contribution to the climate debate? So short answer is yes, big change. I think the fact that the timing is actually pretty remarkable in terms of the U.S. leaving the Paris Agreement a couple days ago and then President-elect Biden indicating that it will be one of his first actions in office. So I think the U.S. obviously large global economy, large contributor to emissions, huge impact in terms of having the U.S. joining the effort to deal with climate change as opposed to being out there on its own. And Jess, any questions to yourself? Yeah, thanks. I would echo David's comment. I think the election is a significant move. What COVID-19 in part is showing is we are on this together in getting a major economy like the U.S. aligned once again with the Paris Accords, I think, is quite a significant and a positive step. Now leadership, whether it's leadership from the head of a government or whether it's leadership from a chief executive in a business, we know that it can make change really happen. We know that we can see leaders of a company accelerate a path towards a new strategy or, of course, towards sustainability. And the companies that typically, I guess, are leading on sustainability in ASG matters, there is genuine belief right at the heart of the chief executive. So I guess Angela, first with you, obviously with ESG and Green Finance all the way around each, how do you make sure that when you're examining a company that it's not a passing fad, that it's not just greenwashing and lip service, that you really get confidence that it's right at the heart of the DNA of that company? That's a great question, isn't it? And I think it's definitely not a fad for us. If we look at Aviva, we've been around for 300 years. We have an intention to be around for 300 more. So we need to be caring about respecting the environment and protecting the environment that we're working in. So we started 2006. So this is not something new to us. We were the first carbon neutral international insurer in 2006. In the same year, we helped develop the UN principles for responsible investment. So I'm not sure I see it as a passing fad. I see it as something that's been at the heart of our business. As you say, if we care about it, CEOs can really drive change on this. And we're working around the world to help regulators and governments and companies. And partly that's because we care about it, but actually it's also because our customers are demanding it. If you look at the change in demographic of sabers, we did a survey and of those people that were due to retire in the 2050, so in the timescale that we're talking about, so they're currently 25 to 34 today, 77% of them are concerned about climate change and a third of them are extremely concerned. So the people who are saving the people's money we are investing really, really care about that stuff. And we think it's our responsibility to make sure that we do that. And 59% of those people think that it's important that pension funds become net zero by 2020. So they're a really, really important part of people saving. And two thirds of millennials thinks that the government should make pension funds be net zero by 2050. So there's a huge amount of demand out there from our customers to make sure that we uphold our premises to get to net zero by 2050. And not just our customers, but we see it from the government and regulators. The PRA are expecting banks to disclose on climate change, they're stress testing us on climate change. The EU has got really ambitious plans on promoting sustainable finance. And you see that replicated around the world as more countries commit to be net zero by 2050. So in the UK, we've seen Japan and South Korea in the last month, and governments are basically looking to private investors to play a part in that transition. And I think hopefully we'll see more positive views from the US, we're seeing more positive views from China. And yeah, as a UK investor, we invest all around the world, and it's very positive for us to see those changes. But I think, you know, not to be a passing fad to make sure that we're keeping an eye on what's going on, there's still much more that we can do. And it's really notable, notable that the Paris Agreement doesn't have a finance plan. And that few countries who've made their statements about being net zero actually have a plan to collect the capital they need to deliver on those commitments. So yeah, we'll be calling on the UK government at COP 24 to launch that climate finance plan that brings together bridges, you know, what countries are promising and promising and private capital to make sure that those countries can fund their climate pledges. And again, it's making sure that there's action is sufficient for the scale of the challenge that we have ahead. And we need to come along with that. So I've got four minutes left to further a few questions at Jess before he leaves him. So the first question that Jess has, of course, in an ideal world, I think companies need to try and find a sustainability plan, which is commercially strong for their future at the same time as being fantastic for the planet. Of course, equally, there are sometimes some moments when you know it's the right thing to do as a leader to make the trip the call, but you know it actually will cost your company money in the short term. Can you give us a sense of how Barclays deals with those dilemmas in any examples? Either of things you've done that, you know, will cost your money in the short term, but are good for the long term or vice versa where you can see it's a commercially good solution and good for the planet? Yeah, we've already taken moves to remove ourselves from financing of things like thermal coal. And there's been an economic loss for us for doing that. But I think in the world today, we all recognize that there is a social obligation we have as an institution. I think as was said earlier, the millennials are very much invested in this approach to running an institution or a company. So it is part of our purpose as a firm, as I've talked about earlier. So it's valuable, it's important. Ultimately, we're all in the same boat in the long term and being socially responsible and responsible for the climate is I think something that an institution like Barclays, which has been around for 330 years, needs to project. And my last question before we lose you then. So one of the things that I think people love when they get a chance to come along and listen to three brilliant leaders like the three of you, is they want to know what's on your mind. They don't just want to know what's like the corporate answer to the topic. They want the insights. They want to save consultancy costs by getting those insights. But they also want a flavor of the person. So if you were to just share with everybody done today, what's the thing that's on your worry list that kind of keeps you focused? And what's the thing that says, okay, here's a positive sense that I'd love Jess just before he leaves us just to share what's on his worry list and what's on his happy list that gives him hope for the future. The worry list for sure is COVID-19 for all of us. The tragedy that is happening across the world is quite something I think on the personally it's my my wife and kids hoping that they're happy and healthy. I think on the positive side is it is extraordinary how societies, particularly the UK has come together in this pandemic and that we are having a virtual conversation about the environment with all this, you know, use of technology. We're going to overcome this. Thanks, Liv. Thank you very much. Bye, Jess. Right then. So with my two other partners, I've now got loads of questions coming in far from the audience. So Robert Merritt is asking Angela to yourself, what is the one measure your institution uses to track progress against positive action? So one measure only. Well, we use a few, but if I was to pick one, I think it's the it's the warming potential of our investment portfolio. So it's a number that we show in our TCFD and we compare ourselves to the index and our numbers we show publicly sits at 2.9 degrees and we think that the benchmark, the index is about three and a half degrees. So I mean, that's a modelled number. So you can't take it as me. Absolutely. What we look to be is, you know, better than the index. And so that, you know, that ability to make that calculation allows us to look at our portfolio and see where areas where we could have better climate outcomes. So I would pick that one. Brilliant. I didn't know that, so I'm feeling Julie educated myself. Okay, David, so Richard McWilliams from TNT is asking, so what is the global value of mispricing risk arising of lack of visibility of climate risk on assets? I didn't say they were easy. Well, I'm certainly not in a position to put any numbers on it, although I'm sure there are some good estimates out there. I do think that we are at a critical point right now in terms of getting to a place where we can have some alignment around disclosure standards. And as we get that alignment and there are many different efforts to try to get to that alignment, and we've got the EU taxonomy, other jurisdictions are working through that. The IFRS Foundation is getting into or thinking about getting into the process here. I think it's really important if we can get that kind of alignment so that we can on a global basis get the kind of disclosure consistent across different jurisdictions. And then the kinds of calculations to address that question can really take place in a credible way. I'm sure there are plenty of calculations around that today, but so many assumptions need to be made because of the variety of different aspects or kinds of disclosure that are out there, the lack of comparability. So if we can get to standard frameworks, standard disclosure, and really have a comprehensive approach on a global basis across different jurisdictions, we will actually have real data and capability of answering a question like that. Brilliant, genuinely, I thought that was an excellent answer. So I didn't ask the question, I would just like to make that clear. This was a much better question than I would have come up with. If we think about recovery, and recovery is one of the things that I know is on the mind of every chief executive at the moment, is how do we end up growing back stronger? And it's hard to see right now when we look at the scale of impact that COVID is having, and the scale of the recession that we're within. But I suppose all of our minds are focused on what can we do? And I think it has to be a partnership between private sector and between public infrastructure. And we've got a question here from Rufus, from Bankers Without Borders for both of you, which is one of the few things, the two or three things that we think will help mobilise private sector finance to help develop public infrastructure. So, Angela, should we start with yourself? Yeah, and infrastructure is a really interesting thing for insurance companies, actually. Because you would imagine that we are naturally good investors in this area. We have a very long-term time horizon, and we have illiquid assets, which means that we don't worry so much about the liquidity of these assets. So, it's something that's very close to the heart of insurers. And in 2015, we actually set ourselves a target of investing about two and a half billion in green infrastructure by 2020. So, theoretically, this year is the year that we test ourselves against that. We actually smashed it, because we invested 3.8 by the end of last year. So, we're working on setting ourselves a new target. But 3.9 billion is a big number in terms of recovery. That's good that we invested that in the market. But if you look at it as a proportion of our overall assets, it's actually relatively small. And I think a large part of that is to do with the regulation framework that we have, which definitely has a better capital treatment for things like corporate bonds than it does for long-term infrastructure. So, one of the things we've been looking at with our regulator is if there's a way that we can not incentivise the system, but you can recognise, give some benefit, some kind of scaling factor in the capital models that rewards those portfolios, which are better lined with the Paris Agreement. And I think that requires some good structures, some good modelling, some good risk assessments, some ways of measuring these things. But we certainly think that green investment is one of the areas where you could quite easily say, this is generally a good thing for climate and therefore there's a kind of like a credit in the capital model that gives you some value and some incentive to work on that. So, we'd love regulators and governments to think about some of those slightly more innovative ideas that go slightly off-piste of our capital models, but really make sure that we're positively influencing money to go in that direction and ensure there's a great source of that money if we can sort out the regulatory position. And, David, you get a unique view, having the chance to look at all of the various listed companies and different infrastructure types that you have available. What would your thoughts be? So, there are a number of different aspects to this. I think some of the comments Angela just made, I agree with. I think the notion of partnering with government and regulators is really important. The notion of having good information, good disclosure, also really important. A couple of things that we're trying to do to help mobilize private capital and allocate more as appropriate to whether it's infrastructure, whether it's other green initiatives. One of the things that Mark Carney and I did over the summer, we sent a letter to the heads of exchanges around the world. Exchanges, as you know, are gateways to capital, if you will. Issuers come through us to get access to investors and investor capital. And we're working with the UN Sustainable Stock Exchange's initiative to have exchanges around the world align their disclosure standards using TCFD as a framework. And we're hoping to come up with model guidance in the spring and summer of next year in advance of COP26. So, I think it's efforts like that, where you have a partnership between market infrastructure, some governments, some NGOs to help the private capital that is out there and eager to participate in this transition, find the appropriate investments through better disclosure standards. So, that's just one possible example for that. Very good. Now, balance sheet is a big debate, isn't it? We've obviously lived through previous financial crises, and it's been a big topic of conversation that's covered often in the press. So, Angela, when you think about companies and you think about balance sheets, and given the circumstances now, where we also do need to recover and come out of an economic situation, is your sense that it's now the time to kind of go for it and go big and invest, or should we continue to maintain our relatively conservative balance sheets in the UK? Any thoughts on that? It's a very good question, isn't it? And actually, if you look at balance sheets at the moment, they've probably got two tests coming up. So, you've got COVID and you've got things like Brexit, which creates a huge amount of uncertainty. So, I think your companies will be testing that on a very, very ongoing basis, I would just expect over the next six months. I think where there's opportunity to go for it, making sure that we're really investing in climate friendly and social friendly investments as we come out of this, it's going to be a huge, huge part of making the most of the challenges we have ahead. But it's also quite understandable at the moment, many people are very cautious about the balance sheet positioning. So, I think it's going to be a fine balance, and I'm not sure it be an either or. I think it will be about making sure that we understand how companies are balancing those two things as they're transitioning for the next six months, I would agree. Now, I guess, David, in my world, I've always imagined that the chief executive of the stock exchange must have the chance of more speed dial, and so can just very casually pick up the phone and say, wish you have got some thoughts for you. So, assuming that you were to kind of like contact him later and say, here's my top couple of tips as to how I think you should achieve an economic robust, but also environmentally very friendly, set of recovery, what would be the couple of things that you would chat to Richie about in that kind of context? I would, I'd advise the chancellor a couple of things. I'd advise the chancellor to work in partnership with other countries on all of these issues on sustainability, and really focus on the consistency of policies on climate risk disclosure. And just to be explicit, I think the EU, the US, and China are all critical in terms of maintaining or building that kind of alignment. Number two, I would encourage him and his colleagues in the government really to aim high for the UK's COP26 presidency. This is some once in a generation opportunity for the UK to really drive lasting global collaboration on climate risk disclosure and advancing shared global policies. And maybe a third, I would remind him to be careful about balancing competitiveness with sustainability, not to say that it's not a trade-off, but I think it's important for the UK to be a leader in this area and to continue to attract business and compete globally. So the key really will be for him to ensure that other countries are keeping pace with the UK's leadership. Brilliant. Now that I'm glad about that was my last question, so now we're just going to wrap up and I guess I'm going to ask you guys the same question that I asked Jackson, obviously every leader has got a series of things that they're worried about and a series of things that they feel good about the future. It'd be good to get a bit of a personal insight from each of you. So start with Angela, what's top of your happy list and what's top of your worry list? I'm guessing at the moment is, you know, happy list is definitely seeing some opportunity in where we are at the moment. The worry list is definitely COVID-related. I mean, we're an insurance company, so we've got so many ways in which that influences our strategy and what we do. But I'm so impressed by how well the financial system has coped so far and that does give us hope. I think if you look at, yeah, and I think we've experienced some things which we didn't know we could do, we said we didn't know we could work from home, we didn't know we could be flexible, we didn't know that we didn't need to travel as much as we did. And all of those have used well, I think, give you hope that we've experienced something new in these really difficult dark times that gives you hope that we can come out of this in a slightly different way and that can really help the climate change transition that we're all working on. So yeah, hope in the dark times. Very good, and David. So on the worry list, I'll add to the COVID aspect, but really concerned that once we're past or really recovering from COVID, and I look forward to that being in the coming months, but we'll have a real exacerbation of inequality and social inequality. And I think that's something that we're going to have to really focus on and work hard on. On the happy list, I would say, and as an American, I was pleased to see how well democracy actually worked last Tuesday. Of course, it's been a little bit messy. Of course, there's a winner and a loser and the winners are elated and the losers are disappointed that's the way the system works. But given all the concerns, I think it's nice to see how well it actually didn't work as a process and as a system. Well, I've had a thoroughly lovely 35 minutes sharing that. So a massive thank you to my three panelists. And I think we've learned some really, really exciting things from the course of it. But the overwhelming thing for me is the fact that I think business leadership in the UK genuinely is committed to environmental leadership. And COP26 is this momentous opportunity ahead of us. And I think you've heard from four of us today, we're excited about the opportunity that brings and how well the next three days can play out as we talk about green finance site. Thank you very much. Thank you. The world came together in 2015 through the Paris Agreement to commit to limiting the global average temperature increase to well below two degrees. To achieve this goal, the world is going to require trillions of pounds every year to invest in and support this transition. And the primary source of that investment will be financing arranged by banks such as Barclays, either through loans or through capital finance activity. Earlier this year, Barclays announced its own ambition to be a net zero bank by 2050. And we've also committed to aligning all of our financing to the goals of the Paris Agreement. At the same time, we committed over 100 billion of green financing by 2030 and 175 million pounds of our own investment into green innovation over the next five years. Through the financing that we're doing, we've so far been able to help a wide range of our clouds across many different sectors, including a company called Virtual Tea, a fifth generation family-owned tea business, who we've had a relationship with for over 45 years. We've launched a sustainable banking and impact group, which will help originate and execute green, social and sustainability debt financing. Because we genuinely believe that by harnessing the power of Barclays, we can help our clients succeed in their own transition plans. And that will help us achieve our ambition of being a net zero bank. Well, it's a great pleasure at least to have the opportunity to meet virtually today. I want to focus on how we ensure that in the face of COVID, we focus on the vital subject of tackling climate change and the role of the financial system. But first, I want to say what a pleasure it is to be sharing a platform today, at least so to speak, with Mark Carney. As I've told Mark on quite a few occasions, timing is everything. And midnight on March the 15th was an interesting choice of date to hand over as governor. But let me also say that in everything that has happened since at the bank, we've benefited from the many things that Mark did during his term. And for that, we owe him a great thanks. Mark has gone on to push forward his deep commitment to tackling climate change and the role of the financial system in doing that. There have been times since March when we've faced very stark decisions in the face of the COVID crisis. We decided in the spring to prioritise preserving people's jobs and livelihoods in this emergency. And as far as possible, the businesses that provide employment and the lifeblood of the economy. These short-term interventions did not discriminate on the basis of climate change. I believe that was the right response. In the face of such an emergency, and in all conscience, it was not right to say to people that they would be denied a livelihood because their employment was of the wrong source for the climate. And I say that very starkly because I'm not trying to hide from reality and we shouldn't. But that does not mean that we've abandoned our commitment to tackle climate change. And indeed, the UK government has made a firm commitment to transitioning the economy to net zero by 2050. And if we need reminding of the importance for the UK and the 125 other countries who've made similar commitments of delivering on them, this year we've seen record wildfires in Australia and California, record breaking temperatures in the Arctic Circle and of course the powerful witness of Sir David Attenborough. And these are a striking reminder of the need for sustained action by government, public authorities and the private sector. And it's important that even in the face of the resurgence of COVID and the necessary measures to tackle it, we plan for the future and act on these plans. We all know an economy-wide transition to net zero is a huge task, but our experience with COVID has powerfully demonstrated our ability to adapt, which should give us comfort that the task we face is achievable. And to illustrate the importance of getting that focus back, let me draw on a parallel from history. One of the most fundamental reforms, if not the most, of the international financial system was the Bretton Woods Agreement of 1944. Wisely, our predecessor did not wait for the Second World War to end to determine what the future should look like and thereby tackle problems that have beset the pre-war period. There are two strong messages from Bretton Woods that we should have at the front of our minds. Don't wait for today's problem to be over before setting the course for the future. And once again we need a multilateral approach and we have the opportunity to strengthen that multilateralism. But if you read the history of Bretton Woods, you learned that the agreement was not easy to reach. There were costs attached to it, which had to be met. It laid the platform for a sustained recovery from a terrible crisis. And there is a lesson in that story. So what are we as a central bank and regulator of the world's leading global financial centre doing to ensure the financial system plays its part to tackle climate change? Our goal is to build a UK financial system resilient to the risks from climate change and supportive of the transition to a net-zero economy. 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 challenge of those changes. And the financial system has supported the real economy in the crisis, as it must. So we need the 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 we're making progress. A mere five years ago, climate change was considered more of a charitable cause within the financial centre. Now, although it can sound prosaic, this progress has to focus on data and disclosure. The task force 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. And we're now working with the Treasury and other regulators to consider the UK's approach to climate disclosure. Disclosure metrics force us to confront the question of where we are and where we want to be, and therefore drive different decisions today. Knowing that we will be publishing our next TCFD disclosure in less than 12 months creates discipline and urgency. That brings me to the management of climate risks. Last year we became the first central bank and supervisor to set out supervisory expectations for banks and insurers on the management of climate risks. This year we went to CEOs with more guidance, putting in place a deadline for firms to meet our expectations by the end of 2021. Now that is no easy task and that's why we work closely with industry through the climate risk climate financial risk forum to publish a practical guide for firms so that they can implement changes. As a central bank we're not only concerned with resilience at the micro level but also at the macro level. And that's why in June 2019 we announced our plan to launch a climate stress test exercise. When the pandemic hit we decided to postpone the exercise in the light of the strain on firms resources and our own and to ensure the ambitious scope of the exercise could be maintained. We've used the extra time to continue our work on the design of the exercise and firms have been busy preparing for it. And today I'm pleased to announce a launch date June 2021 next year. The exercise will explore three different climate scenarios testing different combinations of physical and transition risks over a 30-year period. We expect to use the exercise as a tool to size the risks faced in these scenarios to understand how different bank and insurance business models will be affected and how they might respond. And finally as a way to improve risk management practices through the process of carrying out the exercise with firms. Building on feedback we received to our discussion paper last year ahead of the launch we will share with participants more detail on some key aspects of the exercise around data requirements and scenario variables for instance. This act of engagement with participants which we will map out this week will help build their assessment capabilities and prepare for the exercise. We're not going to use the results to size firms capital buffers but that does not mean that firms should not be thinking about near-term capital requirements. As we have set out in our supervisory expectations firms must assess how climate risks could impact their business and review whether additional capital needs to be held against this. Investments that can look safe on a backward look may be existentially risky given forward-looking climate risks and investments that might have looked speculative in the past could look much safer in the context of a transition to net zero. Uncertainty and lack of data is not an excuse. We expect firms to make reasonable judgments rather than default to zero. UK banks and insurance must work to develop these capital assessments over the coming year and we will be working in tandem to develop our approach to reviewing them. There is at least one further role for the financial system to facilitate investment in the economy to support climate change. The level of investment in the UK economy as a whole has been weak for some time and alongside this we've seen weak productivity growth. COVID has further hit investment including the investment intentions of firms. An important part of the recovery from COVID will be to stimulate and support investment particularly if we see some elements of structural change in the economy reflecting for instance the way we work. Investing to support the transition to zero net emissions will be a critical part of the recovery. Capital markets will therefore need to play an important part in the transition to a resilient carbon neutral economy. And to support this we need a strong focus on public metrics that set out the climate impacts of both investment and corporate activities. 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. And we will support the work to make this happen. So to sum up returning to Bretton Woods for a moment the UK economy and financial system is very open. 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 which were a co-founder and very active member. And where much progress has been made in raising our collective ambition of central banks and regulators as well as identifying best practice and identifying mitigating climate risk in the financial system. We would like to see greater ambition still including wider adoption of these best practices. And with that in mind that will be a focus for us when the UK takes over the G7 presidency and works closely with the Italian G20. And of course together we will co-host the COP26 next year. And we will take that ambition forward in the year to come. Thank you. Good morning. Today those of us in the UK find ourselves at the start of another national lockdown. And across the world the pandemic continues to impact the lives and livelihoods of billions of people. But while we deal with the crisis immediately surrounding us we cannot lose sight of the climate crisis ahead. That the last five years of the hottest on record only serves to underline the scale of the climate challenge. To tackle it we need to accelerate the transition to cleaner energy and a less carbon intensive economy. Finance will play a central role in that transition and good financial regulation internationally coordinated will be key to facilitating it. The FCA would like to help market participants manage the risks from moving to a low carbon economy while also capturing opportunities to benefit consumers. We want green and sustainable finance to be at the heart of the continued growth of London as a global financial centre. And we stand ready to support the UK government to fulfil its commitment to match or exceed the ambition of the European Union Sustainable Action Finance Plan. Our work to achieve these goals is underpinned by three themes by three themes that are shaping our priorities. The first is transparency. Market participants rely on high quality information to inform asset pricing, risk management and capital allocation. And consumers need clear disclosures so they can choose the right product. We have already seen how quickly climate related and other sustainability risks can crystallize and how big a financial impact they can have. For example storms Kiara and Dennis earlier this year cost the UK insurance sector over £360 million. While each individual storm may not be unusual there is evidence of a human contribution to the increase in extreme weather around the globe. That's why one of our key priorities has been to promote good disclosures right along the investment chain. We recently proposed a new listing rule which would require our most prominent listed companies to make better disclosures about how climate change affects their business. And to make these disclosures consistent with the recommendations of the task force on climate related financial disclosures the TCFD. This will cover two-thirds of the market capitalization of equities on the UK official list that's £1.9 trillion pounds. Our consultation closed last month. Feedback has been positive and I can confirm that we intend to introduce this rule for reporting periods beginning 1st of January 2021. Our full policy statements and final rules will follow by the end of this year. Our rule will be introduced on a complier explain basis. We expect companies to be able to comply however we understand that some may need more time to deal with data analytical or modeling challenges. And this is just the start. We will follow up in the first half of next year with proposals to extend the rule to a wider scope of listed issuers. We will also consider further changes to the rule moving from complier explain to mandatory disclosure. Also in the first half of next year we will release proposed TCFD implementation measures for asset managers, life insurers and pension providers that we regulate. We aim to bring in rules for the largest firms by 2022. This will further support information flow along the investment chain. In developing our approach we are working with other regulators and the government through a TCFD task force. This was set up after the government's green finance strategy was released last year and the interim report being published today. Implementing the TCFD's recommendations is just the first step. It must be complemented by more detailed climate and sustainability reporting standards that promote consistency and comparability. The FCA is co-chairing a work stream on disclosures with other international regulators called the Sustainable Finance Task Force. We are working with others to drive international progress in this area. We strongly support plans for a new Sustainability Standards Board recently proposed by the Trustees of the IRFRS Foundation. Building on TCFD and a harmonisation initiative by an alliance of leading standard setters, this can deliver a common international standard within a tried and tested governance model that promotes the public interest. Our second theme is around trust. This year we have seen record inflows into sustainable investment products and record issuance of social and sustainable bonds. According to industry data, flows into such funds in the third quarter exceeded £55 billion for the second successive quarter. This represented 40% of all European fund sales. At the same time, sustainable equity funds gathered 82% more new money than traditional equity funds. As this market grows, we would like to ensure that consumers can trust sustainable products. To do this, firms need to be clear on their obligations around the design, delivery and disclosure of sustainable products and consumers should receive the right information and advice. In the fund space, we have been considering measures to combat potential greenwashing. We have developed a set of principles to help firms interpret existing rules requiring that disclosures are fair, clear and not misleading, including when they submit new products to us for authorisation. Better disclosures will in turn help consumers understand and compare the products they are offered. We will shortly start discussing these principles with industry with a view to finalising them in the new year. And later this year we will run consumer experiments to help us better understand what information influences consumer choices. Finally, our third theme is looking at tools. In this fast-moving space, close collaboration between regulators and industry is crucial to drive best practice and support the transition to net zero. Last year, we established the Climate Financial Risk Forum, jointly with the Prudential Regulatory Authority. The forum brings together financial sector representatives to share experiences in managing climate-related risks and opportunities. In June, the forum published an industry guide to help firms assess and report on climate-related financial risks. Next year, the forum will refine and build on these recommendations. Working together, I am confident that we can rise to the challenges and opportunities climate change presents. Thank you. Thank you, Nick Hill. And this brings us to the end of our first session of the day. And I'm delighted to let you know that over 10,000 people have joined us this morning from around the world. Absolutely amazing, showing the interest in this topic, of course, and the speakers we have had. We now have a break until 11.30, Greenwich meantime, and I look forward to seeing you back virtually then.