 Hi, good afternoon everyone or good morning if you're listening to us in the UK or In Europe and welcome to this very special webinar that we have for you today On how can monetary and financial policies support sustainability goals in Asia through the recovery and beyond? We've got a very strong lineup of speakers today This year on Jessica, too. Who's the deputy governor of Bangladesh or Malaysia? We also have Yolanda Chung head of sustainability institutional banking at DBS Bank I'm Ulrich Volts, the director of the SOAS Sustainable Finance Center at SOAS University of London My name is Aziz Durrani. I'm a senior financial specialist at the CSUN Center And I'll be chairing the session so this Session and this forms part of a series of events Following The the the crisis response that are emanating from COVID-19 and the focus is really on how can these Responses be sustainable and support the climate risk journey that we're on It's part of a project that's led by E3G the SOAS Center for Sustainable Finance The CSUN Center and also the Bennett Institute public policy at the University of Cambridge The aim of the project is to examine the options that are going to be available to monitoring financial authorities So that they can respond to the current crisis in a way that's consistent with the national commitments to environmental and sustainability goals We should also point out that the project is funded by the international network for sustainable Financial policy insights research and exchange also known as Inspire So without further ado Let's kick off the session and I want to introduce our first speaker One Jessica Chu is currently the deputy governor at Bank Nogara Malaysia She has over 27 years of experience in the financial sector supervision and regulation within the banks within the Bank Nogara She's currently responsible for financial stability which covers the regulation supervision of banks insurance companies payment systems and money services Jessica represents the bank as an advisor member of the Malaysian Accounting Standards Board and also holds a Chartered Banker qualification from the Chartered Bankers Institute in Scotland She's also a fellow Chartered Banker of Asian Institute of Chartered Bankers and is an associate member of the CPA Australia She graduated from the University of Melbourne Australia with a Bachelor of Commerce degree majoring in Accounting and Finance So without further ado, did you Jessica please take it away and give us your thoughts and comments on this very important topic Thank you, Aziz. We're just trying to get the screen up. Okay, I hope everyone can see the screen So I'm really delighted to be able to participate in this webinar today to discuss how we can support environmental and sustainability goals through monetary and financial sector policies It's really quite an interesting time to be discussing this particular topic, particularly when a question that often gets asked is Whether this is in fact the time to be focusing on environmental issues given the pressing and at least significant challenges that are confronting our society and economies as we deal with the impact from the Covid pandemic crisis In fact in many countries the recovery process and this includes Malaysia is just beginning and considerable uncertainty still remains on the pace as well as the strength of that recovery So to answer that question, I'd like to start by taking a look at how this crisis compares with past crisis and its implications for environmental and sustainability outcomes So I've just provided a quick chart here that across the bottom of the screen, it sets out three of the major episodes of crisis in the recent past, the Asian financial crisis, the global financial crisis and of course the crisis that we are currently confronting Now policy responses to crisis do tend to have some commonalities At the bottom the immediate concern is obviously with limiting the impact through monetary and fiscal responses as well as balance sheet repair and in particular balance sheet repair of financial institutions When we're dealing with the financial crisis but in other circumstances there is also balance sheet repair of corporates and households So for episodes where we were confronted with the financial crisis obviously this becomes a critical focal point to restore intermediation activities out of the financial system and to get credit flows flowing to the economy So if you look further out into the beyond the immediate crisis resolution to the top of the chart that I have here Crisis episodes are usually also very often catalysts for reforms that seek to build longer term resilience against future crisis As the saying goes, never waste a good crisis and I think this is typically the experience in any crisis it serves as a very powerful catalyst for reforms that need to take place And that was certainly the case in the Asian financial crisis. In Malaysia's case that was the start of two master plans which incorporated many financial sector reforms that have since placed our financial system on a much stronger footing than before The thing that I do want to point out in this slide though is that typically what we see is financial sector reforms and other structural reforms tend to proceed on parallel paths if you like For example and I'll give you the example of SMEs in Malaysia. After the Asian financial crisis, we did many things to improve access to financing for SMEs, these are small and medium enterprises And today they account for almost half of the business banking book of banks in Malaysia At the same time however SME contribution to growth remains relatively low if you compare across countries and that suggests that structural reforms around for example entrepreneurship, financial management, skills development might still have some way to go So the reason I have those two colours across the top of the screen is because I do want to stress that many times these reforms tend to proceed separate from each other Now if we keep these perspectives in mind, this crisis presents some notable differences in thinking about environmental and sustainability outcomes First of all the scale of monetary and fiscal responses has been unprecedented in many countries and we're talking about you know in the order of trillions of dollars globally and we're still counting Malaysia's stimulus packages have cumulatively delivered close to 70 US dollars, billion US dollars in support to the economy and that represents about 20% of our GDP Secondly, this has been both a demand and supply shock that has occurred simultaneously with nationwide lockdowns bringing economic activities to a sudden stop across the board and in some cases for longer than expected Reports have suggested that the pandemic is likely to have led to the largest reduction in global CO2 emissions to levels that we've not seen since 2006 The crisis is also likely to have accelerated changes in behaviour under new norms that could have enduring effects on altering the cause of actions by individuals and businesses and this will have direct implications for environmental and sustainability outcomes Of course these are early days and really to what extent that change is entrenched and takes hold in different countries is yet to be seen Examples are many companies deciding to maintain work from home arrangements even after the easing of lockdowns and of course there's been a notable acceleration in the adoption of digitalisation And last but not least, the financial sector this time around has been far more resilient unlike in previous crisis episodes and hasn't itself been a focal point in need of critical support as was observed in past crisis Now these factors provide a once in a generation opportunity and this is one way to look at it to bring together both financial sector reforms and other structural reforms needed to deliver sustainability and environmental goals And in a way that is more integrated as countries start to chart their recovery path from the pandemic crisis. So let me talk about what these opportunities are First of all an opportunity lies in the collective responses of individuals, businesses and financial institutions and governments to reset the costs to a low carbon economy Many businesses are rethinking their business models as they restart after the sudden stop Online activities have become much more prevalent both in social and commercial context and these activities as they proceed going forward could actually determine the path towards a lower carbon economy Secondly the financial system this time is not in crisis and can play a pivotal role to support environmental and sustainability goals through their lending and investment activities And in this way they can further reinforce efforts to shape a more sustainable recovery Third the scale of stimulus has also increased the states of ensuring maximum impact in terms of optimal social and economic outcomes with a longer term horizon view This is because fiscal space has become more limited and that this is going to be faced by many countries going forward And finally and certainly importantly the physical and systemic nature of this pandemic shock also offers opportunities to underscore why new norms need to be more sustainable to mitigate the devastation and economic scarring effects of a similar crisis in future So I've just included a recent quote from Kristina Georgieva of the IMF who said that climate action may well be the silver bullet that we need at a time of low productivity and growth, low economic growth, low interest rates and low inflation And I think just today I saw in the Financial Times Madam Lagarde has featured on the front page also committing the ECB to greener changes in all aspects of its operations including asset purchases So is this the right time to be talking about environmental and sustainability goals? I certainly think that a strong and certainly compelling case can be made for it and that is recognized globally even in this period So if I can move on, this slide simply points out really the obvious that is addressing environmental and sustainability challenges does require a collective response And I'm not going to go through the details of what's on this slide However, I will say this, it is much easier to put this down on a slide than actually achieving it in practice Due to many tensions that exist between economic agents, the government and other important stakeholders So it does remain unfortunately true that a key challenge facing many economies including Malaysia is often one of having a joined up approach to tackling issues such as climate risks for example Having clear policies at the national level is absolutely critical but also important for traction to be achieved is really having the framework and arrangements that must include accountability and incentive systems that are aligned with the outcomes that have been set So without going into the details, I think this slide continues to present the vision for how economies do need to come together to respond to the challenges involving environmental and sustainability issues And that it is still for many countries a goal that remains in the future because much more work does need to be done to bring all these different actors together Let me just close off with some observations on Bangladesh's response to climate risk And I'll talk through this chart in a little bit more detail as we're discussing financial monetary policies Like most countries, Malaysia obviously has not been spared from an increasing frequency and intensity of climate events and their adverse effects on productivity, on output and on social well being And we believe that in line with our statutory mandates of financial and monetary stability, it is our responsibility to consider the implications that these climate events and climate risks more broadly has on monetary policy settings And to ensure in particular that financial institutions are adequately measuring, mitigating and buffered against climate change risks It is also our view that the financial sector can and in fact should play a catalytic role in the transition towards a low carbon economy And this is because it's very centrally placed in any economy between business, households and government and they control significant resources that fuel the economy So beyond managing risk, we believe that providing an enabling environment for green financing and investment activities is also something that the central bank participates in and contributes to So in this chart I've just laid out the primary areas of focus around firstly strengthening climate risk management, secondly encouraging policy alignment and thirdly ensuring that our own operations are consistent with improving sustainable outcomes And in the boxes in the middle, I've just set out some of the strategies that help to frame our initiatives in the bank as we approach this challenge Firstly, under climate risk management, a lot of effort goes into engagement and capacity building and this seems obvious but really the intensity of the work that needs to go into that has become for us eye-opening because there is a depth of data, of experience and knowledge around climate risk management which remains a new field for many institutions in this country and even for the central bank Secondly, integrating climate risk in macroeconomic and financial stability assessments, so we benefit greatly from being a member of the network for greening the financial system And that work is helping us to enhance our macroeconomic and financial stability assessment frameworks And one of the things that current work that is ongoing now is developing climate transition scenarios that can be an input into how we look at points of stress for our financial system Third is strengthening regulatory and supervisory expectations for managing climate risk and beginning since last year we've really ramped up the conversation with financial institutions in Malaysia around our expectations for managing climate risk So this has become integrated with our supervisory engagements with financial institutions So in our annual cycle of risk assessments of financial institutions, we call it composite risk ratings where we discuss some of the issues of concern for supervisors around financial institutions Climate risk management is now very much a part of that conversation and that is helping to focus the minds of financial institutions both the board as well as the management team on how they're managing climate risk So we're trying to understand how financial institutions look at this and how they're incorporating climate risk considerations in their overall frameworks So across the right, I have kind of just put down a few things that we're working on. We have recently issued a discussion paper on climate risk taxonomy and it's a principle based taxonomy And this is an effort to try and provide classifications and identify risks within financial institutions books in terms of their exposure to climate risk That paper is available on our website if you're interested And we've received very good feedback and we are in the process of finalizing that with a pilot project underway to actually get some data based on that taxonomy from financial institutions which will give us a better sense Our estimates now place potential exposures of financial institution assets to climate risk at around 11% and we'd like to get better data to refine that Supervisory expectations is something that I spoke about earlier, stress testing has been an area that we are also working on as discussed and moving forward we're encouraging financial institutions to adopt the TCFD disclosures in reporting how they manage climate risk In the second frame around policy alignment, I think for us this is about creating an enabling environment for green financing and investment I'd just like to point out that one of the things that we've done since I believe it was September last year was establish a joint committee on climate change And the idea is to bring together representatives from the industry, the central bank, the securities commission to move things forward on a number of fronts There are four key work streams under this, one that looks at risk management, one that looks at governance, one that looks at products and innovation and engagement and capacity building And it's doing a lot of work across all four work streams to enable us to move forward in terms of building the foundations and building blocks for us to be able to manage climate risk moving forward Value based intermediation is also something that has been intensified in Malaysia since 2018 This started with the Islamic finance institutions in Malaysia and was very much aligned with Sharia principles and tenets And the idea behind that is for financial institutions to take account of how their activities impact the environment and the social conditions around them And it sets out guidance around how decisions may be made to take these considerations into account as well as measurement frameworks to measure the impact and outcome of lending and investment decisions So we do see an important opportunity to mainstream this VBI in the financial system and to do that in lockstep with our increased focus on climate risk management Sustainability focused funds are funds that we have in Malaysia around green technology financing and I think in this crisis as well The funds that are being set up to support SMEs and to provide relief increasingly we are also looking at how the design features of some of these funds can be pivoted also to incorporate sustainability considerations as businesses tap into these funds to restart And their businesses, there is an incredible opportunity for us to look at how the funds can also be used to encourage moves towards more sustainable practices in businesses And finally at the bottom, this is the banks own operations so in our own investments for example our currency operations as well as you know the way we manage our facilities and day to day activities We are taking sustainability considerations and climate risk very seriously and we are building even internal frameworks for measuring the impact of our daily operations on climate risk and that is a process that is ongoing So I just wanted to highlight that the shades in orange that you see on the slide really point to areas where in the context of the crisis that we are currently in We have seen from our own experience the opportunity to really accelerate the focus on around climate risk and issues that surround that And these are areas where in the current crisis they are particularly relevant in talking about how we can move forward to move this agenda forward So I'll leave this there as is for now and I'm happy to take questions from participants. Thank you very much Thank you very much Gigi Jessica and that was a very interesting presentation and really highlighted a lot of the difficulties that we're currently seeing because clearly you know people are People are struggling, they're losing their jobs, we're having a massive impact on the economy and there's a lot of pressure and you kind of highlighted very clearly that kind of balance around You know people saying well can we really continue to get involved in this and I think you brought out the reason that actually these kinds of you know COVID-19 highlights how these kind of natural events can really throw off the economy And if we don't start acting now you know whatever it may be pollution we had haze here last year, it could be rising sea levels, they can really impact economic growth and financial stability So from just that perspective as well it's important to continue to engage on these issues and it's certainly very good to see Bank Nagara taking such a leading stance in so many of these elements So thank you for that. We will take questions at the end and can I encourage people to use the Q&A box at the bottom of your screens to engage with the debate and start sending in your questions and observations that you may have But now let's just move on to our next speaker, we've heard from the from the central banking side and I think it'll be useful to now hear from the private sector side So let me introduce Yolanda Chung, she joined DBS in 2017 and is currently the head of sustainability of institutional banking group She leads the banks responsible financing framework and advices on environmental and social issues pertaining to transactions Yolanda was previously head of sustainable finance at Standard Chartered in London where she established the bank's sustainable lending agenda And before joining the banking sector she was an equity analyst for mining and building materials sector at Rebecca Sam in Zurich Switzerland She graduated with a master of science in environmental change and management from Oxford University So Yolanda we're very pleased to welcome you here Please take it away Thank you So I feel very privileged today to be able to join the panel alongside Jessica And I know that Bangalore Malaysia has been pioneering in many of the climate change risk management policies as the taxonomy And I will go into a little bit more detail about the DBS taxonomy that we try to emulate what Bangalore has done So for us if we look at the next slide The topic of today we want to look at how the pandemic has changed businesses and how financial institutions, commercial banks like DBS is coping with Of course we do take our cue and guidance from our central banks Being based in Singapore MAS also being a member of NGFS the network for greening financial services We have been involved in all the work streams that Jessica has mentioned So the team of sustainable finance at DBS under our IBG institutional banking group looks at both the risk management work Whereas all the structuring and advisory for green finance transactions So we do wear two hats and with that overview we feel that if we look at the pandemic We could summarize the disruption to our way of how we used to work and how we used to think in the real economy One is that our customers do face a very strange balance sheet It could be falling revenue rising costs and the balance sheet is not as resilient as before And to then talk about green recovery actually we have to make a conscious effort It is not something that is intuitive even though there is a lot of discussion and debate that has gone on about the importance of green recovery And actually how much financial and economic sense it makes to have a green recovery But the reality is balance sheets are strange The second disruption we have seen is in terms of capacity, the bandwidth the companies have And they can't really afford the luxury of thinking beyond the medium term or even the short term Many of them are really coping by the week The third disruption is just the interruption that they face in the supply chain, in the logistics In the employee in forecast and beyond because it is not as simple as before in making sales forecast And those projections have been thrown out of the window So the question to ask, knowing that the pandemic has disrupted business as usual And it may be disruption of business as usual The question is has it scaled back companies sustainability ambitions? The next slide, let's look at some of the instruments that we use a lot at commercial banks when we try to do green finance Which is green loans and sustainability link loans A very quick description of the mechanics of the two Even those are used changeably actually referring to two very different structures Green loans are loans that the entirety of the loan has to go to green projects, green assets, green purposes And for sustainability link loans, these are loans that allow the borrowers to use the money for whatever working capital Other purposes they see fit And very often these loans would come with a potential upside in terms of a margin discount in the interest payment that they make If they meet certain sustainability performance targets So in a way, if we look at the statistics in the second half of this year, which is the last column Compared to the same time last year, we have seen a slight downward trend And I would say that actually the decrease compared to the same time last year is a lot less by force Because a lot of the loans have not materialized simply for credit reasons And in our interactions with customers, we have not really encountered any reservations to try to tap into sustainable finance because of the pandemic As Jessica has said, I think actually there never was a good crisis And companies are really trying to learn the opportunities given by this disruption to try to go digital And to try to understand how this may be a foretaste of what climate change may bring in the future So it's almost like a rehearsal, a major disruption that is uncertain and it stretches into the amount of time Then on to the next slide, what I've shown on the slide here is about transition And allow me a couple of minutes to explain what this transition term means Because we talked about physical risk, transition risk under climate change a lot And it refers in that context that transition risk or the policy changes or technological advances that would make certain business models redundant The transition that I'm talking about here in my presentation is to say that companies aiming Or they should be aiming for net zero emissions by 2050 That pathway, that transition, how ready companies are by geography If we look at Asia, other Asia, Japan, China and India You would see that these are the parts of the world, majority of the customers are far from ready They're not ready in terms of not having any climate disclosure They're not ready in terms of even having any targets set in the relatively rare instances that they have Scope one, two and three emissions disclosed and may even have set themselves targets The targets are not exactly science-based targets to reach net zero by 2050 Or to try to have emissions peak by 2030 Which is the trajectory we want to arrive at when we say we want to be Paris climate agreement compliant And given this context and the wider environment of what the pandemic has brought about DPS launched last week a sustainable and transition finance framework and taxonomy So onto the next slide, what we've done is that we realize in Asia, in Southeast Asia in particular where DPS operates And has our major press, many of our customers need a lot of encouragement And also incentives provided by the commercial banks to move towards a low carbon economy We do hope that we'll see more policy guidance and directives from our regulators and the government's concern Because we believe that is the most powerful way to encourage companies or to mandate companies to change Given that may not come soon enough As a commercial bank at DPS we feel that we have the responsibility to also play our part in incentivizing companies to do better And rather than focusing on just the sustainable part of the taxonomy that you may have seen in the EU taxonomy We want to take one step further to look at transition finance These are companies in high impact, often fairly polluting sectors So these could be steel production, cement production, it could be gas fire power generation, it could be shipping So these are companies in sectors that will be considered to be in brown industries as opposed to the green industries such as renewable energy, mass transportation And we feel that if we look at the green bond market so far, majority of the issuers and the underlying assets used for green bonds are coming from the usual suspects Meaning it could be renewables, it could be clean mass transportation, it could be water waste management for municipals But it hasn't really branched out and it has remained quite niche And for the world to achieve two degrees we need all hands on deck and transition finance is going to play a part in it So what we've done is in the framework we have effectively set out a list of economic activities and we label them either sustainable or green They could also be conducive to achieving UN sustainable development goals, UN SDGs, or they could be considered in transition Meaning that they are in a brown industry, they're not trying to greenwash their investors or stakeholders by calling, labelling their assets green But they are making an effort to make the transition And we plan to use the framework to guide all our business origination and advisory for a whole range of products and services that we offer at the bank Next slide So onto the labels that we use in the taxonomy, for green and UN SDGs, I'm not going to label the point much because I think they are fairly well known to many of the people in attendance When it comes to transition, so here we know that it is a contentious agenda Many investors and climate scientists believe that anything less than dark green should not attempt to do sustainable finance because you would be accused of greenwashing or purpose washing Because purpose is now the new fashionable term companies use What we want to make sure when we do transition finance is that the transaction, the capital that is being used to facilitate certain activity, that activity needs to displace carbon intensive options that are being used at the moment in a very significant way We also require independent documentation and verification of that mitigation We would also look at how that particular activity or technology that we are financing is enabling a wider application of less carbon intensive options The notable example here would be In a country that should really have a field mix that is as clean as possible but in order to accept intermittent renewable energy, the grid upgrade also needs to happen Yolanda, I think we've just lost your picture and your voice. I'm not sure if you can hear us I think we might have to move on. I was actually quite getting into that and I think it was coming to a good conclusion The one thing that was kind of striking out was around the need to have the taxonomy fixed and green bond or green loan standards that we can all, or the wider community can all expect and use And right now there's a variety of standards and so there's obviously potential for some arbitrage around that So let's then leave it there with Yolanda and hopefully she'll be able to join us again for our Q&A part Let me move on and introduce our third speaker, Ulrich Volz, who's the founding director of the SOA Centre for Sustainable Finance He's also a senior research fellow at the German Development Institute and honorary professor of economics at the University of Leipzig He is a director of the Global Research Alliance for Sustainable Finance and Investment and serves on the advisory council, the Asian Development Bank Institute and the Board of Defender, the Sustainable Finance Data Initiative And I think Ulrich, you've had an experience across teaching at many international universities. I won't go through the whole list, but you've also spent stints working at the European Central Bank, European Bank for Reconstruction and Development And held visiting positions at the University of Oxford, University of Birmingham, the ECB Bank in Denizia and the IOMA University in Tokyo And you're part of the UN inquiry into the design of a sustainable financial system So I think with that experience, we're really keen to hear from your perspective and possibly bring together the kind of the central bank and the public sector side along with the private sector side and how we can move forward on the sustainable finance initiative Thank you, Ulrich Well, thank you Aziz and it's a great pleasure to speak on the panel with Jessica and also Yolanda And it's really great to see how the discussion has changed and I would very much like to commend Jessica on her leadership in driving the Sustainable Finance Agenda at Bank Nogara Malaysia I actually started my work on sustainable finance very much in Southeast Asia, so around a decade ago I did a research project with Bank Indonesia on how to scale up green finance and at the time it was very unusual for a central bank to be interested in this topic And indeed, I had many, many conversations with central bankers in Europe, but also Asia and elsewhere, who were very irritated, you know, that a central bank would be concerned about sustainability, climate risk and so on And it's so great to see how completely this discussion has changed If you could move to the next slide please So turning to the current environment, we have once again central banks at the forefront of fighting the crisis, supervisors have also been playing an important role And those central banks and supervisors have been playing or making important contributions to stabilizing the situation There was enormous turbulence in financial markets back in March and April and central banks and supervisors have with very pragmatic approaches helped to cool the situation And of course also now there will be important contributions in the recovery But it's very important to make clear that the policies that are being adopted now will in many cases have very profound implications on long-lasting outcomes And even though the responses are geared towards the very short-term needs, you know, creating employment, stabilizing markets and so on They need to be consistent with long-term climate and sustainability goals And help our overall transition to low-carbon sustainable economy and that should of course also happen in a just way so that poorer parts of the population are specifically supported in this So of course the prime concern has been stabilizing the economy, stopping the free fall of the economy, keeping jobs and so on And there have been a lot of liquidity enhancing stimulus measures, easing of counter-cyclical and prudential instruments and all this has been really important But it's also important to realize that there are risks involved in that, if these liquidity enhancing measures and easing of prudential instruments are not calibrated in a way that account for climate and other sustainability risks So there is concretely a danger that kind of the easing stimulus measures contribute to build up of new risk if these are not really built in So it's therefore very important that in the different responses that are implemented, central banks and supervisors do consider how can we address sustainability and climate concerns Next slide please And the good news is that actually a lot of monetary and prudential instruments can be calibrated in ways that account for climate or other sustainability related financial risks or contribute in other ways to climate and sustainability goals So just to give you a few examples, collateral frameworks of things that most people don't really think about much but these are very powerful tools and they can be adjusted to account for climate and sustainability related financial risks So for example, central banks can apply haircuts or exclude certain dirty assets that are not aligned with sustainability goals can really have massive implications on the allocation of credit and investment Refinancing operations can be aligned with sustainability goals and I'm not only talking about climate but also, for example, and Jessica mentioned SMEs There can be special refinancing operations for SMEs and this is something that has been taken up quite a bit Reserve requirements and risk weights can be differentiated to account for carbon footprints or other sustainability factors An increasing number of central banks now also among emerging economies including in Asia has implemented asset purchase programs When these involve corporate asset purchases, the also should be aligned with climate goals and carbon intensive assets should be excluded And this is not Reem QE as such, it's basically excluding dirty assets Here is a kind of the shameless self-promotion slides we recently published, I wrote a paper with Simon Dickow and Nick Robbins from the LSE And we published this toolbox report which basically provides an overview of all kinds of instruments and tools that central banks and supervisors can use to align their policy responses with sustainability and climate goals And I think we do need this discussion in the central banking supervisory community But I would also like to say that there have been indeed some good moves, I mean, if you look at the responses of central banks and supervisors, these have been all fairly kind of standard responses So in the sense that they have not been integrating sustainability or climate risk considerations, but they can be retrofitted so moving forward central bank supervisors can take these into account But we do have seen some good moves, a number of central banks including in East Asia have moved ahead with the sustainable finance agenda, Jessica mentioned the great work Bank Negara Malaysia has done, we've also seen for example in the Philippines, the central bank approving a sustainable finance framework, the Hong Kong Monetary Authority in May, together with the Security and Futures Commission launched Green and Sustainable Finance Cross Agency Steering Group to move the Sustainable Finance Agenda ahead. The Monetary Osorias of Singapore, as was mentioned, is one of the founding members of the NGFS launched last month a public consultation on a guide for environmental risk management and also a fintech challenge for climate change. The ASEAN central banks have also worked closely on climate issues and will be putting forward a report on climate and other environmental risks soon so there clearly is a lot going on, but it's also important to kind of use all these different insights that have been gained to calibrate existing climate response tools in accordance with climate and sustainability goals and I'll stop here. Thank you. Thank you very much, Julie. I think that paints a very good picture of the work that's going on. I think we now do have some time for Q&A so can I invite the other panelists to also turn on their cameras and join us. And we can start going through some of the issues that were raised. And for those participants who are dialed into this, please do use the Q&A box at the bottom to send through your questions. So I think there's a couple of particular questions actually for DG Jessica, but maybe before I come to those there is one kind of more broader one, which is talking about while we're resetting the carbon economy, who should take lead? Should it be developed countries or emerging countries? I think you will probably have a view on that. Do you want to share your thoughts on who should be taking the lead on these? I do think emerging economies do have to own and drive their own sustainability agendas and there is obviously opportunities for collaboration at a national level with developed economies providing very important support to the efforts of emerging economies. But the reason I believe it is emerging economies to also take accountability for this agenda is because there are very unique issues and challenges that emerging economies do have to confront in managing a transition. In many of our countries, there are issues around including poverty that need to be addressed and sometimes the actions that are advocated by developed economies do not sufficiently take into account these circumstances. And I think the more emerging economies can play a bigger role in influencing and driving their own agendas, I do think that provides producers a more optimal outcome. I think that's a great point and as we were saying earlier, a lot of these immediate climate impacts already affecting emerging economies quite directly. So it is in fact very refreshing to see a number of actions being taken by central banks across Asia and you see some members in dealing with a number of these things. So Uli, what do you want to add to that? Yeah, I'd just like to add to that. I think it's important to understand that it is a false choice between sustainability and growth. I mean growth that is not sustainable is not our kind of development that is not sustainable is no real development. And in particular, when we talk about climate change, if we are, for example, in a region like Southeast Asia, which is extremely vulnerable to the physical impacts of climate change, it's a no brainer. I mean, the physical and transition impacts of climate change are going to be massive. And financial supervisor central bank that does not account for these risks is not doing their job. It's as simple as that. So the idea that, well, you know, sustainable finance is maybe something that advanced countries can, you know, afford to deal with this is this is this is not true. You know, this is really a universal agenda. And of course there is no no question that in terms of climate policy. There is a obligation by advanced countries who have been contributing the most historically to global warming that they need to support poor countries in adaptation and mitigation activities but it's certainly in the very strong self interest of all countries, including poor ones, but also emerging economies, of course, to really get this right and build the economy for the future. Thanks. Thanks. Let me just move on to the next question and perhaps you learned that this this is one that you might want to start off on. Could you please elaborate on how these sustainable measures can be quantified and measured in the books of companies. So for example, how do you really, how do they really prove their investments are full towards improving sustainability and this is a really good question because it's at the moment it's it's, as I was saying, it's very hard to to prove it conclusively so you learn to how do you kind of tackle this is question or the connection again. I'm still here but it's a little bit broken so let me attempt. Hello. Yeah, it's it's kind of funny. We can hear you just about. Okay. Attempt answering this question. So we. Okay, I think hopefully Yolanda will just try and dial in again and we can have we can have a go at that. Do you really or Jessica do you want to do you want to share any thoughts or should we move on to the next question because there are a few for you for each of you coming in as well. I mentioned a couple of questions and then we can can because we're running a bit short of time. Yeah, okay. So we want for you is if we're retrofitting some of the existing tools for climate and sustainable purposes. Will it truly aid the greening of the financial system. So again, this is a this is a bit I think you were talking about how how we can use some some of the current tools we use. Will they actually deliver what they're supposed to. Well, I mean, so what one one thing that I would like to emphasize is that different central banks have different frameworks, financial markets don't look the same in every country so it is important to to look which tools and they work best in which context so it's not one size fits all policies. But yeah I mean I you know I'm not saying that climate change central banks, you know should be the only game in town and that's adjusting say the financial framework will do the magic trick and everything will be fine, but finance or kind of financial supervision can be extremely powerful so calibrating prudential instruments in a way and also monetary instruments in a way that take account of climate risk can be extremely powerful I will definitely understand that so. And one thing that's also very very important, and I think this cannot be underestimated the importance of leadership and signaling. Jessica made that point in her presentation, the interaction with the financial system. And I think that the questions that that are being supervised, making clear what the expectations are that this is not kind of add on nose and corporate social responsibility issue, but this is really an important issue that that central bank supervisors take seriously and so having some very clear sphere from the supervisor is important and I would also like to add that. We are in the midst of a crisis so this is a difficult time to introduce all kind of new regulations and so on. But what central banks and supervisors can do is give very clear signal to their markets and say, we will be moving ahead with climate related financial disclosure. We will be moving ahead with with climate stress testing. We're not introducing it right now, but we are expecting you so kind of setting the framework announcing, you know, next year, we will be starting to expect you to do climate stress and this this will clearly affect current behavior so financial institutions who are now considering to finance all kinds of climate problematic projects. If they have this announcement, they will consider twice what they do. Okay, thanks. Let me just check. Yolanda, have you managed to connect in? Yeah, I'm back on, but apologies I finished the answer. Okay, yeah, I mean, it's just, we kind of missed your section on that so in terms of actually physically, you know, measuring some of these elements when you're, you know, considering transactions at DBS. How do you, how do you really clarify that they are positively improving sustainability? So we, when we try to do a transaction that we label as sustainable finance, it's not just the asset that we are financing that we will be evaluating how much mitigation that is going to enable. We also want to look at the company's overall performance and also when we talk about transition, we want to see where they are transitioning to and what is their vision and also the timeline involved because we are aiming for peak emissions by 2030. So for us, I think if I relay back to the earlier question posed to me, what sort of reporting framework may be useful for people to know in companies books that is ESG material. I do think TCFD is a very good start. However, looking at many companies so-called TCFD reports, they really do vary in breadth and depth. The quality is very different. The metrics used are not consistent. And I think there is actually potential for regulators to come in to say, actually, we only need a few KPIs material. It could be that we know that code is one that will become stranded first. What is company's co-exposure? What is financial institutions' formal co-exposure? And was that one KPI or rare to see how embedded climate risk is? Rather than trying to do too much at the same time, I do feel that with ESG reporting, sometimes it is good to zero in to start small. Thank you very much, Yolanda. I'm aware of the time. I just want to give DG Jessica a chance to kind of share her closing thoughts. And let me just read out the couple of questions that came in for you. Possibly, I know it's slightly out of your area, so you may not have the details on this. But essentially, the first one was, how does BNM integrate climate bills specifically in foreign reserve management? And then a kind of related question is, how do you incorporate the sustainability climate risk considerations in the credit operations role? And can you kind of expand a bit further on what factors have been considered around that? Thanks, Aziz. I'll just take those together. And I think I'll make two points. And some have other speakers have already alluded to it. There are two game changes, if you like, if I can call them that, that we believe are really going to move this agenda forward. One is the taxonomy, which is what we have published and we want to finalize very soon. And that's because that will help us to be able to identify climate risk exposures and look at it in a more systematic way across the system. And that then allows us to answer the question, well, how then do we calibrate our credit operations? Because until we know, you know, what the implications of designing some of these operations with climate risk considerations in mind until we have a better feel of the impact of that. It could be quite difficult. You know, it can be done, but I think we do run the risk of potential unintended consequences. So that taxonomy is going to be very important for us to help size up the risk and allow us to then think more clearly about how we could redesign some of our central bank operations. The second, if you like, key enabler in our view is what Yolanda alluded to, which is the disclosure. We do believe that on measuring these risks on the books of banks, initially it's identifying whether a particular activity or overall business is contributing to climate risk mitigation and adaptation. But over time as well, I mean, once that initial original lending or investment decision is made, it is important to over time then monitor how that company operations has an impact on the environment or on climate. So disclosures will help to allow us to continue to monitor and assess those risks over time. So I think those two things are really critical in our view as things that we really need to move forward on in order to help us kind of get more traction around this agenda. On reserve management, we do have targets that we set for ESG investments and we are building frameworks for scoring models as well as measurement frameworks that will allow us to monitor our exposures and the performance of these investments over time. So that is definitely something that is incorporated and taken into account in our reserve management operations. And ESG is now an important theme in all our investment strategies for both our equity and fixed income investments as well. Okay. Okay, thank you very much DG Jessica. There are plenty more questions and I'm sure we can carry on this discussion for easily another half an hour or one hour but I'm afraid we are out of time. So we need to close it for today. But as part of this project, there will be an ongoing series of such webinars, following on similar kind of themes. And we'll also be developing some policy briefs to act as guidance to central banks and financial authorities on the back of this. So please do keep, you know, keep a lookout on the usual channels on our websites on LinkedIn on Twitter to so that you can join us for for our future events and be notified when the publications are released. I should also say cease in itself where we're running another session on the Sustainable and Responsible Investment Guide with the NGFS next week. And we're planning to run another training session on climate risk stress testing and scenario building with the NGFS and with the Bank of England, hopefully. So please also keep posted for that, because I think that would be an interesting session. And as one of the questions here was pointing out, we need, you know, additional help on setting out those transitional steps and how to get there. And that's what we're very much trying to do with this project. So I'd like to thank DG Jessica Chiu again to Yolanda Chung and to Ulrich Vots for taking the time to join us on this webinar, sharing their thoughts and helping to move this debate forward. Thank you all very much to all our participants. Thank you very much for joining and to everyone. Please stay safe and tune in for the next one in the series. Thank you. Thank you. Thank you, Aziz. And thanks everyone. Thank you. Thank you. Bye bye. Bye.