--- title: "Bank of England: Climate Change And The Financial System" description: Central banks and supervisors have formed the Network for Greening the Financial System. image: https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Storm_cloud_above_Mt__Elden_7592193212-May-12-2022-08-35-29-60-AM.jpg --- ![websites-group](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/new-MMG-01.svg) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-new-marketsmedia-logo.svg)](https://www.marketsmedia.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-traders-redlogo.svg)](https://www.tradersmagazine.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-bestexe-logo.svg)](https://www.bestexecution.net/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-menu-fidesk-logo.svg)](https://www.fixglobal.com/) [![](https://articles.marketsmedia.com/hubfs/raw_assets/public/MarketsMedia_August2021/images/dropdown-fixglobal-new-logo.svg)](https://www.fixglobal.com/) - [*Facebook*](https://www.facebook.com/MarketsMedia/) - [*Twitter*](https://twitter.com/marketsmedia) - [*Linkedin*](https://www.linkedin.com/company/markets-media-llc) - [Newsletter](https://articles.marketsmedia.com/bank-of-england-climate-change-and-the-financial-system#popup-newsletter) #### Want the latest news on securities markets -- FREE? 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Climate change poses significant risks to the economy and to the financial system, and while these risks may seem abstract and far away, they are in fact very real, fast approaching, and in need of action today. In short, there are storm clouds on the horizon and the financial system needs to act now to plot a new course to safer waters. To do that we will need three things. Firstly, a destination. Secondly, an able crew. And finally, a nautical chart – or map - to get us there. We have the destination. More than 190 countries have signed the 2015 Paris agreement and set a goal to limit average global temperature rises to well below 2 degrees above pre-industrial levels1 . We even have a broad course to follow – that of a smooth and orderly transition. We have also assembled a crew. Managing the transition to a low carbon economy is a global challenge that requires a global response. And so a coalition of the willing among central banks and supervisors have come together to form the Network for Greening the Financial System (NGFS) . In addition, and closer to home, we are working domestically with industry through the Climate Financial Risk Forum (CFRF) to build intellectual capacity and establish best practice in how to manage the financial risks from climate change. What we are missing is the map. Getting us to our destination requires an understanding of what risks lurk in these deep waters and what future winds may buffet us, so we can make better decisions today. We need more data, greater disclosure, better analytical toolkits, advanced scenario analysis and new risk management techniques to help identify the hidden dangers on our journey. Of course there are opportunities potentially in front of us, too. Financing that orderly transition to a low carbon economy holds the promise of favourable tailwinds and smooth sailing. But how do we begin to draw this map? Climate change is an unprecedented challenge and, I am sorry to say, there are no existing charts for us to follow. We therefore need to start with the very basics - understanding how, and on what scale, climate change creates risks for the financial system. The rest of the speech[can be read here](https://www.bankofengland.co.uk/speech/2019/sarah-breeden-omfif). Source: Bank of England [Share](https://www.facebook.com/share.php?u=https://articles.marketsmedia.com/bank-of-england-climate-change-and-the-financial-system) [Tweet](https://twitter.com/intent/tweet?text=US+ETFs+Have+Record+Net+Inflows&url=https://articles.marketsmedia.com/bank-of-england-climate-change-and-the-financial-system) [Share](https://www.linkedin.com/cws/share?url=https://articles.marketsmedia.com/bank-of-england-climate-change-and-the-financial-system) ![email](https://articles.marketsmedia.com/hubfs/Markets%20Media/email.svg) ### NEWSLETTER SIGN UP And receive exclusive articles on securities markets ### Related articles 1. 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